The COVID-19 pandemic¡¯s toll is enormous, and the developing world is likely to suffer the longest and hardest. ÐÓ°ÉÂÛ̳ Group is taking fast, broad, early action to help developing countries fight the health, social and economic impacts of the pandemic. ÐÓ°ÉÂÛ̳ is providing large net positive flows to the world¡¯s poorest countries and making rapid progress in directing up to $160 billion to our client countries. This note focuses on key highlights of the ÐÓ°ÉÂÛ̳¡¯s response, which we hope can help inform a revision of the paper recently issued by the Center for Global Development (CGD), which contained some factual errors.1
The Bank¡¯s response to COVID-19
Between April and September 2020 alone, the ÐÓ°ÉÂÛ̳ has committed $43 billion, or 41 percent of the $104 billion of lending capacity indicated in March for the 15 months from April 2020 to June 2021.2 More recently, on October 13, 2020, the Board of Executive Directors approved an envelope of $12 billion to finance developing countries¡¯ acquisition and deployment of COVID-19 vaccines, when they are deemed safe and effective. We have a strong pipeline of operations under preparation and are on track to deploying WB resources to support countries with the resources they need.
ÐÓ°ÉÂÛ̳ COVID-19 financial response is in support to government policies and actions to respond to the health crisis, support households and firms, finance the response, and build the foundations of an early, sustainable recovery. The WBG developed a technical approach to the response, drawing on international experience, lessons from evaluation, and technical advice from partner institutions. This framework is customized to countries¡¯ needs and context. Close to a quarter of the commitments in the COVID-19 response is aimed at ¡®saving lives¡¯3, the health-related pillar in the Bank¡¯s approach. We are now working to support the COVID-19 health response in over 110 developing countries ¡ªhome to more than 70% of the world¡¯s population. We expect that the newly approved $12 billion facility for vaccines to add to our efforts under this pillar. The remaining response so far has focused 28 percent on ¡®protecting the poor and vulnerable¡¯; 13 percent on ¡®ensuring sustainable business growth and jobs¡¯; and 36 percent on the fourth pillar, ¡®strengthening policies, institutions and investment for rebuilding better¡¯.
ÐÓ°ÉÂÛ̳¡¯s COVID-19 response has been focusing on increasing financial flows and technical support to low and low-middle income countries, including Fragile, Conflict and Violence (FCV) and Small Island states, which have limited capacity to withstand the COVID-19 shock. Of the $43 billion committed by end September, $25 billion was for IDA-eligible countries, of which 38 percent has a specific focus on crisis support (in health, support to people or firms, and support to building back better); and $18 billion from IBRD, of which 71 percent has a specific focus on crisis support. Financing to FCV countries was $7.6 billion and financing to Small States was $0.6 billion (for both group of countries, 33 percent of these commitments was specifically for crisis response).
We are using all our instruments to support the response, including investment projects, program for results and development policy operations. The instrument mix is driven by specific country needs and nature of the COVID-19 response and alternative sources of financing. Policy and institutional reforms ¨C for instance to introduce or enhance social safety nets and unemployment benefits, finance COVID response expenditures while allowing for tax deferrals, or laying the foundations for sustainable, green recovery ¨C are critical, and are part of countries¡¯ response that the Bank is supporting with DPOs. As a result, both the volume and share of Development Policy Operations (DPO) increased in late FY20, bringing the DPO average to 30 percent ($17 billion in volume) in FY20, up from an average of 25 percent in the previous five years ($11 billion average over FY15-19). IDA countries are making greater use of DPOs for the COVID-19 response. The IDA share of DPOs in FY20 was 24 percent ($7 billion), compared to an average of 13 percent ($3 billion) over FY15-19. IBRD DPOs stayed essentially flat i