Covid drove 100mn into poverty: WB chief

WASHINGTON/PARIS: The coronavirus pandemic may have driven as many as 100 million people back into extreme poverty, World Bank president David Malpass warned on Thursday.

The Washington-based development lender previously estimated that 60 million people would fall into extreme poverty due to Covid-19, but the new estimate puts the deterioration at 70 million to 100 million, and he said “that number could go higher” if the pandemic worsens.

The situation makes it “imperative” that creditors reduce the amount of debt held by poor countries at risk, going beyond the commitment to suspend debt payments, Malpass said in an interview with AFP.

“The debt vulnerabilities are high, and the imperative of getting light at the end of the tunnel so that new investors can come in is substantial,” Malpass said.

Advanced economies in G20 already have committed to suspending debt payments from the poorest nations through the end of the year.

But Malpass said that will not be enough, since the economic downturn means those countries, which already are struggling to provide a safety net for their citizens, will not be in a better position to deal with the payments.

The World Bank has committed to deploying $160 billion in funding to 100 countries through June 2021 in an effort to addresses the immediate emergency, and about $21 billion had been released through the end of June. But even so, extreme poverty, defined as earning less than $1.90 a day, continues to rise.