Washington: World Bank President David Malpas has said that the world is suffering from the deepest recession since the Great Depression of the 1930s due to the Corona Virus pandemic and that he has been developing many of the Covid-19 epidemics. And for the poorest countries “terrible event”.
He told reporters that the risk of the debt crisis has increased in many countries given the extent of economic contraction. On Wednesday, on the occasion of the annual meeting of the International Monetary Fund and the World Bank, he told reporters that this issue has received a lot of attention in the meetings here.
He said, “The recession is very deep, one of the biggest recession since the Great Depression.” And for many developing countries and people in the poorest countries, it is indeed a terrible event of depression. “
He said that the focus of this meeting and action is to provide relief to these countries and the World Bank is preparing a big growth program for these countries. In response to a question, he said that the World Bank feels that ‘K’ size is improving at this time. The improvement of ‘K’ size means the improvement in different parts of the world after the recession.
Responding to a question, Malpass said that the world was currently experiencing a K-shaped recovery.
That means that the advanced economies have been able to provide support, especially for their financial markets and for people that have jobs that can be done by working from home. But people that are in the informal economy have lost their jobs, and are depending on social protection programs, he said.
For the developing countries, and especially the poorest developing countries, that downward leg in the K is an increasingly desperate recession or depression that is facing people in the poorest countries because of the loss of jobs, the loss of income, and also the loss of remittances coming from workers, working outside the country, Malpass said.
“What we’re trying to do at the World Bank is recognize that problem and provide extra support for social protection for the poorest in countries, also recognizing the agricultural challenges,” he said.
The president welcomes countries that are keeping open their export markets, and also countries that are able to change their subsidy systems in order to allow more food availability within their economies during this very challenging time.
Malpass said that the first priority was saving lives, people’s health, and safety.
That involves procedures that have been widely discussed of social distancing and masks and proper health care if people contract the virus, strengthening of hospital systems and so on. All of those are important, he asserted.
“And then, as we look at the next stage, what I think we can be talking about is that it’s going to be a prolonged downturn for many of the countries, there won’t be as fast a rebound in tourism, for example, as many would like to have,” he said.
There will need to be flexibility in economies, so that people can move to new jobs and positions, and the country can be prepared for a post COVID-19 global economy, Malpass said.
Acknowledging that it is going to be different from the pre-COVID-19 economy, he noted that one does not know exactly how and that will only evolve over time.
“And so, having countries preserve some of their core industries and businesses, and then keeping families together. We’re providing social safety nets to try to help provide cash grants for people, for example, in Brazil, we have a sizable programme. In Jordan, we support Jordan’s sizable programme and elsewhere around the world, he said.
The World Bank is encouraging countries to spend in the first instance on health programmes, on social programmes, and on education, Malpass said, adding that a critical step for countries is to reopen schools.
“We think there are as many as a billion children still out of school in the developing world. And in those cases, learning goes backward, which has a huge future cost for countries. This is particularly true for girls that are left out at a critical point in their lives, left out of school. That’s a high priority, he said.
