The step is necessary to resume investments, the organization says
The World Bank will look for solutions to the mounting challenges facing developing countries, the organization’s president, David Malpass, has vowed ahead of its spring session.
“Resolving the impasse in debt restructurings, especially for the world’s poorest countries, is going to be at the center of discussions,” Malpass wrote on Sunday in a blog. The World Bank Group-IMF Spring Meetings are set to be held this week.
He indicated that he will discuss the issue with IMF Managing Director Kristalina Georgieva and the finance ministers of India, Ethiopia, and Jamaica. “I’m looking forward to discussions of the debt crisis itself and approaches to achieving debt transparency and sustainability,” Malpass wrote.
The official added that he would like to see “serious consideration of a debt ‘standstill’ meaning formal debt service suspension at the request of the debtor country at the beginning of debt restructuring process.”
Malpass outlined two fundamental challenges, asserting that the debt restructuring process has not moved forward significantly, and that there has not been enough discussion on ways to take action toward debt sustainability.
According to the World Bank president, creditors are spending “vital months” discussing issues that should be agreed on beforehand, such as steps in the restructuring process, the process and timeline to reconcile debts, and how to handle cut-off dates.
“It is urgent that we make progress: countries need to achieve transparent, sustainable debt burdens in order to restart investment, which has slowed to a standstill,” Malpass stressed.