Exclusive: World Bank president says more work to be done to escape pandemic’s ravages
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For many of the developing countries, conditions are not getting better
David Malpass, World Bank
Canadians and other rich-country residents will spend the next several months bickering over who should be at the front of the line to get jabbed with a vaccine, but the poorest countries will continue to go without, ensuring their health systems will remain strained. Their export industries will struggle to recover and tourism will continue to suffer. Remittances, an important source of income for developing countries, will stay depressed until the economies of richer countries are fully mended.
That is at least a year away, if not longer. The Bank of Canada has said it intends to keep the benchmark interest rate pinned near zero until 2023, because that’s how long its models say it will take for this country’s economy to get back to where it was before the crisis.
“This was a very deep recession and it’s going to take some years, really, to recover from that,” said Malpass, a former Wall Street economist who was serving at the U.S. treasury department when President Donald Trump nominated him to lead the World Bank last year. “For people who were already on the brink of poverty, their number of years in poverty … is going to go on for quite some time.”
That’s reason enough for a country such as Canada to set aside some of its emergency spending to aid poorer countries. Macklem’s latest remarks also show why international development spending should continue, even as federal debt surges in response to the crisis at home.
It’s going to take some years, really, to recover
David Malpass, World Bank
Canada’s economic performance after the Great Recession was lacklustre because exports and business investment were weak. That was mostly our own fault: we conducted most of our trade with places hardest hit by the recession, and our companies were uncompetitive. Macklem said there is reason to think Canada will do better in recovering from the COVID-19 recession, which means we have an interest in doing our part to make sure that recovery occurs.
