Source::WASHINGTON (AFP)
AFP
WASHINGTON
The global economy is facing "staggeringly large" losses and the recovery effort is hampered by a shortage of resources to make up for the damage caused by the coronavirus pandemic, World Bank President David Malpass said on Tuesday.
While the Washington-based development lender has rushed out new programs to deploy USD 160 billion in funding to 100 countries in an effort to addresses the immediate emergency, the crisis will force developing nations to rethink the structure of their economies, Malpass told AFP in an interview.
Initial estimates of USD 5 trillion in economic value destroyed by the COVID-19 measures likely falls far short of the actual damage that will be done by the efforts to contain the virus, he said. The bank warned that the worldwide recession will drive 60 million people into extreme poverty but Malpass said that grim projection likely will become much worse as the crisis progresses. As he deals with the emergency, what keeps the World Bank chief up at night? "Not enough resources," he said. "I keep looking... for others to add resources to the programs that we have up and running," among them direct cash payments to help the most vulnerable people in developing nations, Malpass said.
The World Bank will release its updated Global Economic Prospects (GEP) growth forecasts next week, but the scope and speed of the pandemic's impact almost defies description, and will leave long-lasting scars.
While advanced economies will face the deepest downturns in percentage terms, "in many ways the more dangerous contractions are in the poorest countries, because they were closer to the poverty line before the pandemic."
The deterioration in extreme poverty in large part will depend on how soon advanced economies can reopen, since developing nations depend on markets in rich countries, he said. A country that had been working to build bigger tourism sectors will need to find a way to "build workers skills that will fit into a global economy... where there's less tourism and more need for food safety (and) for diversity of food sources."
Malpass also warned that the "staggering" number of children out of school is creating "learning poverty" that will have larger consequences for the social fabric. The bank's GEP report warns the current crisis will "exacerbate the multi-decade slowdown," and it revives some of the free-market policy recommendations long promoted by the World Bank and its sister organization, the IMF, calling for "comprehensive policies to boost long-term growth... to make future economies more resilient."
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