World Bank chief expects G-20 to extend debt payment freeze until end 2021

By Andrea Shalal

WASHINGTON, Apr 5 (Reuters) – World Bank President David Malpass said on Monday that he expects China, the United States and other economies of the Group of 20 to decide when they meet this week to extend the freeze on service payments. bilateral debt until the end of 2021.

The G-20 Debt Service Suspension Initiative had already helped countries defer some $ 5 billion in payments until the end of 2020, and another $ 7.3 billion in deferred payments are expected until June, Malpass told journalists.

Extending the debt payment freeze until the end of the year would save even more money that countries could use to fight the COVID-19 pandemic and support their economies, the official said, but did not give a specific estimate.

He assured that G-20 members would likely stipulate that such an extension would be the “last or final” offered.

Although a temporary freeze on payments would help, Malpass said long-term “real debt relief” would be needed to allow poorer countries to reduce their unsustainable burden of liabilities to a more moderate level.

Malpass asserted that China, by far the world’s largest official bilateral creditor, had been receptive to international engagement on the need for more transparency, as seen in the G-20 discussions on the issue in 2020, but argued more work is needed. about.

“We are making some progress, but I think much more needs to be done,” Malpass said during a panel discussion at the start of the spring meetings of the World Bank and the International Monetary Fund.

Malpass said that the World Bank’s main priority is to replenish the resources of the International Development Association, its institution to help the poorest countries, which it intends to achieve in December. He also said there could be room for a selective capital increase to address the specific needs resulting from the pandemic.

(Report by Andrea Shalal, Edited in Spanish by Manuel Farías)