World Bank Group financial commitments since July 2008, just before the full fury of the financial crisis hit, reached US$ 100 billion today as the institution helped countries respond to and recover from the global downturn.
World Bank Group financial commitments since July 2008, just before the full fury of the financial crisis hit, reached US$ 100 billion today as the institution helped countries respond to and recover from the global downturn. This support is an all-time high for the global development Bank and includes safety nets for the poor, infrastructure to create jobs and build a foundation for recovery, agriculture to support small farmers, and microfinance to help small and micro enterprises.
After the worst crisis in 50 years, the world economy faces an uncertain and uneven recovery with new risks to jobs and growth. The World Bank Group is playing a historically large role in protecting the poor and laying the foundation of recovery.
The speed and scale of the Bank’s response since July 2008 is unprecedented. World Bank (IBRD and IDA) lending to health and social services increased significantly from $1.6 billion in FY08 to $6.3 billion in FY 09 and to $5.1 billion in just the first nine months of FY 10. Bank commitments supporting social safety net programs for the poorest and most vulnerable citizens in the poorest countries increased exponentially from $253m in FY08 to $3.1 billion in FY09 and to $2.1 billion to date in FY10.
“I'm very pleased the World Bank Group has stepped up and delivered during the economic crisis. Our developing country partners know that we will assist them in their development needs,” said World Bank Group President Robert B. Zoellick. “As the multi-speed recovery takes shape around the world, countries will face recurring and new challenges, and the World Bank will continue to provide support to overcome poverty and foster sustainable growth.”
Since July 2008, the World Bank supported 497 projects to promote economic growth, fight poverty, and assist private businesses, including $28 billion in infrastructure financing, a critical sector to provide the foundation for rapid recovery from the crisis, job creation and future productivity and growth. As expected, Bank commitments to the financial sector also increased greatly compared to FY08 commitments, accounting for 15% of total commitments since FY09 (through April 6, 2010).
The International Bank for Reconstruction and Development (IBRD)—which provides financing, risk management products and other financial services to countries— was able to respond with strength and speed when the crisis first hit and when its clients needed it most. IBRD played a key role in contributing to opportunities to boost global growth and economic recovery in several countries. It delivered a record $33 billion in new commitments in FY 09, almost tripling the previous year’s level and has so far delivered another record $27.4 billion, with three months to go in this fiscal year. Total IBRD lending, which includes its response to the crisis, is projected to reach $136 billion for the FY09-12 period, putting IBRD on track to deliver on commitments it made to the G 20 in Spring 2009.
Assistance from the International Development Association (IDA) – which provides grants and interest-free, long-term loans called credits to governments of the world’s 79 poorest countries, which have little or no capacity to borrow on market terms – has reached $21.2 billion since July 2008.
Commitments from the International Finance Corporation (IFC) – the private sector arm of the World Bank Group which provides long-term loans, equity, structured and securitized products, and advisory and risk mitigation services to private enterprises in developing and transition countries – total $16.6 billion since FY09. To address key vulnerabilities in the global economy, IFC launched special vehicles for trade finance, microfinance, bank capitalization, infrastructure and distressed debt.
The Multilateral Investment Guarantee Agency (MIGA) has committed over $2 billion in providing political risk insurance or guarantees to promote foreign direct investment in developing countries.