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The route to get Latin American economies afloat includes aid to the most vulnerable populations, strong international trade and the possibility of restructuring government debt with private investors, said David Malpass, president of the World Bank, in a virtual press conference .
The agency estimates that some 100 million people in the world fell into poverty due to the economic impact of the pandemic and this "has been particularly evident in Latin America." The bank expects that by June of this year it will have allocated 10.000 million dollars for different aid programs in more than 24 countries in the region, including the Caribbean.
Since the crisis and the global financial investment climate, Latin American countries have resorted to debt in order to pay for spending on social programs and economic stimulus. This debt is already becoming too heavy a weight and the World Bank he hopes that at least the poorest countries will see their debts canceled or restructured while the recovery gets under way.
“For a year, we have been working on the payment moratorium and also the G20 has presented a common framework for debt reduction, which recognizes that the burden and payment of existing debt are using a very important fiscal space in the countries, space that is needed for social safety nets, for education, health, for people's basic needs,” Malpass said. "If countries are paying their creditors, that depletes available resources," he added.
Malpass recalled his work at the US Treasury Department when, in the late XNUMXs, United States agreed on Brady plan, which consisted of granting bonds to Latin American countries that were immersed in a debt crisis. “That led to a lost decade. This time we have to try prevent a debt crisis spread,” Malpass said.
“So we are trying to avoid a situation where the debt is simply rolled over at a high interest rate and then continues to grow in the future. That requires official bilateral creditors, private sector creditors, to work to find lower interest rates for the various debts that burden the region,” he assured. Source The Country
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