The COVID-19 crisis has been a sudden, high-speed reverse gear – quickly eroding gains in economic growth and poverty reduction across the world.These are countries where children, women, people living in fragile and conflict-affected situations, and those employed in the informal sector are suffering the most.
Amid these unprecedented and disheartening times, I joined as Director of the incredible IDA Resource Mobilization and IBRD Corporate Finance team, which has stepped up to the plate in the COVID-19 fight. The team is contributing to the World Bank’s delivery of an exceptional response to help countries deal with the demands and effects of the crisis. I am excited to be part of it.
IDA’s support is part of the broader $150-160 billion World Bank Group response over a 15-month period and includes $50-55 billion in low-interest credits and grants focused on saving lives, protecting the poor and vulnerable, creating jobs, saving businesses, and building a more resilient recovery.
July 2020 is the kick-off of IDA’s 19th funding cycle (better known as IDA19).
The 500 million people living in extreme poverty in IDA countries remain at the center of IDA action, whose work and impact aims to make the world a better place for everyone. IDA is uniquely positioned for this mission, so let me share with you five transformative elements to look forward to in IDA19:
1. Sharply focusing on crisis preparedness and earlier response to slower-onset crises.
Prime focus will be stronger resilience building including pandemic preparedness and reducing risks from climate shocks. The COVID-19 pandemic reminds us of the importance of strengthening resilience against any shocks that might strike. That is what IDA19 will proactively do.
2. Implementing a new debt policy.
Many IDA countries were already at high risk of debt distress before COVID-19 which is exacerbating the situation. A new debt policy in IDA19 called Sustainable Development Finance Policy will help incentivize countries to borrow sustainably and promote coordination between IDA and other creditors.
3. Creating more and better jobs.
Jobs are a critical element of poverty reduction. In many IDA countries jobs are scarce and COVID-19 has exacerbated this situation. The jobs agenda will include facilitating job-creating private investments and much needed infrastructure. Digital technology will also be important in the jobs’ agenda. IDA’s Private Sector Window will scale up and mobilize private sector investments in IDA countries with support from IFC and MIGA. And IDA19 will ensure there is the human capital with appropriate skills, health, etc.
4. Increasing tailored support in fragile and conflict-affected situations.
This will help to address a range of risks related to fragility, conflict, and violence (FCV), with strong incentives and accountabilities for countries to confront FCV drivers. The Bank’s FCV Strategy will strengthen operations in this regard, and IDA19 will also do more to address regional drivers of fragility through regional programs, including in the Sahel, Lake Chad region, and the Horn of Africa.
5. Thinking regionally.
Scaled up support for regional integration, such as investments in infrastructure for greater regional connectivity, trade facilitation, and digital economy. Thinking regionally will help facilitate collective action to address common goals.
Even though the environment might be challenging, we optimistically move on knowing that the agenda we have to deliver is for important clients – all the poor people in IDA countries who look forward to a better world.I am excited by this prospect.