The World Bank Group (WBG) and the International Monetary Fund (IMF) on Wednesday urged creditors to suspend debt payments of the world’s poorest countries in the wake of the coronavirus pandemic.
In a joint statement on the eve of the G20 virtual summit on COVID-19, the institutions said the global crisis will have “severe economic and social consequences” in International Development Association (IDA) countries.
“IDA countries, [are] home to a quarter of the world’s population and two-thirds of the world’s population living in extreme poverty,” read the statement.
IDA countries, which are currently 76 in number, had gross national income per capita under $1,175 in 2020, according to the association’s website.
“This [suspension of debt payments] will help with IDA countries’ immediate liquidity needs to tackle challenges posed by the coronavirus outbreak and allow time for an assessment of the crisis impact and financing needs for each country,” read the statement.
“We invite G20 leaders to task the WBG and the IMF to make these assessments, including identifying the countries with unsustainable debt situations, and to prepare a proposal for comprehensive action by official bilateral creditors to address both the financing and debt relief needs of IDA countries.”
Leaders of G20 countries will hold a virtual meeting on the COVID-19 pandemic on Thursday, which will be chaired by Saudi Arabia’s King Salman bin Abdulaziz Al Saud.