https://www.wsj.com/articles/to-cope-with-covid-the-worlds-poor-need-debt-relief-11604535612?mod=opinion_lead_pos7
The Covid-19 pandemic has taken lives and disrupted livelihoods in every corner of the globe. It has knocked more economies into simultaneous recession than at any time since 1870. According to World Bank estimates, in its first year it may push up to 150 million people into extreme poverty, ending two decades of steady progress on poverty reduction.
The current crisis stands in contrast to the recession of 2009, when much of the damage fell on financial assets and advanced economies were hit harder than developing countries. This time the economic downturn is much broader and deeper, and it has had an outsize impact on the poorest countries and the poorest people within each country, adding to inequality. It has hit workers whose jobs are unsteady or undocumented, and many of the most vulnerable.
The World Bank Group has moved rapidly to deploy its full financial capacity. We are on track to commit a record $160 billion over 15 months, and 40% of this amount was committed in the first six months. Our funding helps developing countries tackle the health, economic and social impacts of the pandemic. But even with the World Bank Group delivering massive positive net flows, the poorest countries need much more help.
For the most impoverished countries, the crisis and associated economic shutdowns came at a moment of particular peril. In 2019 almost half of all low-income countries were assessed by the World Bank and the International Monetary Fund to be either in debt distress or at a high risk of it. With the pandemic, the debt burden has gotten much heavier due to the devastating contraction in output, remittances and family income across the developing world. If this mounting debt goes unaddressed, it could lead to a lost decade for the world’s poorest people.