World Bank Group increases COVID-19 response to help sustain Caribbean economies, protect jobs
WASHINGTON, Mar 18, CMC – The World Bank has approved an increased US$14 billion package of fast-track financing to assist Caribbean and other countries as well as companies in their efforts to prevent, detect and respond to the rapid spread of COVID-19.
The International Financial Corporation’s (IFC) is the largest global development institution within the World Bank focused on the private sector in developing countries.
The Washington-based financial institution said the package will strengthen national systems for public health preparedness, including for disease containment, diagnosis, and treatment and support the private sector.
It said the IFC will increase its COVID-19 related financing availability to eight billion US dollars as part of the US$14 billion package, up from an earlier six billion US dollars, to support private companies and their employees hurt by the economic downturn caused by the spread of COVID-19.
The bulk of the IFC financing will go to client financial institutions to enable them to continue to offer trade financing, working-capital support and medium-term financing to private companies struggling with disruptions in supply chains, the World Bank said.
It said IFC’s response will also help existing clients in economic sectors directly affected by the pandemic, such as tourism and manufacturing, “to continue to pay their bills.”
The package will also benefit sectors involved in responding to the pandemic, including healthcare and related industries, which face increased demand for services, medical equipment and pharmaceuticals.
“It’s essential that we shorten the time to recovery. This package provides urgent support to businesses and their workers to reduce the financial and economic impact of the spread of COVID-19,” said David Malpass, president of the World Bank Group.
“The World Bank Group is committed to a fast, flexible response based on the needs of developing countries. Support operations are already underway, and the expanded funding tools approved today will help sustain economies, companies and jobs.”
The additional two billion US dollars builds on the announcement of the original response package on March 3, which included six billion US dollars in financing by the World Bank to strengthen health systems and disease surveillance and six billion US dollars by IFC to help provide a lifeline for micro, small and medium sized enterprises, which are more vulnerable to economic shocks.
“Not only is this pandemic costing lives, but its impact on economies and living standards will likely outlive the health emergency phase. By ensuring our clients sustain their operations during this time, we hope the private sector in the developing world will be better equipped to help economies recover more quickly,” said Philippe Le Houérou, IFC’s chief executive officer.
“In turn, this will help vulnerable groups to more quickly recover their livelihoods and continue to invest in the future.”
Having mobilized quickly at the time of the 2008 global financial crisis and the Western African Ebola virus epidemic, the World Bank said IFC has a successful track record of implementing response initiatives to address global and regional crises hampering private-sector activity and economic growth in developing countries.
The World Bank said the IFC response will support existing clients in the infrastructure, manufacturing, agriculture and services industries vulnerable to the pandemic as well as cover the payment risks of financial institutions, so they can provide trade financing to companies that import and export goods.