. Worries over $44bn debt service by developing countries
By Clara Nwachukwu
The World Bank Group has warned of possible food, fuel and fertiliser crises by next year if not tackled urgently, saying this portends “a grave danger for the world.”
This is even as it assures that it will continue to rapid ramp-up support by delivering $30 billion to address food insecurity.
The global lender also expressed concern over the $44 billion in debt service expected in this year from the International Development Association (IDA) countries.
It noted that the amount is “more than the combined resources of the Bank and IMF to these counties,” adding that “This leaves developing countries without the fiscal space for education, climate adaptation, and other necessary means.”
World Bank Group President, David Malpass, who said this on Saturday in his remark to the Development Committee – 2022 Annual Meetings in Washington DC, noted that the meeting comes “at a time of great crisis for the world,” compounded by the on-going war by Russia in Ukraine.
The Development Committee also had in attendance the Managing Director, International Monetary Fund (IMF), Kristalina Georgieva; United Nations (UN) Secretary-General, Antonio Guterres; and Director-General, the World Trade Organization (WTO), Dr. Ngozi Okonjo-Iweala.
There’ve been sharp increases in the export and burning of coal, oil, and wood—all of which is a grave concern for climate and the world.
Increasing debt, global warming
Given the slower global growth weighing down countries, particularly, developing countries, the WBG President stressed the need for progress on debt, debt reduction, and transparency, as part of the several changes on debt to make more progress in the long term.
To this end, he said the World Bank and IMF advocate debt transparency; a standstill for countries that are applying for Common Framework treatment; inclusion of all creditors from the beginning of the process; and a more prominent role for debtor countries.
Others are earlier sharing of the parameters of debt relief and debt sustainability analyses; and finally, comparable treatment among official bilateral and commercial creditors using a common discount rate. We need much more progress on debt.
Malpass also expressed the Committee’s concern on global warming through “the backsliding on greenhouse gas (GHG) emissions throughout 2022,” adding that “There’ve been sharp increases in the export and burning of coal, oil, and wood—all of which is a grave concern for climate and the world.”
He described the recently launched, SCALE Trust Fund, as the missing link in the global system to achieve meaningful emissions reduction in the long term, while thanking the United States for its contribution to the Clean Technology Fund.
He informed that the Development Committee is “filling the information gap with our Country Climate and Development Reports, or CCDRs, which form the basis for our future country programs,” and also welcome the review of the Capital Adequacy Framework, while recognizing the need for International Financial Institutions (IFIs) – especially the World Bank – to increase resource flows.
