World Bank Group President David Malpass
Media Roundtable during Annual Meetings 2021
Washington, D.C., United States
Good morning, thank you David. Good morning everyone. I’m glad you were able to join.
We are having discussions this week, throughout the Annual Meetings we will cover a broad range of development issues – including the economic outlook, growth, vaccines, debt, climate, and trade. World Bank financing operations will be discussed and also our climate change action plan, which aims to help reduce greenhouse gas (GHG) emissions and improve adaptation.
We expect global growth of 5.7% in 2021 and 4.4% in 2022, these are very similar to our projections in the June Global Economic Prospects report. Incoming high-frequency data point to slowing momentum in global activity amid persistent supply chain bottlenecks and COVID-19 surges.
Moreover, the global recovery remains dramatically uneven. 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.
The inequality in the recovery is getting worse across country groups. Per capita income in advanced economies is expected to grow nearly 5% in 2021, but only 0.5% in low-income countries. It will take many developing countries years to reach pre-pandemic income levels. Even after two years of recovery, by next year output in developing countries is expected to be nearly 4% below pre-pandemic projections, whereas the advanced economies will be caught up. In IDA countries, output will remain 5.6 percent below pre-pandemic projections by next year. The pandemic has already tipped millions of people into poverty.
We’re witnessing what I call tragic reversals in development across many dimensions. Progress in reducing extreme poverty has been set back by years – for some, by a decade. Median incomes have declined instead of risen. Women were disproportionately harmed during the pandemic. They are recovering less now in the recovery. There’s been a tragic loss in human capital, including children missing a year or more of school.
It’s vital that we address these head-on by redirecting policies in both the advanced economies and in the developing countries so that growth and investment are more widespread, less concentrated at the top, and broader improvements in living conditions can be achieved.
The highest priority now is to secure access to vaccines and accelerate their deployment. I chair the Multilateral Leaders Taskforce on COVID-19 vaccines, which includes Tedros, Ngozi and Kristalina. We’ll hold our fifth meeting shortly. We’ve published extensive data on pledges, actual vaccinations, and the ways to close that gap. We’ve urged governments that have sufficient doses to swap early deliveries to allow more vaccinations in developing countries.
The World Bank Group’s support for the poorest countries is at an all-time high, including grants and highly concessional loans to countries eligible to borrow from IDA. We have COVID-related health programs in nearly 150 countries and vaccination programs in 61 countries. We’re working to help countries secure more doses, deploy them effectively and communicate well to reduce hesitancy. I was recently in Sudan and Jordan and observed their vaccination efforts firsthand, which are accelerating. We have nearly a quarter of a billion doses under contract with Bank financing.
Another priority is to address debt challenges confronting many developing countries. Today, we’re also releasing the annual International Debt Statistics – or IDS – report for 2022. It identifies a significant 12% increase in the debt owed by low-income countries, which reached $860 billion.
As of mid-2021, over half of IDA countries – those are the world’s poorest countries – are in external debt distress or at high risk of it. A comprehensive approach, including debt reduction, swifter restructuring and more transparency is needed to help countries assess and manage their external debt risks and work toward sustainable debt levels and terms. These are fundamental to supporting health systems, education, and infrastructure and creating growth, investment, and prosperity. Enhanced and accelerated implementation of the Common Framework will be critical in achieving this much-needed debt transparency and sustainability.
An important agenda item for the Annual Meetings is financing needs to address the challenges I mentioned.
With the expected replenishment of IDA later this year, African heads of state have called for donors to be ambitious in providing their support for IDA’s critical mission. Financing needs in the poorest countries are urgent and will remain elevated in the years ahead, and a successful IDA20 replenishment is vital.
Resources will be an important topic of discussion this week, as we focus on prioritization and scalability. We will need the active participation of the public and private sectors, civil societies and foundations, indeed the whole international community.
I look forward to discussing these important topics with our shareholders this week.
I’d be happy to take your questions.