World Bank-IMF Launches a Climate Change Platform for Developing Countries

The World Bank and the International Monetary Fund have launched a platform to advise developing countries to provide conservation and climate activities.

Current scenario

According to the World Bank and IMF, there are two major global problems. They are as follows:

• There's a need to reduce or restructure the heavy debts of the developing countries.
  
  
• There's a need to reduce fossil fuel emissions that result in climate change

Therefore, the solution of climate change in the debt restructuring process will help motivate sovereign creditors to pardon some per cent of developing countries' debt. Initially, international financial organizations would negotiate to reduce developing countries' debt, citing climate change and COVID-19 as the crisis.

The climate change platform is significant as many developing countries struggle for their food supply and infrastructure due to climate change. These countries are not emitting considerable amounts of the greenhouse. However, they are suffering the brunt of the impact from the rest of the world. This platform will address this issue.

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About the stage

• Advisors on this platform will include officials from the United Nations, private investors and rating agencies.
  
  
• G20 economies also support this platform.
  
  
• Countries like Chad, Ethiopia, and Zambia have initiated negotiations with creditors under the new platform.

Apart from the World Bank and the International Monetary Fund initiatives, other initiatives have been taken to reduce the debt of developing countries. One such initiative is the debt service suspension initiative.

Debt Service Suspension Initiative

China, the USA and G20 members granted temporary relief to developing countries by suspending debt service payments from countries. This is called the debt service suspension initiative.