The extreme poverty that is increasing rapidly in the global village

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The World Bank examines the debt reduction measures of the world's poorest countries. Meanwhile, it emphasizes the importance of China's role, which accounts for a large portion of lending to poor countries.

• Expected rapid increase of the global poorest

Global extreme poverty growing rapidly

Due to the spread of the new coronavirus infection (Corona 19), there are concerns that about 100 million people worldwide may fall into extreme poverty with a daily income of less than 1.9 dollars (2,200 won). The World Bank estimates that 70 million to 100 million people could fall into extreme poverty due to the global pandemic of Corona 19 in China. This is more than the estimated 60 million people in extreme poverty in early June of this year, so in about three months, the population was increased by 10 to 40 million. And if the situation persists or worsens, it is estimated that the number could increase further.

It is not enough to extend the maturity.

The World Bank plans to provide a total of 160 billion dollars (189.4 trillion won) to 100 developing countries affected by the coronavirus by June next year, and has already executed 21 billion dollars (24.8 trillion won) by June this year. However, it is emphasized that it is inevitable for the rich countries to forgive the debts of poor countries as the rise of the extreme poverty has not stopped. Previously, the 20 major countries (G20) extended the debt repayment obligations of the least developed countries by temporarily deferring maturity until the end of this year, but this is not enough. In addition, private finance companies are disappointingly slow to extend the maturity of debt in poor countries.

New investment incentives are needed

It is difficult for the poorest countries to provide social safety nets to their citizens, so they will not be able to repay their debts in the event of an economic downturn caused by the novel Corona 19. do. In addition, while the governments of developed countries are expanding their fiscal policies, they are generously supporting developing countries, and the most important role that developed countries can play for developing countries is to reorganize the market as a supply market for growth. It is to open.

• Debt reduction measures in poorer countries

At the recent G7 meeting of major countries presided over by the U.S. administration (Ministry of Finance), each country is aware of the economic recovery, but is concerned about the debt issue. As far as the debt issue is concerned, it is important to fully implement the debt repayment freezes agreed by the G20 in the poorest countries, and additional actions will be considered, including extending this to 2021 (next year). Meanwhile hit the whole world

For one novel Corona 19, it emphasizes the need to distribute vaccines or therapeutic drugs. On the other hand, the World Bank considers the debt reduction method of the poorest countries, not just repayment delays. This is to provide incentives to more investors, and in the coming months or coming October, the World Bank and the International Monetary Fund (IMF) Fund) It is stated that related contents can be presented at the annual general meeting. Owl

It is pointed out that although reductions were decided during the debt crisis in Central and South America in the 1980s, it took a long time to actually implement it, and the situation was seriously unfolded. According to World Bank data, about 60% of loans that require repayment within the year in the poorest countries need to be repaid to China. Accordingly, most of China's loan terms to the poorest countries are not transparent, highlighting the importance of China's participation in debt reduction.

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