(Adds details, IMF move)
By Andrea Shalal
WASHINGTON, March 27 (Reuters) - The heads of the World Bank
and International Monetary Fund on Friday underscored the need
to provide debt relief to poorer countries hit by the
coronavirus pandemic, and said official bilateral creditors
would have to play a major role.
The IMF and the World Bank have both launched emergency
programs to offer grants and loans to member countries, with a
heavy focus on developing countries and emerging markets, some
of which are already in debt distress. They have also called on
official bilateral creditors to provide immediate debt relief to
the world's poorest countries.
"Poorer countries will take the hardest hit, especially ones
that were already heavily indebted before the crisis," the World
Bank's president, David Malpass, told the International Monetary
and Financial Committee, the steering committee of the IMF.
"Many countries will need debt relief. This is the only way
they can concentrate any new resources on fighting the pandemic
and its economic and social consequences," he said, according to
a text of his remarks.
Malpass said the bank had emergency operations under way in
60 countries, and its board was considering the first 25
projects valued at nearly $2 billion under a $14 billion
fast-track facility to help fund immediate health-care needs.
The World Bank was also working with 35 countries to
redirect existing resources to the pandemic, with almost $1
billion of those projects already approved. Overall, the bank
plans to spend $160 billion over the next 15 month, he said.
Malpass said the IMF and World Bank would present a joint
plan for debt relief at the institution's virtual Spring
Meetings in April, but gave no details.
The poorest countries face official bilateral debt service
payments of $14 billion in 2020, including interest and
amortization payments, Malpass said, of which less than $4
billion was owed to the United States and other Paris Club
members. China, a major creditor, is not a Paris Club member.
Given the large share of debt held by official bilateral
creditors, Malpass said it was critical to ensure their "broad
and equitable participation" in addressing the crisis.
The IMF's managing director, Kristalina Georgieva, warned
that half of the low-income countries were already in "high debt
distress" and much would depend on the official creditors.
She said there were already discussions among the world's 20
largest economies, the Group of 20, and in the Paris Club, but
there would also be a role for private creditors, as was the
case during the global financial crisis of 2008-2009.
"The sooner we do it, the better," she said. "The same way
the fund during the global financial crisis brought together
both official creditors and private creditors to assess a good
pathway through a dramatic crisis, we have to do it this time
around as well."
(Reporting by Andrea Shalal; additional reporting by Lisa
Lambert
editing by Chizu Nomiyama and Leslie Adler)