According to World Bank President David Malpass, the World Bank intends to raise $100 billion in donations for the International Development Association fund for poorer countries to combat “tragic reversals in development” caused by the COVID-19 epidemic.
Global growth is expected to be 5.7 percent in 2021 and 4.4 percent in 2022, according to the multilateral development bank. However, Malpass warned that differences between industrialized and developing economies are widening, delaying attempts to alleviate severe poverty by years, if not decades.
“Amid persisting supply chain delays and COVID-19 increases, incoming high-frequency data points to a weakening pace in global activity,” Malpass added. “The picture for much of the developing world is bleak, with low immunization rates rising, inflation, inadequate policy support, too few employment, and food, water, and electricity shortages.”
According to Malpass, inequality is rising drastically, with advanced economies’ per capita income anticipated to climb by about 5% in 2021, but only 0.5 percent in low-income countries.
He said that wealthy nations had already reached pre-pandemic levels of economic growth, but that output in underdeveloped countries will be about 4% lower next year than projected before the outbreak.
“What I call terrible reversals in growth are occurring across many dimensions,” he remarked. “Progress in decreasing extreme poverty has been stalled for years, perhaps a decade in some cases.”
To address the growing inequities, he said, the World Bank is seeking $100 billion in donations from advanced economies to replenish the IDA fund, echoing a suggestion made by African finance ministers earlier this year.
Malpass also called for action to alleviate many developing countries’ unsustainable debt levels, noting that the debt load of low-income countries increased by 12% to a record $860 billion in 2020.
