Today, the World Bank Group announced that “it would substantially increase financial support for developing countries” by committing the International Bank for Reconstruction and Development [http://www.worldbank.org/ibrd](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, of which more than $35 billion could be loaned this year (compared to $13.5 billion in 2007).
It also announced the “the launch or expansion of four facilities” led by the International Finance Corporation (the World Bank’s “private sector arm”) that will specifically target issues faced by the private sector in light of the present global economic crisis. The framework of the four facilities include the following specific initiatives:
- a $1 billion “global equity fund to recapitalize distressed banks” which would be matched with $2 billion of funds from private investors;
- a new Infrastructure Crisis Facility which will “provide roll-over financing and help recapitalize existing, viable, privately-funded infrastructure projects facing financial distress” by investing at least $300 million and mobilizing between $1.5 billion and $10 billion “from other sources”;
- doubling the budget of the IFC’s current Global Trade Finance Program from $1.5 billion to $3.0 billion”; and
- improving present IFC advisory services programs at an estimated cost of $40 million over three years.
The World Bank Group also released its background paper, entitled, “Global Financial Crisis, Responding Today, Securing Tomorrow,” to be delivered at the weekend’s G20 summit in Washington. The background paper urges policymakers and governments of developed countries to “avoid putting in place policies structures, and norms that undermine or exclude the interests of developing countries.” Further, the paper emphasizes the importance of multilateral cooperation that will incorporate a “flexible network of institutions, maximizing the strength of interconnected global actors, including not just the existing institutions such as the World Bank, the IMF and the United Nations, but also private sector firms and civil society organizations.”
Robert Zoellick, President of the World Bank Group, in preparation for the G20 summit in which both the World Bank Group and the IMF will be participating, stated that, “[t]he response to this crisis must be global, coordinate, flexible and fast. While challenges need to be addressed at the country level, it is more critical than ever that the international community acts in a coordinated and supportive way to make each country’s task easier.”