The World Bank Group has advised Nigeria, and other emerging markets to cut wasteful expenditure and seek debt restructuring to improve economic wellbeing of their people.
President of the Group, David Malpass, called for greater global cooperation, including private sector participation, to provide debt relief to the world’s poorest countries and fund growth-enhancing investments.
Speaking in Khartoum, Sudan, Malpass said reversals in development threaten people’s lives, jobs, livelihoods, and sustenance.
In many places around the world, poverty is rising, living standards and literacy rates are falling, and past gains on gender equality, nutrition and health are sliding backwards.
For some countries, the debt burden was unsustainable before the crisis and is getting worse. Rather than gaining ground, the poor are being left behind in a global tragedy of inequality. This drastic narrowing of economic and social progress is creating a time of upheaval in economics, politics and geopolitical relationships.
Besides pushing for better debt management, Malpass, who spoke on the theme: “Development in a time of upheaval,” said:
Countries have to eliminate wasteful public expenditures, make service delivery more efficient, and reallocate public resources to their most productive uses.
This is also a time for proactive debt management to re-profile payments while international interest rates remain low. There need to be concrete steps to improve the transparency of debt contracts, increase accountability and ensure decisions draw on comprehensive information.
Lower-income countries need to prioritize concessional financing and avoid the high interest rate financing that has become increasingly problematic. Focusing this agenda for each country and measuring the progress will be critical.
Highlighting the importance of investing in people’s long-term health and education – the human capital agenda, Malpass said:
Strengthening education and health systems takes more than just providing budgetary resources in an efficient and prioritised way.
For example, aligning incentives for teachers and health care providers – public or private – with the needs of the people they serve is important. And finding scalable solutions to enhance health care and improve the quality of education, including through distance learning, is also critical.
Nowhere is human capital accumulation more important than in conflict-affected countries, where most poor people live today. Assisting refugees and host communities is a key priority. Security is essential, but soldiers can’t win the battle of development. Change is more likely to come from small victories won across millions of households over time.
Malpass noted the role the World Bank Group can play, saying:
The World Bank Group is uniquely endowed and positioned to support countries with the four priorities I have outlined — through finance and know-how for governments, while mobilizing the private sector. We have unmatched experience working with countries, using technical experts across all the key sectors.