As prepared for delivery
WASHINGTON, September 3, 2020—World Bank Group President David Malpass released the following remarks for today’s virtual G20 Foreign Ministers Meeting:
Good morning, Foreign Minister Faisal, and to all.
The COVID-19 pandemic has hit developing countries particularly hard due to capital outflows, declines in remittances, the collapse of informal labor markets and very limited social safety nets.
Poverty is rising rapidly, median incomes are falling, and growth is deeply negative. Debt burdens were already unsustainable for many countries and are rising to crisis levels. Children everywhere are out of school. Earlier this week, I joined the UN Secretary-General in an event on digital connectivity for education. World Bank programs are working to help leaders restart learning – by providing COVID-19-related equipment to make schools safer, helping reopen schools, and through support for more effective distance learning.
The pandemic threatens to push over 100 million people into extreme poverty and is exacerbating intense inequality throughout the world. The World Bank Group launched its first operations in April and took fast, broad action on COVID-19, quickly creating specific financing programs in over 100 countries. We are committed to financing access and distribution of vaccines for our clients and to working with GAVI, CEPI and the international community.
We’re committed to continue providing a very large net positive flow to developing countries during the next year. To increase fiscal space and create light at the end of the tunnel for the world’s poor, we have called for debt stock relief where appropriate. We welcomed the G20’s endorsement of a suspension of debt payments for the world’s poorest countries; are urging the G20 to extend the moratorium through 2021; and believe the reduction in the stock of debt needs to be high on the international agenda. The current environment of very low interest rates and bond yields, combined with an imbalance in the global system that favors wealthy creditors over the world’s poor, is a recipe for waves of excessive debt burdens for the world’s poorest countries. We need concrete steps to address the inequality and unfairness of the relationships that favor creditors. The lack of participation of commercial creditors in the debt moratorium has been very frustrating, reducing the effectiveness of the G20’s efforts.
Even so, we’ve made substantial progress in 2020 by publishing more information on debt, debt contracts, the collateral that has been restricted, and the non-disclosure clauses that burden sovereign contracts. We need to broaden the creditor information and participation, clarify the distinction between official and commercial creditors, and insist on comparable treatment by commercial creditors when official creditors provide relief. The moratorium itself has provided some fiscal space for participating countries, but much more needs to be done in order to achieve a more equitable outcome for people in developing countries.
I would also like to describe just two examples of our work in the most vulnerable populations, including refugees, where millions are facing a human catastrophe, including but not limited to COVID-19. Your decisions can make a huge difference. Security remains problematic due to deteriorating conditions around the world, and I urge you to address and resolve political problems where you can.
In Lebanon, this week, the World Bank Group released the Rapid Damage & Needs Assessment (RDNA), prepared in consultation with the EU and the UN. This assessment provides a framework for the incoming government to commit to implementing credible reforms that can unlock international financing and private investments. The World Bank has supported over US$3 billion worth of projects in Jordan and Lebanon to help both refugees and host communities. We have supported Lebanon by equipping governmental hospitals and increasing their ability to test and treat suspected cases, with focus on Syrian refugees.
In Sudan, we are combining resources from trust funds and – at the government’s request – we are designing an ambitious Cash Transfer program. We are also providing a maximum of US$400 million in a pre-arrears clearance grant and we are working closely with the government to get arrears clearance to pave the way for fresh financing from IFIs.
Those are two recent examples of our work, but in truth, COVID-19 has had a devastating impact in fragile and conflict-affected (FCV) countries and we are committed to protecting human capital, supporting the most vulnerable, and working toward a resilient recovery.
The above text has been updated for style and clarity