The World Bank Group has announced the creation of a two billion- U.S. dollars fast-track facility to speed up grants and long-term, interest-free loans to help the world's poorest countries cope with the impacts of the global financial crisis.
The International Development Association (IDA) Financial Crisis Response Fast-Track Facility, approved late Tuesday by the World Bank's Board of Executive Directors, will allow the Bank Group to provide rapid funding for social safety nets, infrastructure, education and health.
"The poorest people will be hit the hardest by the crisis that is likely to get worse next year. Our Global Economic Prospects report projects developing country growth will be 4.5 percent next year, down from 7.9 percent in 2007," said World Bank Group President Robert B. Zoellick according to a statement issued in Nairobi.
"We want to help countries manage this downturn with rapid financing to help minimize its impacts and by assisting them in designing supportive policies."
The facility would fast-track an initial 2 billion dollars of the 42 billion dollars of IDA15 resources available to 78 of the world's poorest countries over the coming three years.
"We cannot afford business as usual. We need a human rescue package, not just a financial rescue package -- and we need a new rapid response capability to make sure the money gets quickly to where it is most needed," said Zoellick.
"Already 100 million people have been driven into poverty as a result of high food and fuel prices, and we estimate that a 1 percent decline in developing country growth rates will trap 20 million more people in poverty."
The facility will foster rapid Bank response to the pressing needs of IDA countries based on more swift World Bank analysis of those needs. It will finance expenditures needed to maintain economic stability and sustain growth, address volatility and protect the poor.
Operational responses will include funding budget expenditures in infrastructure services, education, and health and social safety nets.
"We hope that our development partners will also benefit from our early assessment of what these countries need to help anticipate, pre-empt and manage the crisis," said Managing Director, Ngozi Okonjo Iweala." Most importantly, we hope that this facility can help leverage additional resources from other development partners to address this crisis."
The new IDA Facility builds on the Food Crisis facility created earlier this year to support countries hit hard by the food crisis.