World Bank Group President David Malpass said on Tuesday that he is frustrated at the reluctance of private creditors to participate in a debt relief program for the world’s poorest countries and believes that some countries are worrying too much about their credit ratings.
Malpass told reporters on a conference call that 14 poor countries have accepted offers to suspend payments on official bilateral debt, with another 23 expected to request forbearance.
Some of the world’s poorest countries are reluctant to seek debt relief under the G20-backed program out of concern it could harm their credit ratings and future market access.
Malpass said some countries have been “overestimating the importance” of the credit ratings, and in the current environment they would be better off looking at their overall level of resources, which may increase if they took the debt relief offer.
He said he welcomed Chinese President Xi Jinping’s endorsement of the program but said he is “somewhat frustrated by the slow pace” of acceptance by the private sector.
“Commercial creditors are still by and large taking payments from even the poorest countries, and there needs to be faster movement toward the commercial creditors meeting the goals of the G20 announcement of the bilateral debt suspension.”
Malpass said the World Bank has now launched emergency coronavirus aid programs in 100 developing countries, with commitments for concessional financing and grants of about $5.5 billion so far.
Malpass told reporters that the global pandemic and associated economic shutdowns could push as many as 60 million people into extreme poverty, erasing the previous three years of poverty alleviation, with a global economic contraction of perhaps 5% this year.