World Bank seeks US$100b in donations to address ‘tragic reversals’ in development due to Covid-19

The World Bank Group logo is seen on the building of the Washington-based global development lender in Washington on January 17, 2019. — AFP pic
The World Bank Group logo is seen on the building of the Washington-based global development lender in Washington on January 17, 2019. — AFP pic

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WASHINGTON, Oct 11 — The World Bank hopes to raise US$100 billion in donations for the International Development Association fund for poorer countries to address “tragic reversals in development” caused by the Covid-19 pandemic, its president David Malpass said today.

The multilateral development bank is forecasting global growth of 5.7 per cent in 2021 and 4.4 per cent in 2022, but Malpass said disparities between advanced economies and developing countries were worsening and had set back efforts to reduce extreme poverty by year, and in some cases decades.

“Incoming high-frequency data points to slowing momentum in global activity, amid persistent supply chain bottlenecks and Covid-19 surges,” Malpass said. “The outlook is challenging for much of the developing world, with lagging vaccination rates rising, inflation, limited policy support, too few jobs, and shortages that extend to food, water and electricity.”

Malpass said inequality was increasing dramatically, with per capita income in advanced economies expected to grow nearly 5 per cent in 2021, but only 0.5 per cent in low-income countries.

He said advanced economies were already hitting pre-pandemic levels of economic growth, but output in developing countries would be nearly 4 per cent below pre-pandemic projections next year.

“We’re witnessing what I call tragic reversals in development across many dimensions,” he said. “Progress in reducing extreme poverty has been set back by years, for some by a decade.”

To address the widening disparities, the World Bank is seeking to raise US$100 billion in donations from advanced economies to replenish the IDA fund, he said, embracing a recommendation made earlier this year by African finance ministers.

Malpass also called for efforts to address the unsustainable debt levels of many developing countries, noting that the debt burden of low-income nations rose 12 per cent to a record US$860 billion in 2020. — Reuters

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