World Bank to introduce ” debt pause option” for countries in event of crisis

The World Bank is mulling introducing a pause mechanism if low-income countries are hit by a crisis.

This is according to the multilateral lender’s President Ajay Banga who spoke in Paris during a two-day summit for a New Global Financing Pact.

He told a summit on financing the fight against climate change that the multilateral lender would adopt a new approach that “significantly expands the World Bank’s toolkit.”

The most important measure would be offering “a pause on debt repayments so countries can focus on what matters when a crisis hits and stop worrying about the bill that is going come,” he added.

The idea has been promoted by the prime minister of Barbados, Mia Mottley, who has become a leading champion for low-income countries as well as fellow low-lying island nations.

The World Bank, the sister organisation of the International Monetary Fund, is a top public lender for countries to finance their infrastructure and other projects.

The two-day Summit for a New Global Financing Pact in Paris has seen calls for major reform of the nearly 80-year-old institutions, with French President Emmanuel Macron calling them “not completely suited” to tackle current challenges.

United Nations Secretary-General Antonio Guterres said: “It is clear that the international financial architecture has failed in its mission to provide a global safety net for developing countries.”

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Lawrence Baraza

Lawrence Baraza is a dynamic journalist currently overseeing content at Metropol TV Digital. With a keen focus on business news and analytics, Lawrence guides the platform in delivering insightful, data-driven content that empowers its audience to make informed decisions. Lawrence’s commitment to quality and his ability to anticipate market trends make him a key figure in the digital media landscape. His work continues to shape the way business news is consumed, making a significant impact in the field.

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