COVID-19 crisis

World Bank Annual Meeting: Minister Müller backs debt relief proposal

Lettering on the wall of the main World Bank building in Washington saying "World Bank".

16.10.2020 |

On the occasion of the World Bank Annual Meeting, German Development Minister Gerd Müller stated:

"The COVID-19 crisis is hitting the poorest countries hardest. Global hunger has been halved since 1990; yet, this year alone, 130 million people will be thrown back into hunger and poverty. The countries urgently need new liquidity to fight hunger and the economic crisis. The debt moratorium that was agreed in April has already helped 46 of the poorest countries save some five billion US dollars in interest payments, using them instead to finance COVID-19 response measures. The envisaged extension of the debt freeze by the G20 until mid-2021 is important, yet by far not enough. This crisis won't be over after a year. That is why the investment funds and private banks also need to become part of the endeavour instead of simply continuing to generate high returns and collect repayments. Chinese lenders must also play their part in these efforts.

And in addition, the threat of a new debt crisis has not gone away; it is still very present. 100 billion dollars of capital has exited the developing countries; several currencies have fallen by roughly 35 per cent and commodity prices have crashed. This will drive many countries to the brink of collapse.

As a next step, we need a cancellation of debt for the poorest countries. I support the recent initiative put forward by the World Bank's President Mr Malpass. This will require a new debt transparency initiative. All funding channels must be disclosed. Not a single euro must be lost to corruption. The interest that is saved needs to be invested in health and social security."

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