The World Bank has announced a US$93 billion support from the International Development Association (IDA) of the bank to poor countries to boost their covid-19 recovery and accelerate developments in those economies.
According to the bank, the US$93 billion package includes US$23.5 billion in contributions from 48 high- and middle-income nations, as well as capital market funding and the World Bank’s own commitments.
The Bank added that the financing package, which was agreed upon over a two-day virtual meeting hosted by Japan, is the largest ever deployed in IDA’s 61-year history.
World Bank’s President, David Malpass, lauded the kind intervention of the donors and highlighted how these monies will help those 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.
“We are grateful for the confidence our partners have in IDA as a non-fragmented and efficient platform to tackle development challenges and improve lives of millions of people around the world.”David Malpass
President Malpass also revealed that poor countries are falling short in their battle against the covid-19 pandemic, which is why this gesture is so important.
“We have seen that the recovery has been dramatically uneven, with per capita income in advanced economies growing at 5 percent compared to 0.5 percent in low-income countries”David Malpass
The monies will be distributed to the world’s 74 poorest countries through the International Development Association’s 20th replenishment (IDA20) initiative, which focuses on assisting countries in recovering from the effects of the Covid-19 crisis.
Per the World Bank, the ongoing pandemic is worsening poverty, undermining growth, and jeopardizing the prospects for resilient and inclusive development in these countries. These countries are also grappling with failing government revenues, rising debt vulnerabilities, rising risks of fragility, instability, and falling literacy rates.
The Bank also noted that an appreciable amount of this donor support will go into tackling climate change, with a focus on helping countries to adapt to rising climate impacts and preserve biodiversity, the multilateral lender added.
The International Development Association (IDA) of the World Bank, founded in 1960, assists the world’s poorest countries by providing grants and low-interest loans for projects and programs that enhance their economic growth, decrease poverty, and improve people’s lives.
According to the multilateral lender, the IDA’s 19th funding cycle began in July 2020, with a record replenishment of $82 billion expected to finance projects over a three-year period ending June 30, 2023. And as a result of the increased pandemic response, the replenishment was pushed back a year after.
Furthermore, IDA20 will assist countries in better preparing for future emergencies, including pandemics, fiscal shocks, and natural disasters. While IDA20 will help countries all over the world, the majority of the funds will go to Africa, which will receive almost 70% of the total amount.
The IDA20 will include more ambitious policy pledges to assist countries in prioritizing investments in human capital, including education, health and nutrition, vaccines, social safety nets, and disability support.