Washington: The world is experiencing one of the deepest recessions since the Great Depression in the 1930s owing to the novel coronavirus, World Bank President David Malpass has said, terming the COVID-19 pandemic a "catastrophic event" for many developing and the poorest countries.
He told reporters that given the extent of the economic contraction, there was a rising risk of disruptive debt crises in countries.
So that has got a lot of focus here at the meetings, Malpass told the media on Wednesday at the start of the annual meetings of the International Monetary Fund and the World Bank.
"The recession has been deep, one of the deepest since the Great Depression. And for many developing countries, and for the people in the poorest countries, it is truly a depression, a catastrophic event. It is continuing to add to the ranks of those in extreme poverty," he said.
That is the focus of this meeting and the focus of their actions, he said, adding that the World Bank was building as big a growth programme for countries as they can in this fiscal year. A day earlier, the Board approved the extension of the health emergency programmes to up to USD 12 billion for vaccines and therapeutics and distribution of those in countries that do not otherwise have access.
Responding to a question, Malpass said that the world was currently experiencing a K-shaped recovery. That means that the advanced economies have been able to provide support, especially for their financial markets and for people that have jobs that can be done by working from home. But people that are in the informal economy have lost their jobs, and are depending on social protection programmes, he said.
For the developing countries, and especially the poorest developing countries, that downward leg in the K is an increasingly desperate recession or depression that is facing people in the poorest countries because of the loss of jobs, the loss of income, and also the loss of remittances coming from workers, working outside the country, Malpass said.
"What we're trying to do at the World Bank is recognise that problem and provide extra support for social protection for the poorest in countries, also recognising the agricultural challenges," he said.
The president welcome countries that are keeping open their export markets, and also countries that are able to change their subsidy systems in order to allow more food availability within their economies during this very challenging time.
Malpass said that the first priority was saving lives, people's health, and safety.