WASHINGTON: World Bank President David Malpass on Monday chided other development banks for lending too quickly to heavily indebted countries, saying some were helping worsen already-challenging debt situations.
Malpass said at a WB-International Monetary Fund (IMF) debt forum in Washington that the Asian Development Bank (ADB), the African Development Bank (AfDB), and the European Bank for Reconstruction and Development were contributing to debt problems.
“We have a situation where other international financial institutions (IFIs) and to some extent development finance institutions (DFIs) as a whole, certainly the official export credit agencies, have a tendency to lend too quickly and to add to the debt problem of the countries,” Malpass said.
He said the ADB was “pushing billions of dollars” into a fiscally challenging situation in Pakistan while the AfDB was doing the same in Nigeria and South Africa.
A spokesman for the ADB could not immediately be reached for comment.
The Manila-based development lender in December approved $1.3 billion in loans for Pakistan, including $1bn for immediate budget support to shore up the country’s public finances and $300 million to help reform its energy sector.
The loans came as the country is struggling with billions of dollars in debt to China from Belt and Road infrastructure projects, which helped cause Pakistan to turn to the IMF for a $6bn loan programme in 2019.
Malpass said there needed to be more coordination among IFIs to coordinate lending and maintain high standards of transparency.
Published in Dawn, February 12th, 2020