The World Bank on Tuesday announced an initial US$12 billion in immediate funds to assist countries grappling with the health and economic impacts of the COVID-19 outbreak that has spread quickly from China to about 80 countries.
World Bank president David Malpass said there were still “many unknowns” about the fast-spreading virus and “much more” aid might be required, but he declined to elaborate.
The announcement underscored escalating concern about the economic and human impact of the virus.
The WHO warned of a global shortage of protective equipment to fight the disease, as well as price gouging as the death toll from the respiratory illness mounted.
Also on Tuesday, the US Federal Reserve cut interest rates in an emergency move to try to prevent a global recession, and G7 finance officials said they were ready to adopt fiscal and monetary measures where appropriate.
Malpass called on countries to coordinate their actions on a regional and international level, saying the speed and breadth of the response would be critical to saving lives.
“We’re announcing today an initial package of immediate support that will make available up to US$12 billion to respond to country requests for crisis financing of their immediate needs and also to lessen the tragic impacts of the crisis,” he said.
“The point is to move fast; speed is needed to save lives,” Malpass said during a teleconference with reporters. “There are scenarios where much more resources may be required. We’ll adapt our approach and resources as needed.”
The bank’s International Development Association, which helps the world’s poorest countries, could also receive additional funds in the second quarter if its Pandemic Emergency Financing Facility (PEF) is triggered, which has not occurred yet, Malpass said.
That would not require global health officials to declare the outbreak a pandemic, he added.
Poor countries with weak health systems were the most vulnerable in such outbreaks, he said, but past experience with Ebola and other outbreaks showed that taking the right measures quickly could lessen transmission of the disease and save lives.
He also cautioned countries against taking measures that would further limit trade.
Several countries had already requested aid, Malpass said, but declined to name them.
The World Bank said the US$12 billion in fast-track grants, loans and low-interest loans would help developing countries provide better access to health services, strengthen disease surveillance and bolster public health interventions, as well as work with the private sector to reduce the impact on economies.
About US$4 billion of the funding would be reprogrammed from other World Bank instruments, officials said.
The World Bank said its International Finance Corp (IFC) would work with commercial bank clients to expand trade finance and working capital lines as countries scramble to get needed supplies to contain the virus.
The IFC would also work with corporate clients in strategic sectors, such as medical equipment and pharmaceuticals, to sustain supply chains and limit downside risks.
Separately, the World Bank and the IMF said they would adopt a “virtual format” for their spring meetings next month instead of convening in Washington, given concerns about the fast-spreading coronavirus.
The meetings, scheduled this year for April 17 to 19, usually bring about 10,000 government officials, journalists, businesspeople and civil society representatives from across the globe to a tightly packed, two-block area of downtown Washington, which houses the institutions’ headquarters.
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