The World Bank said it transfered about $17bn to Least Developed Countries between April and December 2020 to enable them tackle the negative impact of the Covid-19 pandemic.
President of the World Bank Group, David Malpass who disclosed this at the G20 Finance Ministers and Central Bank Governors Meeting said of the amount, $5.8bn were on grant terms.
The World Bank President said, “Our new commitments were almost $30bn, making IDA19 the single largest source of concessional resources for the poorest countries and the key multilateral platform for support.
“Relief efforts are providing some welcome fiscal space, but IDA countries need major new resources too, including grants and highly concessional resources.”
Malpass explained that for the countries to recover from Covid-19, much more was needed, adding that the Bank welcomed G20’s support for advancing IDA20 by one year.
“You know many of the arguments for IDA resources, so I would like to conclude with a word on balance sheet optimization. In IDA18, we implemented a major optimization by transforming IDA into a AAA market participant and adopting a hybrid financing model. In IDA19, $1 in donor contribution led to $3.50 in IDA financing, nearly double that just half a decade earlier.
“We will seek ways to further optimize our balance sheet while protecting IDA’s AAA rating. At the same time, strong donor contributions are necessary to maintain concessionality.
“That’s the key point I’d like to leave you with – strong donor contributions are necessary to maintain concessionality to support the poorest countries.
“In previous interventions, I’ve provided details on the World Bank Group’s actions in helping countries respond to the COVID-19 pandemic.”
In 2020, he said the Bank achieved a record 65 per cent growth in commitments; and a rapid doubling of its trade and working capital finance to help fill the banking vacuum that hit private sectors.
He said during the 2020 fiscal period, Bank-wide commitments topped $100bn for the first time, and adding that it expect new vaccination operations in 50 countries by mid-year.
He added, “COVID-19 will leave lasting scars on developing countries, from closed schools and physical stunting of children to lost jobs, the depletion of savings and assets, and growing debt overhangs.
“The crisis came on top of persistent development challenges, including stagnant median incomes, fragility and violence, and damage caused by climate change.
“In this context, I welcome the G20’s work on supporting the most vulnerable countries and commend the Italian Presidency for prioritizing people and the planet. I’ll focus today on climate, debt, and resource needs.”
On debt, the World Bank President said it welcomed a decision by the G20 to extend the DSSI through 2021, adding that the Bank is also working closely with the IMF to support the implementation of the G20 Common Framework.