The World Bank Group (WB) expects to deploy up to $160 billion over 15 months through June 2021 to support countries’ responses to COVID-19 through a series of new operations, the restructuring of existing ones, the triggering of catastrophe draw down options, and support for sustainable private sector solutions that promote restructuring and recovery.
The pandemic could push about 100 million more people into extreme poverty in 2020. Countries impacted by FCV challenges are particularly vulnerable to the health, social, and economic impacts of the pandemic.
The poorest and most vulnerable countries also face food insecurity, as supply chain disruptions and export restrictions threaten the food supply.
Engaging with the private sector is critical to the emergency response, and IFC expects to provide $47 billion in financial support through June 2021 as its part of the Bank Group’s response. In its initial package, IFC is providing $8 billion to help companies continue operating and sustain jobs during the crisis.
This package will support existing clients in vulnerable industries, including infrastructure, manufacturing, agriculture, and services, and provide liquidity to financial institutions so they can provide trade financing to companies that import and export goods and extend credit to help businesses shore up their working capital. WB also cautioned governments against protectionist measures, which can reduce global supply, lead to higher prices, and prevent developing countries from getting the supplies they need.
The Bank, along with the International Monetary Fund (IMF), called for the suspension of bilateral debt payments from IDA countries to ensure that countries have the liquidity needed to grapple with the challenges posed by the outbreak and allow for an assessment of their financing needs.
On April 15, leaders of the G20 nations heeded this call and issued a debt relief agreement suspending bilateral debt service payments by poor countries beginning May 1. In remarks to the Development Committee at the virtual Spring Meetings of the Bank Group and IMF, President David Malpass commended this historic achievement: “Debt relief is a powerful, fast-acting measure that can bring real benefits to the people in poor countries.”
