April 3, 2020 end of week update: Forward progress

The World Bank Group is working to strengthen developing nations’ ability to respond to the COVID-19 pandemic and shorten the time to economic and social recovery. The poorest and most vulnerable countries will likely be hit the hardest, and our teams around the world remain focused on country-level and regional solutions to address the ongoing crisis.

Below is my summary of some of our activities over the last week:

• We're continuing to take broad, fast action to support countries to slow or stop the spread of COVID-19, with health operations already moving forward in over 65 countries.

• Beyond the health impacts from the COVID-19 pandemic, we are expecting a major global recession. The World Bank Group, including IFC and MIGA, is prepared to deploy up to $160 billion over the next 15 months to support COVID-19 measures that will help countries respond to immediate health consequences of the pandemic and bolster economic recovery and growth. The broader economic program will aim to shorten the time to recovery, create conditions for growth, support small and medium enterprises, and help protect the poor and vulnerable.

• We intend to respond forcefully and massively with support programs, especially for poor countries, involving a significant increase in the provision of our highly concessional IDA credits and grants. In frontloading significant volumes of financing during the time of crisis, we will be able to ensure large transfers to IDA countries.

• On Thursday, the World Bank’s Board of Executive Directors approved the first set of emergency support operations, assisting 25 countries and using a dedicated, fast-track COVID-19 facility.

 

 

• With the legal teams and country offices working nearly 24/7, by Friday, 11 agreements had been signed and 3 had already been declared effective. These numbers will climb to over 60 in coming days, creating the breadth of response we think is vital to an effective response. The new framework makes fast expansion possible through co-financing with bilateral and multilateral donors. 

• Since the fast-track facility was approved on March 17, IFC has committed to 470 transactions in the amount of $545 million in trade finance lines, 54% of which were in low-income and fragile countries and 29% in Sub-Saharan Africa and MENA.

• The World Bank has been working with COVID-related suppliers to share aggregate demand estimates and has developed a streamlined procedure to support countries’ procurement of medical supplies and equipment.

 

• On Thursday, I called Rwandan President Kagame to discuss the health and economic impact of COVID-19 in Rwanda and Sub-Saharan Africa and how the WBG can support.

• I will soon be speaking with Ethiopian Prime Minister Abiy Ahmed, Kenyan President Kenyatta, and other world leaders to discuss how the World Bank Group can help countries’ efforts to fight the pandemic.

 

• On Tuesday, during a video conference with G20 Finance Ministers and Central Bank Governors, I reiterated my call for creditor countries to allow the poorest countries to suspend all repayments of official bilateral credit. A standstill could begin on May 1 and would add critical new liquidity to the large World Bank and IMF support programs as countries fight the COVID-19 pandemic.

• During the suspension period, the World Bank and IMF could be tasked with consultations and outreach with creditors, borrowing countries, and civil society organizations to evaluate the poorest countries’ debt sustainability outlook, including possibly a reduction in the creditor’s net present value and participation by commercial creditors.
   
• Kristalina and I are seeking endorsement for the IDA debt relief proposal at the Development Committee meeting of Governors during our virtual Spring Meetings on April 17.

• For some important weekend reading, our new Vice President for Sustainable Development, Juergen Voegele, writes about the potential for food supply disruptions, and another World Bank team writes about why remittances and adoption of digital financial services should be a priority in the wake of COVID-19.

I want to express my appreciation for colleagues across the Bank Group for working tirelessly on operations to fight COVID-19, particularly as we are having to conduct all of our discussions with Government counterparts and implementing partners virtually. It is imperative that we act quickly and decisively to reduce the pandemic’s spread and strengthen countries’ ability to respond. 

Originally published on LinkedIn.

RELATED

The World Bank Group and COVID-19