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Last year, @ONECampaign advocated for the @WorldBank to suspend debt payments from poor countries.
They did not.
Their argument: It's better to provide more new money than to stop collecting debt payments.
So how did that go? [thread
] https://www.one.org/international/blog/world-bank-low-income-countries-covid-19/
They did not.
Their argument: It's better to provide more new money than to stop collecting debt payments.
So how did that go? [thread
] https://www.one.org/international/blog/world-bank-low-income-countries-covid-19/
Suspending debt service payments is one of the fastest, most effective means of freeing up cash in developing country budgets.
Instead of suspending payments, the World Bank’s strategy focused on providing new loans and grants to help countries deal with the crisis.
Instead of suspending payments, the World Bank’s strategy focused on providing new loans and grants to help countries deal with the crisis.
Between April & December 2020, the World Bank committed US$27.2 billion to DSSI countries.
That is more than over the same period in 2019 (+$10.9bn) and 2018 (+$8.1bn).
That is more than over the same period in 2019 (+$10.9bn) and 2018 (+$8.1bn).
Actually disbursing those funds is harder & takes longer.
Between April & December 2020, the World Bank disbursed $18bn to DSSI countries.
But most of that money was for projects approved long before: 68% was committed before 2020.
Between April & December 2020, the World Bank disbursed $18bn to DSSI countries.
But most of that money was for projects approved long before: 68% was committed before 2020.
The World Bank has only managed to disburse 21% of the funds it committed since April.
In the middle of a pandemic, speed matters.
In the middle of a pandemic, speed matters.
Not all countries are benefitting equally.
12 countries account for nearly ⅔ of disbursements. At the other end, 49 countries combined received less than 15% of the money.
https://go.one.org/3qWrqrh
12 countries account for nearly ⅔ of disbursements. At the other end, 49 countries combined received less than 15% of the money.
https://go.one.org/3qWrqrh
In most cases, WB disbursements do little more than compensate what DSSI countries are paying back in debt service.
Between April-Dec 2020, they repaid $2.8bn to the World Bank. In the first half of 2021 they owe $1.9bn more (equivalent hundreds of millions of vaccine doses).
Between April-Dec 2020, they repaid $2.8bn to the World Bank. In the first half of 2021 they owe $1.9bn more (equivalent hundreds of millions of vaccine doses).
No tool in the toolbox should be left unused.
Bilat creditors provided a suspension of debt service payments until June 2021.
But the World Bank, other multilaterals, & private creditors have refused to follow.
This will make the crisis worse, and recovery more difficult.
Bilat creditors provided a suspension of debt service payments until June 2021.
But the World Bank, other multilaterals, & private creditors have refused to follow.
This will make the crisis worse, and recovery more difficult.
