World Bank Group President David Malpass has announced that there is big proposal to rescue low income countries affiliated to International Development Association (IDA) from the devastating effect of COVID-19 pandemic.
“I expect to discuss with our board a new 15-month crisis response envelope of around $170 billion to cover April 2022 through June 2023 for member countries.
“We expect to commit around $50 billion of this amount in the next three months”, Mr Malpass said in his opening remarks at the Spring Meetings 2022 Roundtable.
According to him, “This is a continued, massive crisis response given the continuation of the crisis. Helping this effort was the front-loading of IDA19. IDA has been a key part of what has been a record scale-up. We’ll be starting IDA20 on July 1, making $93 billion available to IDA countries, the poorest”, he said.
He bemoaned that the Spring Meetings began with countries facing severe overlapping crises including COVID-19, inflation, and Russia’s invasion of Ukraine.
“I’m deeply concerned about developing countries. They’re facing sudden price increases for energy, fertiliser, and food, and the likelihood of interest rate increases. Each one hits them hard.
“These, plus the war in Ukraine and China’s COVID-related shutdowns, are pushing global growth rates even lower and poverty rates higher.
“We’ve lowered our 2022 growth rate to 3.2% from 4.1% before. People are facing reversals in development for education, health, and gender equality. They’re facing reduced commercial activity and trade. Also, the debt crises and currency depreciations have a burden that falls heavily on the poor”, the World Bank Group President noted.
Package for Ukraine
Mr. Malpass indicated that the World Bank has mobilised nearly $1 billion in emergency financing for Ukraine and announced another $1.5 billion to support essential government services.
“I want to spend a few minutes on the issue of food insecurity. I was recently at the World Water Forum in Senegal, and then I visited Morocco. Both countries are being affected by the price spike in the energy and fertiliser that are used to make food. This is an intense problem.
“Food crises are bad for everyone, but they’re devastating for the poorest and most vulnerable. There are two reasons. First, the world’s poorest countries tend to be food-importing countries. Second, food accounts for, at least, half of total expenditures in household budgets in low-income countries, so it hits them hardest.
“I joined Kristalina Georgieva, IMF Managing Director; Ngozi Okonjo-Iweala, WTO Director-General; and David Beasley, World Food Program Executive Director in a joint statement last week on food insecurity. We wanted to highlight the issue and help coordination. Countries must be taking action now to encourage the production of food, energy, and fertiliser. The production chain needs all three. It’s vital for countries, both advanced and developing, to reduce their trade barriers”, Mr. Malpass told the meeting.
Global trade
According to Mr. Malpass, global trade is still facing quotas, high import tariffs, high export tariffs, expensive food price subsidies, and even export bans on food products.
The international community, he stressed, needs to immediately step up emergency assistance for food insecurity and help bolster social safety nets.
“From the World Bank’s standpoint, we are providing roughly $17 billion per year to strengthen food security – a big part of the global effort,” he added.
