The World Bank's International Development Association (IDA) is providing $93 billion in fresh funding to help low-income countries respond to the Covid-19 pandemic.
The financing package is the largest mobilised in IDA’s 61-year history and the funds will be delivered to the world’s 74 poorest countries, where the pandemic has increased poverty, undermined growth and development, the Washington-based lender said. The IDA is providing the funds under its 20th replenishment (IDA20) programme.
The financing brings together $23.5bn of contributions from 48 high and middle-income countries, with financing raised in the capital markets, repayments and the World Bank’s own contributions, the Washington-based lender said.
“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,” said World Bank Group President David Malpass. “We are grateful for the confidence our partners have in IDA as a non-fragmented and efficient platform to tackle development challenges and improve the lives of millions of people around the world.”
The global health crisis plunged the world economy last year into its deepest recession since the 1930s. While developed economies have recovered faster and have more upside because of their accelerated vaccine and booster programmes, poorer and developing economies have not rebounded at the same pace, with some struggling.
The pandemic has led to rising public and household debt, falling government revenues, and increased risks to fragility, conflict, and instability; and declining literacy rates. About a third of IDA countries are facing a looming food crisis.
"With the Covid-19 pandemic, the world is facing one of the biggest crises of our time ... at the same time, the effects of climate change present additional challenges across countries," Mr Malpass said.
"IDA countries are lagging in Covid-19 vaccinations and economic recovery. We have seen that the recovery has been dramatically uneven, with per capita income in advanced economies growing at 5 per cent compared to only 0.5 per cent in low-income countries. Two thirds of the world’s poor – almost 510 million people – live in countries served by IDA."
The IDA20 programme focuses on governance and institutions, debt sustainability, and digital infrastructure that can help foster economic and social inclusion. The additional funding will enhance the IDA's capacity to address health challenges faced by 400 million. Its social safety nets programme is also expected to reach as many as 375 million people.
Funding will also address climate change and help countries build back greener, be better prepared for future pandemics, financial shocks and natural hazards.
IDA has provided $458bn to 114 countries since 1960. Annual commitments have averaged about $29bn over the past three years, with about 70 per cent going to Africa. The IDA20 programme will cover the period of July 1, 2022, to June 30, 2025.