WB announces US$93bn to boost recovery in world's poorest countries
The World Bank (WB) has announced a
US$93 billion replenishment package of the International Development
Association (IDA) to help low-income countries respond to the COVID-19 crisis
and build a greener, more resilient, and inclusive future.
The financing brings together $23.5
billion of contributions from 48 high-and middle-income countries with
financing raised in the capital markets, repayments, and the World Bank's own
contributions, said a press release yesterday.
The financing package, agreed over a
two-day meeting hosted virtually by Japan, is the largest ever mobilized in
IDA's 61-year history. IDA's unique leveraging model enables it to achieve
greater value from donor resources -every $1 that donors contribute to IDA is
now leveraged into almost $4 of financial support for the poorest countries.
"Today's generous commitment by
our partners is a critical step toward supporting poor countries in their
efforts to recover from the COVID-19 crisis," said World Bank Group
President David Malpass.
"We are grateful for the
confidence our partners have in IDA as a non-fragmented and efficient platform
to tackle development challenges and improve the lives of millions of people
around the world," he added.
The funds will be delivered to the
world's 74 poorest countries under the 20th replenishment (IDA20) program,
which focuses on helping countries recover from the impacts of the COVID-19
crisis.
In these countries, the ongoing
pandemic is worsening poverty, undermining growth, and jeopardizing the
prospects of a resilient and inclusive development.
Countries are struggling with
falling government revenues; increasing debt vulnerabilities; rising risks to
fragility, conflict, and instability; and dropping literacy rates. About a
third of IDA countries are facing a looming food crisis.
To help countries build back
greener, a substantial portion of these funds go to tackling climate change,
with a focus on helping countries to adapt to rising climate impacts and
preserve biodiversity.
IDA will also deepen support to
countries to better prepare for future crises, including pandemics, financial
shocks, and natural hazards. While DA20 will support countries globally,
resources are increasingly benefiting Africa, which will receive about 70
percent of the funding.
With this strong package, IDA will
be able to scale up its support in the pandemic and address health challenges,
helping 400 million people receive essential health and nutrition resources.
The social safety nets program is also expected to reach as many as 375 million
people.
The IDA20 program has more ambitious
policy commitments that will support countries in prioritizing investments in
human capital, covering issues such as education, health and nutrition,
vaccines, safety nets, and support for people with disabilities.
IDA will also increase its ambition
in addressing other major development challenges such as gender inequality, job
creation, and situations of fragility, conflict and violence, including in the
Sahel, the Lake Chad region, and the Horn of Africa. A continued emphasis on
governance and institutions, debt sustainability, and digital infrastructure
interventions will help foster economic and social inclusion.
Due to the urgent development needs
of IDA countries, the replenishment was dvanced by one year. IDA20 will cover
the period of July 1, 2022, to June 30, 2025. The IDA20 policy architecture
builds on the strong foundation of IDA19, with enhancements to make IDA20 even
more ambitious and fit for today's challenges.
IDA19 achievements key to IDA20
include: strong COVID-19 response with nearly 70 countries benefiting from IDA
financing for vaccines, health professionals' training, and hospital equipment.
Over 60 percent of climate
financing, in fiscal year 2021 alone, focused on adaptation and resilience; IDA
helped 62 countries institutionalize disaster risk reduction plans.
Greater debt transparency through
the Sustainable Development Finance Policy introduced in IDA19, with 19
countries publishing annual and timely debt reports in fiscal year 2021. Source:
BSS