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Lawmakers urge IMF, World Bank to cancel poor countries' debt

By Reuters | May 14th 2020 at 00:00:00 GMT +0300

Over 300 lawmakers from around the world on Wednesday urged the International Monetary Fund and World Bank to cancel the debt of the poorest countries in response to coronavirus pandemic and to boost funding to avert a global economic meltdown.

The appeal came in a letter delivered to the heads of the World Bank and the IMF, as well as US President Donald Trump and other world leaders amid growing concern that the pandemic will devastate developing countries and emerging economies. They asked the institutions to respond in 15 days.

The virus has infected more than 4.2 million people globally and killed 287,349, a Reuters tally showed.

Widespread shutdowns aimed at containing the virus are taking a huge toll on the global economy, and especially poor countries with weak health systems, high debt levels and few resources to manage the dual health and economic crises.

IMF Managing Director Kristalina Georgieva on Tuesday said the Fund was "very likely" to revise downward its forecast that global output would shrink by 3 per cent in 2020, and said developing countries would need more than $2.5 trillion (Sh266 trillion) in financing to weather the storm.

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Former US presidential candidate Senator Bernie Sanders, who led the initiative along with Representative Ilhan Omar, a Democrat from Minnesota, said poor countries needed every cent to care for their people, instead of servicing the "unsustainable debts" they owe financial institutions.

Cancelling their debt was "the very least that the World Bank, IMF and other international financial institutions should do to prevent an unimaginable increase in poverty, hunger, and disease that threatens hundreds of millions of people," he said.

The lawmakers welcomed a move by the IMF to cover the debt service payments of 25 of the poorest countries for six months, but said further efforts were needed.

The World Bank has said it will look at ways to expand its support for the poorest countries.

In the letter, parliamentarians from two dozen countries on all six continents, said debt service obligations of the poorest countries should be cancelled outright.

International Monetary Fund World Bank Kristalina Georgieva
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