By June 2021, the World Bank should step forward its efforts to include $160 billion in coronavirus assistance and to consider potential emergency funding and debt relief for developing countries, as per the bank’s steering committee.
The Joint World Bank and International Monetary Fund (IMF) Development Committee said in a statement issued that the “bold and decisive” response should be followed by a review of the financial ability of the World Bank Group beyond the current fiscal year to ensure that it remains “adequately capitalized to fulfill its mandate.”
According to the statement, So far, during the pandemic, the IMF has given around $100 billion in assistance to over 80 countries. The IMF was also urged “to deploy all the tools and services available to help members achieve a lasting exit from the crisis while creating more resilient and inclusive economies.”
The statement further added that the World Bank funding has so far reached $45 billion for more than 100 countries, including $11 billion from its private sector arm, the International Finance Corp, and $2 billion from its Multilateral Investment Guarantee Agency.
Recently, Steven Terner Mnuchin, US Treasury Secretary, warned the World Bank to “judiciously and transparently control its financial capital.”
He said that the bank should offer priority to funds for poor countries with the greatest need, not for those with good access to market finance.
“So as not to burden shareholders with premature calls for new financing,” Mr. Mnuchin added.
A $13 billion capital increase was approved by the World Bank shareholders in 2018 that allowed the bank to wind down lending to wealthier middle-income countries, such as China, to transfer resources to needier countries.
The Development Committee, consisting of 25 finance ministers and central bank governors representing major shareholder countries of the World Bank and the IMF, including Mnuchin, said the World Bank and other multilateral development banks should “explore additional emergency funding proposals for COVID-19” for the poorest countries.