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World Bank, IMF seek debt relief for IDA countries including Sri Lanka

Daily News 2020-03-27 04:00:54

WASHINGTON: The World Bank Group (WBG) and International Monetary Fund (IMF) in a joint statement to the G20called on all official bilateral creditors to suspend debt payments from IDA countries that request forbearance. “This will help with International Development Association (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.”

The joint statement to the G20was concerning debt relief for the poorest countries. Sri Lanka, Vietnam and Bolivia graduated from IDA at the end of the 2017financial year, but will receive transitional support on an exceptional basis through the IDA18period (Financial years 2018-20) according to the World Bank.

The coronavirus outbreak is likely to have severe economic and social consequences for IDA countries, home to a quarter of the world’s population and two-thirds of the world’s population living in extreme poverty.

With immediate effect—and consistent with national laws of the creditor countries—the World Bank Group (WBG) and the International Monetary Fund (IMF) call on all official bilateral creditors to suspend debt payments from IDA countries that request forbearance.

This 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.

“We invite G20leaders 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. We will seek endorsement for the proposal at the Development Committee during the Spring Meetings on April 16/17,” the statement stated.

The World Bank Group and the IMF believe it is imperative at this moment to provide a global sense of relief for developing countries as well as a strong signal to financial markets. The international community would welcome G20 support for this Call to Action.