World Bank document shows 27 countries seeking crisis funding
An internal World Bank document reportedly shows 27 countries are moving to secure rapid access to crisis financing as the Iran war disrupts energy markets and supply chains.
Twenty-seven countries have taken steps since the outbreak of the Iran war to set up crisis instruments that would allow them to quickly access funding from existing World Bank programmes, according to an internal document seen by Reuters.
The document did not identify the countries involved or specify the total amount of funding that could be sought. The World Bank declined to comment.
It showed that three countries had approved new instruments since the Middle East conflict began on February 28, while the others were still completing the process.
The war and the disruption it has caused to global energy markets have hit supply chains and prevented vital fertiliser shipments from reaching developing countries.
Officials in Kenya and Iraq have confirmed that they are seeking rapid financial support from the World Bank to address the fallout from the conflict. Kenya is facing surging fuel prices, while Iraq has been hit by a sharp fall in oil revenue.
The 27 countries are among 101 with access to some form of pre-arranged financing instrument that can be tapped during a crisis. This includes 54 countries that have signed up to the Rapid Response Option, which allows them to use up to 10% of their undisbursed financing.
World Bank President Ajay Banga said last month that the bank’s crisis toolkit would allow countries to draw on pre-arranged contingent financing, existing project balances and fast-disbursing instruments, giving them access to an estimated US$20 billion to US$25 billion.
He said the bank could also reorient parts of its portfolio to raise the total to US$60 billion over six months, with further longer-term changes potentially bringing the figure to around US$100 billion.
At the time, International Monetary Fund managing director Kristalina Georgieva said she expected up to a dozen countries to seek between US$20 billion and US$50 billion in near-term assistance from the global lender. However, few requests have so far been recorded, according to three sources familiar with the matter.
“Countries are definitely in wait-and-see mode,” said one of the sources, who spoke on condition of anonymity.
Kevin Gallagher, director of the Global Development Policy Center at Boston University, said countries appeared more willing to seek World Bank funding than negotiate with the IMF, as IMF programmes generally require austerity measures that could worsen social unrest already seen in countries such as Kenya.
Source: Reuters
