World Bank President David Malpass criticized Microsoft’s $69 billion acquisition of Activision Blizzard, saying it represented a questionable investment decision, at a time when poor countries were struggling to restructure their debts, combat the “Covid-19” pandemic and reduce from poverty.
Malpass said at a virtual conference organized by the Peterson Institute for International Economics on Wednesday that more capital should be directed to poor countries, and that these flows were disrupted by unusually loose monetary policies in developed countries.
He added that the size of Microsoft’s acquisition of Activision Blizzard, producer of the “Call of Duty” game, astonished him, as it dwarfed the $23.5 billion in cash contributions agreed upon in December by the rich donor countries to the International Development Association, the arm of the World Bank to help the most severe The world’s poorest countries, equivalent to about $8 billion annually over 3 years.
Of the Microsoft deal, Malpass added, “You’ve got to wonder, wait a minute, is this the best capital allocation?… It’s going to the bond market. you know what! Huge capital inflows go to the bond market.
He added that a very small segment of the developing world is able to obtain financing from the bond market of this size, while huge capital remains stuck in developed countries, especially in the assets of central banks’ reserves that are used to support purchases of long-term bonds, pointing out that in order to address Refugee flows, malnutrition and other current crises, more money and growth opportunities must be made available to developing countries.