Debt Crisis Looms for Poor Countries

Low-income countries have been especially hard hit by the economic downturn caused by the Covid-19 pandemic, leading to more people needing assistance for their basic needs. This means that governments are hard pressed to find new sources of funding and even to service existing debts. The 76 countries with the lowest incomes owe at least U.S.$573 billion in debt and are due to pay about U.S.$41 billion to service those debts in 2020, according to the ONE Campaign. But those bills are competing with rising domestic demands, dwindling tax revenues, falling remittances, and shrinking economies. World Bank Chief David Malpass has hinted at some relief for countries with "unsustainable" debt, in an Ocober 5 speech, calling for debt write-offs as the world faces what he called an "inequality pandemic".