The World Bank and the International Monetary Fund (IMF) have teamed up to offer financial assistance to countries whose economies are threatened by the coronavirus disease.
This was made known on Monday in a statement jointly signed by the World Bank president, David Malpass and IMF managing director, Kristalina Georgieva.
According to the statement, “The IMF and the World Bank Group stand ready to help our member countries address the human tragedy and economic challenge posed by the COVID-19 virus. We are engaged actively with international institutions and country authorities, with special attention to poor countries where health systems are the weakest and people are most vulnerable.”
The two Bretton Woods institutions said further, “We will use our available instruments to the fullest extent possible, including emergency financing, policy advice, and technical assistance. In particular, we have rapid financing facilities that, collectively, can help countries respond to a wide range of needs. The strengthening of country health surveillance and response systems is crucial to contain the spread of this and any future outbreaks.”
While stressing the importance of international cooperation in dealing with the health and economic impact of the COVID-19 virus, the statement added that “the IMF and the World Bank Group are fully committed to providing the support that people in our member countries expect from us.”
According to the IMF in a separate statement, member countries can benefit from four different facilities to tide them over the economic difficulties occasioned by the disease. These are emergency financing, augmenting existing lending programs, grants for debt relief and new financing arrangement.
The emergency financing, which comprises Rapid Credit Facility (RCF) and Rapid Financing Instrument (RFI), provides emergency financial assistance to member countries without the need to have a full-fledged program in place. “These loans can be disbursed very quickly to assist member countries to implement policies to address emergencies such as the coronavirus,” IMF said.
Countries that want to augment existing lending programs will have their existing programs modified “to accommodate urgent new needs arising from the coronavirus.”
Grants for debt relief, which is made up of the Catastrophe Containment and Relief Trust, allows IMF to provide grants for debt relief to the poorest and most vulnerable countries with outstanding obligations to the IMF to help address disasters, including public health disasters.
The IMF can also provide support through a new financing arrangement under its existing facilities such as Stand-By Arrangements.
The Bretton Wood institution said it would continue to support vulnerable countries through its capacity development.
It added, “Given the need to quickly redirect public resources, the IMF will remain closely engaged with the affected member countries and development partners, working as needed to reprioritise capacity development activities.”