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Wednesday,
March 25, 2020 / 5:33 PM / By The World Bank Group /
Header Image Credit: EcoGraphics
The World Bank Group and International Monetary Fund
have issued the following joint statement to the G20 concerning debt relief for
the poorest countries:
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 G20 leaders 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 (April 16/17).
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.
Borrowing Countries
Eligibility for IDA support depends first and
foremost on a country's relative poverty, defined as GNI per capita below an
established threshold and updated annually ($1,175 in fiscal year 2020).
IDA also supports some countries, including several
small island economies, that are above the operational cutoff but lack the
creditworthiness needed to borrow from the International Bank for
Reconstruction and Development (IBRD). Some countries, such as Nigeria and
Pakistan, are IDA-eligible based on per capita income levels and are also
creditworthy for some IBRD borrowing. They are referred to as “blendâ€
countries.
761 countries are currently eligible to receive IDA
resources.
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