According to the Head of the World Bank, the most affected nations around the globe due to the COVID-19 crisis are moving towards depression.
An ambitious debt relief plan is called by the World Bank for poor countries due to its shift towards recession. An extra hundred million people have been pushed into poverty by the COVID-19 crisis, according to the figures of the World Bank that is due out next month. The economic fallout from COVID-19 mostly affected countries, which means it is necessary to go beyond the repayment holidays offered by rich countries at the beginning of the year.
According to the president of the World Bank, the current crisis is worse than the financial crisis of 2008. The progress made over the last 20 years by the World Bank in the case of poverty resulted in the population coming out of extreme poverty. The major risk which will occur in the financial crisis is that the population will fall back into extreme poverty.
The GDP of poor countries is going down, but the debt level is remaining constant. Hence the debt problems are intensifying. The G7 industrialized nations are considering extending the debt repayment holidays which are due to end this year to 2021.
Debt distress in many countries where a major concern even before the pandemic. There was a huge rise in debt in poor countries and across the developing world. The World Bank has mobilized 160 billion dollars for loans and grants for relieving the immediate pressure on health systems, reducing the number of children out of school, and providing support for those who lost their income working in the informal economy and to prevent the threat of hunger. However, it would require trillions of dollars to boost the infrastructure of developing countries and to improve health and education systems. The threat to food security as progressed during the year. Food imports and decent harvest are keeping the threat of famine at the bay. The crisis has prevented many children from poor countries from going to school. Restricted access to education has adverse effects especially for young girls for whom there is a heightened risk of being married at a young age. However, the president of the World Bank, David Malpass is fundamentally optimistic the people will work through the crisis and will find a way through it.
