By Andrea Shalal

ROME (Reuters), – World Bank President David Malpass called Saturday on the leaders of Group of Twenty rich countries to accelerate work on restructuring debt for low-income nations. This included a freeze of debt payments and compulsory participation by private creditors.

Malpass stated to the G20 Leaders in Rome that there has been no progress regarding the reduction of the debt of the least developed countries and that it is urgent for action to get the matter moving again.

According to Reuters, the G20 leaders promised to increase their efforts in implementing the Common Framework on Debt Treatments. They also stressed the importance private sector participation. However, they did not include language on a new default, as per the text of their communiqué.

Many countries, including China, which accounts for 65% of the official bilateral debt in the world, have opposed any new debt service payment freeze.

Malpass this month demanded a debt-service freeze to the Common Framework. Malpass said the problems facing developing nations include the COVID-19 pandemic as well as the shortage of vaccines.

Malpass claimed that multiple issues are causing devastating reverses in development. Malpass cited increasing poverty rates, fragility, and increased vulnerability in countries like Sudan. At the same time, low-income nations’ debt rose to 12% over the pandemic. It also reduced their ability for investment in any other countries.

Malpass stated that “progress has stalled on debt.” I urge you to accelerate implementation of the Common Framework. Request transparency and reconciliation of debt. And, require participation from private creditors.

Malpass claimed that Kristalina Georgieva of the International Monetary Fund also favours a debt payment standstill. But, additional steps may be necessary to ensure there is a balance between sovereign and creditor debtors.