Bernie Sanders, Ilhan Omar Lead Call for World Bank, IMF Debt Cancellation

(Bloomberg) -- Senator Bernie Sanders and Representative Ilhan Omar led a group of lawmakers from two dozen countries calling for the International Monetary Fund and World Bank to forgive the debt of the world’s poorest countries and step up their support.

The debt payment standstill announced last month by the Group of 20 won’t be enough to allow the countries to deal with the crisis, the lawmakers, including the U.K.’s Jeremy Corbyn, said in a letter Wednesday. Fitch Ratings last month warned that multilateral development banks could see their credit ratings suffer if they let the poorest nations suspend sovereign debt payments.

The lawmakers also urged the IMF to create trillions of dollars in reserve assets, called special drawing rights, a move opposed by the Trump administration. IMF Managing Director Kristalina Georgieva said last month that the fund is well capitalized for the next months but won’t discard the possibility of creating more reserve assets if it needs more resources in the future.

The steps are “the very least that these financial institutions should do to prevent an unimaginable increase in poverty, hunger, and disease that threatens hundreds of millions of people,” Sanders said in a statement.

The lawmakers called on the IMF and World Bank to respond in 15 days.

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