World Bank: Coronavirus crisis could push over 60 million people into extreme poverty
The World Bank Group has again raised an alarm that the growing impact of the coronavirus pandemic on the global economy and shutdown of many advanced economies could push as many as 60 million people into extreme poverty.
The World Bank Group President, David Malpass, said the situation erases much of the recent progress recorded in poverty alleviation around the world.
He said these prospects were what compelled the World Bank Group to move swiftly and decisively to establish emergency response mechanisms that allow donor groups and organisations to rapidly expand help programmes in 100 countries, home to 70 per cent of the world’s population.
To return to the path of global economic growth, Mr Malpass said the group’s goal must be rapid and flexible to tackle the health emergency.
He said the objective must also be to provide cash and other expandable support to protect the poor, maintain the private sector, and strengthen economic resilience and recovery.
Since March, the World Bank said, it delivered record levels of support to help countries protect the poor and vulnerable, reinforce health systems, maintain the private sector and bolster economic recovery.
“This assistance, the largest and fastest crisis response in the Bank Group’s history marks a milestone in implementing the Bank Group’s pledge to make available $160 billion in grants and financial support over a 15-month period to help developing countries respond to the health, social and economic impacts of COVID-19 and the economic shutdown in advanced countries,” it said on Tuesday.
Of the 100 countries, 39 are in Sub-Saharan Africa, with nearly one-third of the total projects located in fragile and conflict-affected situations, such as Afghanistan, Chad, Haiti, and Niger.
The group said the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA) have also fast-tracked support to businesses in developing countries, including trade finance and working capital to maintain private sectors, jobs and livelihoods.
Mr Malpass said the group’s support through grants, loans and equity investments would be supplemented by the suspension of bilateral debt service, as endorsed by the bank’s governors.
The eligible countries for International Development Agencies (IDA) that request a forbearance on their official bilateral debt payments, the World Bank President said, would have more financial resources to respond to the COVID-19 pandemic and fund critical, life-saving emergency responses.
“The bilateral debt-service suspension being offered will free up crucial resources for IDA countries to fund emergency responses to COVID-19,” Mr Malpass said.
“Nations should move quickly to substantially increase the transparency of all their governments’ financial commitments. This will increase the confidence in the investment climate and encourage more beneficial debt and investment in the future.”
The group’s operations in 100 countries aim to save lives, protect livelihoods, build resilience, and boost recovery by strengthening health systems, monitoring and prevention, particularly in low-income countries and in fragile and conflict-affected situations.
The health response programmes address emergency containment and mitigation needs for COVID-19, including strengthening countries’ health systems to treat severe cases and save lives.
The group also establishes and supports efforts in fragile and conflict-affected situations as a priority, given the rapidly growing number of cases in some of these countries.
The World Bank President said disbursement of financial supports are already ongoing to Senegal ($20 million) and Ghana ($35 million) including funding to strengthen disease surveillance systems, public health laboratories, and epidemiological capacity for early detection.
Again, the bank is also leveraging countries’ existing social protection systems to help families and businesses restore income, preserve livelihoods, and compensate for increasing prices and unexpected medical expenses.
These safety nets are needed to augment with safe, direct food distribution, accompanied by key information on nutrition, social distancing, and hygiene.
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