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Thursday, 25 February 2021

'Emerging markets have to prioritise lives and health to achieve economic recovery': WB president

To speed recovery, countries will need to maintaining core public and private sector businesses, while recognising that many businesses won’t survive the downturn, said World Bank Group president Malpass

Doaa A.Moneim , Thursday 15 Oct 2020
David Malpass,
David Malpass
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Emerging markets need to put saving lives and people's health and safety on the top of their priorities to be able to continue fighting the Covid-19 pandemic and to contribute to an economic recovery, President of the World Bank (WB) Group David Malpass siad.

Malpass statements came in his answer to an Ahram online question - submitted to a press briefing held on Wednesday as a part of the International Monetary Fund (IMF) and World Bank (WB) annual meetings that are held currently in Washington - on which procedures emerging markets have to take to fight the pandemic.

The IMF and the WB annual meetings held their annual meeting virtually because of the pandemic

Malpass added that procedures widely discussed, including social distancing and mask wearing, and proper healthcare if people contract the virus, as well as strengthening hospital systems, all remain important.

“And then, as we look at the next stage, 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,” Malpass had said in a press conference on the sidelines of the annual meetings.

In an email statement sent to Ahram Online by the World Bank's press briefing center, Malpass said "they will need to show flexibility in their economies, so that people can move to new jobs and positions, and all countries can be prepared for a post-Covid-19 global economy," in an answer to a question concerning the recovery phase in the emerging markets and how it can be acieved,

“We know it's going to be different from the pre-Covid-19 economy. We don't know exactly how — that will only evolve over time. 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,” Malpass added.

“These are all steps that we can do to strengthen the process and create a resilient recovery. Climate and lower carbon rebuilding efforts are a very important part of that. I spoke a week ago in Frankfurt on the importance of that process and gave some remarks on that," said Malpass.

Malpass added that Covid-19 has showed that national borders offer little protection against some calamities and has underscored the deep connections between economic systems, human health, and global well-being. In addition, it has concentrated world attention on building systems that will better protect all countries going forward, especially for the poorest and most vulnerable citizens.

“It is critical that countries work toward their climate and environmental goals. A high priority for the world is to lower the carbon emissions from electricity generation, meaning the termination of new coal and oil-dependent power generation projects and the winding down of existing high-carbon generators. Many of the largest emitters — in the developing world but, I must say, also in the developed world — are still not making sufficient progress in this area," according to Malpass.

Malpass unveiled at the press conference that the WB has remained the largest multilateral financier of climate action, as over the last five years it has provided $83 billion in climate-related investments.

To speed recovery, countries will need to maintaining core public and private sector businesses, while recognising that many businesses won’t survive the downturn, Malpass added.

Also, business environments need change and improvement to build a faster and more sustainable recovery.

“A key part of this process of change is for the ownership and repurposing of distressed assets to be resolved as quickly as possible. This will likely entail a combination of faster bankruptcy proceedings, new legal avenues for settling small claims, and other out-of-court alternatives such as arbitration. These are important building blocks for effective contracts and capital allocation, but only a few developing countries have them in place. The severity of the downturn makes the prompt streamlining and transparency of commercial law as vital for recovery as the availability of new debt and equity capital,” Malpass said.

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