World Bank Releases $1.9bn To Developing Countries In Bid To Fight Coronavirus

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Sunday, April 05, 2020/    7:30AM/ By Sarah Newey, The Telegraph, London/  Image Header Credit: Ezra Acayan/Getty Images

 


An odd lot of emerging and frontier economies have benefited from the US$1.9bn funding bucket raised by the World Bank to combat the raging COVID-19 virus across the globe. Countries that rose fastest to the challenges of the virus included surprise nations such as Afghanistan (to receive US$100.4m), Pakistan (US$200m), Sri Lanka (US$128.6m) and India (US$1bn). The Telegraph of London in an insightful article below show how small and mid-sized economies have risen to the challenge of the coronavirus pandemic:

 

A homeless child and her mother wearing facemasks rest inside a gymnasium converted into a shelter for the homeless in southeast Asia.



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The World Bank has unveiled how $1.9 billion of emergency funds will be spent fighting the coronavirus pandemic in 25 developing countries.


The money will help them respond to the immediate health challenges posed by the pandemic, mostly by supporting critical infrastructure.


The bank warned the money must not be spent on debt interest and asked richer nations to suspend the debit interest payments of poor nations during the crisis.



A Slew of New Funding


Axel van Trotsenburg, managing director of operations at the World Bank, told The Telegraph that the funding would come without strings attached. 


"This money is meant for one purpose and one purpose only, to save lives," he said. "And we will not stop until all countries who would like support have it."


Included in today's package is $47 million to put in place containment strategies, train medical staff and provide equipment in the Democratic Republic of Congo. 


And in India, $1 billion will be used to produce personal protective equipment, set up new isolation wards and support better screening, contact tracing and laboratory diagnostics. 


Mr. van Trotsenburg said the 25 countries included in the first batch of funding, which also includes Afghanistan, Haiti and Ethiopia, were the first to respond to the offer of help. 


Last week the financial institution announced that it would increase its Covid-19 response fund to $14 billion in total.


"There was not [a process of prioritization]," he said. "These were the countries with whom we could move the fastest and we didn't want to wait further."


But he added that another batch of proposals to help at least two dozen more nations would be fast-tracked and presented to the board within the next fortnight. The bank says it is prepared to deploy up to $160 billion over the next 15 months to help countries to the health and economic challenges presented by the current coronavirus crisis. 


"I've been over 30 years in the bank and I have never seen that we have been able to prepare 25 packages in less than two weeks from initiation, negotiation to board presentation," he said. 



Chart 1 Breakdown of US$1.9bn World Bank Emergency COVID-19 Funding


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Source: World Bank, The Telegraph



The coronavirus pandemic has now spread to more than 200 countries across the globe, with the world closing in on the grim milestones of one million infections and 50,000 infections. 



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A Growing Outbreak


As the outbreak has grown and overwhelmed even developed countries, concern has skyrocketed about the possible ramifications of a hotspot in nations with weaker health systems with fewer resources. 


Bill Gates warned last month that the coronavirus could kill 10 million people in Africa if the outbreak was left to let rip, while modelling from Imperial College London estimates that there would be nearly 40 million deaths worldwide if governments fail to act. 


But while wealthy governments including the UK and US have made enormous budgetary commitments to help support the health system and the economy, much of the world does not have such resources. 


Mr. van Trotsenburg urged developed nations to suspend or write off bilateral debt payments during the pandemic to ensure the money provided by the World Bank was used to tackle the coronavirus. 

"We are calling for debt relief from official bilateral agreements to alleviate the temporary burden on the poorest countries," he said. 


"What we would like to make sure is that the large amount that the World Bank wants to put into these countries is used for fighting the coronavirus and for recovery, and is not destined to paying off the debts of others."



In Praise of Globalisation


The managing director of operations added that "sweeping statements" blaming globalisation for the scale of the pandemic were unhelpful.


"When a pandemic of this sort strikes, it's a stark reminder that we are connected," Mr. van Trotsenburg said. "But, in my mind, one of the more encouraging sides about this is how the multilateral and international community has got together… [with] laser sharp focus.


"It is thanks to globalisation that our response has been able to move very, very rapidly. If that hadn't existed, we would not have been able to provide these support packages within two weeks."



Editor's Note: This article first appeared in The Telegraph of London on Thursday April 02, 2020

 

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