Banking And Finance
The World Bank expects to raise $100 billion in donations to the International Development Association Fund from advanced countries to solve what it says is a 'tragic reversal in growth' due to the COVID-19 pandemic.
David Malpass, the World Bank's president, said that The World Bank expects to raise as much as $100 billion in donations for the International Development Association Fund for Poor Countries to address the 'tragic reversal in growth' caused by the COVID-19 pandemic.
The economic situation in low to middle-income countries is urgent since the Debt Service Suspension Initiative (DSSI) launched by G20 nations early last year, allowing governments to defer debt payments while dealing with the pandemic, is set to expire at the end of the year.
The multilateral development bank is forecasting global growth of 5.7% in 2021 and 4.4% in 2022. Still, president Malpass said that the inequality between rich and developing countries was increasing dramatically, with per capita income in advanced economies estimated to grow nearly 5% in 2021. Still, low-income countries were expecting only 0.5% in growth.
Mr. Malpass said that he was witnessing what was a 'tragic reversal' in development across many dimensions of society. He also noted that COVID-19 had set back the progress achieved in reducing extreme poverty by years and, in some cases, by decades. To correct the widening inequalities, the World Bank is looking to raise $100 billion in donations from more prosperous and advanced economies to replenish the International Development Association fund as earlier recommended by few African finance ministers.