World Bank Group President, David Malpass, yesterday, outlined ways to help boost economic growth, shorten the crisis, resume development, and lay a strong foundation for a future that is more prosperous and better prepared for global disasters like COVID19.
He also described the current era of high inequality and reversals in global development progress a “time of upheaval.”
Malpass, who gave the outline while speaking in Khartoum, Sudan, as the first Bank Group President to visit Sudan in nearly 40 years, said: “Reversals in development threaten people’s lives, jobs, livelihoods, and sustenance. In many places around the world, poverty is rising, living standards and literacy rates are falling, and past gains on gender equality, nutrition and health are sliding backwards.”
He further observed that “For some countries, the debt burden was unsustainable before the crisis and is getting worse. Rather than gaining ground, the poor are being left behind in a global tragedy of inequality. This drastic narrowing of economic and social progress is creating a time of upheaval in economics, politics and geopolitical relationships.”
Commending the Sudanese government for its “bold reforms” to rise above an inherited “deeply damaged economy and society that had suffered decades of conflict and isolation,” especially clearing its World Bank arrears, Malpass described the people’s resilience as “truly inspiring”.
He however warned that “It’s critical to avoid political slippages because there is no development without peace and stability.”
Economic decline
Speaking on the global scene, Malpass noted that “The COVID-19 crisis has resulted in increased poverty rates again after decades of steady decline. It has pushed nearly 100 million people into extreme poverty, with several hundred million more becoming poor, many of them in middle-income countries.”
He therefore challenged the international community to take action in four areas that would make a difference: achieving economic stability; leveraging the digital revolution; making development greener and more sustainable; and investing in people.
There need to be concrete steps to improve the transparency of debt contracts, increase accountability and ensure decisions draw on comprehensive information.
To achieve economic stability, he called for a gradual and people-oriented fiscal consolidation and restructure unsustainable debt, noting that when the debt service suspension initiative (DSSI) expires at the end of this year, low-income countries that resume debt service payments will see their fiscal space shrink to purchase vaccines and finance other priority expenditures.
This, he said, is because “Many have gone beyond what they could afford, especially as debt in developing economies was at record highs when the pandemic hit.”
As a result, Malpass stressed the need for better debt management, and urged countries to eliminate wasteful public expenditures, make service delivery more efficient, and reallocate public resources to their most productive uses. “This is also a time for proactive debt management to reprofile payments while international interest rates remain low. There need to be concrete steps to improve the transparency of debt contracts, increase accountability and ensure decisions draw on comprehensive information.”
He equally called on countries to leverage the digital revolution, as this can increase competition in product markets and enable people to sell services online, connecting them to national and global markets.
Sustainable development
In terms of making development greener and more sustainable, Malpass noted that the international community is strongly committed to slowing the increase in atmospheric carbon and to reducing climate impacts on the most vulnerable.
He reiterated that “Energy subsidies are expensive and distortive, while removing them needs to be done in ways that solve underlying inefficiencies and increase access.”
Underscoring the need for human capital development, the World Bank chief argued that “Strengthening education and health systems takes more than just providing budgetary resources in an efficient and prioritized way.” For him, finding scalable solutions to enhance health care and improve the quality of education, including through distance learning, is also critical.
