World Bank urges for easing countries' debts

Tackling imbalance

When asked about the major challenges leading to unbalanced and inadequate development among and within countries in this era of the pandemic, Raiser said "the COVID pandemic is worsening global inequality".

"The advanced countries are recovering quickly, while, in 2021, low income countries will grow at the lowest rate in 20 years," he said.

Rapid recovery in the advanced countries "reflects stronger health systems and faster access to vaccines, allowing them to largely lift mobility restrictions in the course of this year, and greater policy space and hence the ability to reboot domestic demand through stimulus measures", he noted.

"Poor countries have enacted unprecedented measures to support their populations and businesses, but many don't have the means to keep up this support," he said.

He warned that the pandemic has also "had a devastating impact on the health and education systems, and the digital divide has meant that the poor have benefited far less from alternative online delivery modes", he said.

"The result is that key health indicators have gone in reverse and more than a billion school children have lost several weeks or months of effective learning, with a potential reduction in lifetime earnings of $10 trillion," he said.

"Rising food prices and remaining supply bottlenecks are adding to the challenge, causing growing food insecurity. This is clearly a major setback for development," he said.

Commenting on expected collaboration by countries in this regard, Raiser said, "Not all of these losses are irreversible, however, if the global community acts quickly to support the most vulnerable countries."

"First and foremost, the remaining gap in access to vaccines needs to be closed. Global production is estimated to reach 12 billion doses by year-end, enough to cover the world's adult population twice over. Concerted efforts are needed to help the poorest countries procure vaccines and deploy them quickly," he said.

External assistance can help countries rebuild health and education systems, Raiser noted.

"Targeted teaching strategies and regular assessments can reverse learning losses, vital public health services can be rebuilt and strengthened at relatively low cost," he said.

The World Bank official said countries will also "need assistance with designing appropriate exit policies from pandemic related support measures".

Beyond dealing with the immediate impacts of COVID-19, the crisis also "offers an opportunity to strengthen resilience", he said.

"For example, many countries have put in place stronger social protection systems which will serve them well to weather future shocks.

"In the private sector, in some countries, the crisis has led to a reallocation of jobs to more productive firms and accelerated the adoption of digital technologies. This will help enhance their competitiveness – government measures should shift from protecting the less productive firms toward encouraging and enhancing such reallocation," he said.

The crisis has also demonstrated that "countries more integrated into global value chains are more resilient, because they had options when domestic supply was interrupted", Raiser noted.

"Reducing trade barriers thus remains an important element of a robust policy framework," he added.

The growing awareness of the risks of climate change also offer the opportunity to use public investments to stimulate the recovery as a means to make economies more resilient and greener, according to Raiser.

"In sum, if governments and external development partners work together to strengthen policy frameworks, the recovery from COVID-19 could yet see renewed convergence between developing and advanced countries. But for this to happen, we must act quickly," he said.