Yesterday, the World Bank and the IMF issued statements confirming that the Japanese Government would make a monetary commitment in the amount of a $2 billion investment in one of the World Bank's funds and a $100 billion loan to the Fund, to provide assistance to countries with emerging markets.
Earlier last week, the World Bank renewed its commitment to support developing countries “by committing the International Bank for Reconstruction and Development (one of the two member-country-owned institutions that compose the World Bank Group) to lend up to $100 billion over the next three years.” Through the Japan Bank for International Cooperation, Japan will be contributing $2 billion directly to a “global equity fund to recapitalize distressed banks,” which is one of four facilities that the World Bank announced last week, under the auspices of the International Finance Corporation (IFC), to “specifically target issues faced by the private sector in light of the present global economic crisis.” IFC intends “to invest $1billion of its own money in the fund,” and further estimates “that a fund of $3 billion would have a leveraged impact of around $75 billion as others co-invest with the fund, and the banks receiving capital would be able to lend to their clients at greater levels.”
Mr. Robert Zoellick, the President of the World Bank Group stated that, Japan’s contribution will “help significantly in shoring up banks in poor countries and will ultimately protect the poorest from the impact of the global financial crisis.” Mr. Dominique Strauss-Kahn, Managing Director of the IMF, in his statement noted that, “Japan’s action during this period of unprecedented stress for the global financial system will serve to increase confidence that the IMF’s resources will be sufficient to meet the financing needs of its 185 member countries- particularly our emerging market members- should they need to turn to the Fund for support.”
