| World Bank IMF and Dev Agencies |    1085 VIEWS  |
| World Bank IMF and Dev Agencies | |
| 1085 VIEWS | |
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Friday,
April 10, 2020 / 08:16 PM / By Cfi.co / Header
Image Credit: Mercy Corps
World Bank President David Malpass has joined IMF Managing
Director Kristalina Georgieva in urging bilateral creditors to extend debt
relief to poor countries struggling to cope with the coronavirus. "Many
countries will need debt relief. This is the only way they can concentrate any
new resources on fighting the pandemic and its economic and social
consequences," said Mr Malpass during a meeting of the IMF's International
Monetary and Financial Committee. Mrs Georgieva warned that many low-income
countries already suffer a high debt load and depend on official creditors for
funds to fight the pandemic.
The World Bank is putting the
finishing touches on an aid package worth some $160 billion in emergency
funding over the next 15 months. In a statement issued after a virtual meeting
of G20 leader in late March, Mr Malpass explained that the World Bank seeks to
shorten the time to recovery and "create conditions for growth, support small-
and medium-sized enterprises, and help protect the poor and vulnerable." He
also emphasised that the bank works tirelessly to strengthen the ability of
developing nations to respond to the pandemic.
According to Mr
Malpass, the World Bank now has pandemic-related projects underway in 56
countries. Additionally, the bank is restructuring existing projects in 24
countries to free up funds for public healthcare. Mr Malpass said that he is
particularly concerned about 'poor and densely populated' countries such as
India that need massive investments to scale up healthcare and related sectors.
The bank's teams
are currently finalising some $2.8 billion in emergency disbursements under the
$14 billion Fast Track Facility which includes a mix of grants, credits, and
loans. A new framework has also been proposed to streamline and expedite the
processing of requests and tailor operations to the specific epidemic status of
each country.
The International
Finance Corporation (IFC), the private sector arm of the World Bank Group, has
freed up an initial tranche of $8 billion to help companies preserve jobs and
weather the economic downturn. The corporation has mobilised its resources to offer
immediate support to about 300 businesses across emerging markets that had
already been approved for financing. The IFC has also provided $545 million in
facilities through its Global Trade Finance Program. The bulk of this credit
went to low-income and fragile countries in Sub-Saharan Africa and the MENA
region.
In order to draw in
private investors, the IFC has boosted the resources available to the
Multilateral Investment Guarantee Agency (MIGA), also part of the World Bank
Group, by $6 billion. MIGA provides political risk insurance to private sector
lenders and investors.
Though the World
Bank's $160 billion package seems modest when compared to the trillions of
dollars and euros being hastily disbursed in the United States and throughout
Europe, the bank usually manages to leverage its operations by engaging with
private creditors. Once the World Bank has given a project its stamp of
approval, private sources of funding often open up and follow through.
World Bank
President Malpass has taken the lead in promoting the coordination of relief
efforts by multilateral lenders. He has hosted a number of conference calls
with the heads of regional development banks such as the European Investment
Bank, Inter-American Development Bank, and others to seek co-financing for
current and future World Bank operations. Mr Malpass also reiterated the
importance of cementing common procurement and logistics programmes and
involving the private sector in all initiatives. Mr Malpass said that he
received a 'very positive' response from multilateral lenders to work on a
comprehensive debt relief initiative for low-income countries.
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