The first case of Coronavirus (COVID-19) was detected on 31st December in
Wuhan, China. By late January, the virus had affected a huge number of
inhabitants in Wuhan and was spreading to the rest of China and the world, so
the World Health Organization declared it to be a Public Health Emergency of
International Concern and my March, it was declared a pandemic.
The rapid and unprecedented spread of COVID-19 has resulted in many nations
closing their borders and prohibiting international travel, leading the world to
a phase of economic decline caused by a slowdown in industries. Amid this fear
of a global recession, the World Bank approved, on March 17th, an increased
package of $14 billion to financially assist companies and countries in their
efforts to prevent, detect and respond to the spread of COVID-19.
The World Bank, in its statement, said that this increased package is predicted
strengthen national systems for public health preparedness including disease
containment, diagnosis and treatment, and support the private sector
Malpass, President of the World Bank, said that the financial and economic blow,
caused by the pandemic, to companies, business and also their employees, will be
softened by this financial assistance.
The International Finance Corporation (IFC), a member of the World Bank Group,
has promised to increase its COVID-19 related financing availability to up to $8
billion from $6 billion as part of the $14 billion package, to support private
companies and their employees affected by the economic dip caused by the
pandemic. This additional $2 billion was added to help micro, small and medium
sized businesses after they were recognized to be most susceptible to this
The IFC response focuses of 4 major components:
- $2 billion for Real Sector Crisis Response Facility. This is to help
clients in manufacturing, infrastructure, agricultural and service
industries that have been affected by the pandemic.
- $2 billion from the Global Trade Finance Program to cover payment risks
of financial institutions so they can provide trade financing to import and
export companies. This is expected to support small and medium sized
companies in global supply chains.
- $2 billion from the Working Capital Solutions Program, to provide fund
to emerging-market banks that extends credit to help businesses shore up
their working capital.
- $2 billion from the Global Trade Liquidity Program and the Critical
Commodities Finance Program, to propose risk-sharing support to local banks
such that they can continue financing companies.
The bulk of the IFC financing will go to helping clients who offer trade
financing, working capital support and medium-term financing, businesses in
sectors like tourism and manufacturing that have been greatly affected by the
situation, and sectors involved in fighting the pandemic like the healthcare
On April 2nd, the World Bank's board of Executive Directors approved the first
set of emergency support operations for developing countries and it is also
prepared to deploy up to $160 billion over the next 15 months to support
countries in using COVID-19 measures to respond to immediate health consequences
of the pandemic and bolster economic recovery.
This broader financial assistance program is in line with the United Nations'
measures for economic recovery as it aims to reduce recovery time, create
conditions for economic growth by supporting small and medium businesses, and
help protect the vulnerable. Among the initial projects approved were financial
assistance in the form of millions to Ethiopia, Mongolia, Cambodia, Tajikistan,
Haiti, Yemen, Afghanistan, Pakistan and even $1 billion to India.
This four-year project aims to develop the preparedness of India's health care
systems by supporting screening, contact tracing, laboratory diagnostics,
procurement of personnel protective equipment and setting up of new isolation
wards. According to the project document, the government assessment seems to be
that outbreaks like Covid-19 will continue in the coming years, and hence there
needs to be a long-term strategy to tackle the next wave of the disease.
For example, one of the focus areas of this partnership is on India's emergency
response system to the disease-the aim of this component of the project is to
slow down and limit the spread of Covid-19, the joint document says. This, both
the parties say, will be achieved through providing immediate support to enhance
disease detection capacities through increasing surveillance capacities, port
health screening, etc.
With funds already set aside to help developed countries, the World Bank, in its
broader economic program has recognized the impact of this crisis on developing
countries in the Global South. The financial assistance will go a long way in
helping countries like India, Mongolia, Haiti, Ecuador, Ethiopia and Tajikistan
bring more medical professionals on board, ensure public outreach, increase
resources and improve the overall strength and capacity of the healthcare