Debt pause clause soon to be taken up for board approval: World Bank CFO

Speaking at the CII B20 session, world bank official said that countries need to be financially resilient when faced with natural disasters and other kinds of crises

The World Bank board is soon going to take up the debt pause clause for approval. The clause will allow natural disaster prone countries to pause their debt payments for a few years in case they get hit by a calamity, said World Bank Chief Financial Officer Anshula Kant on Friday.

Speaking at the CII B20 session on ‘Actions for Global Economic Recovery’, the World Bank official said that countries need to be financially resilient when faced with natural disasters.

She said that apart from the debt pause clause, the multilateral lender has put in a crisis toolkit consisting of Catastrophe Insurance Product which supports countries in the aftermath of natural disasters and Rapid Response Option which is available to all countries, under which they can repurpose their existing capacities immediately and get liquidity in hand to deal with the disaster. 

Besides NK Singh, President, Institute of Economic Growth added that the innovative financing arrangements are needed to bridge and raise close to $400 billion for strengthening financial protection strategies and financial instruments for insulating the world from future economic shocks. 

He also called upon the multilateral banks to undergo reforms in order to effectively help raise this needed capital to deal with the prevailing global headwinds.