According to Reuters, citing an internal document of the bank, three countries have already fully activated the new financing instruments. Another 24 are finalizing the procedures. These are mechanisms for quick access to funds under the World Bank’s existing programs.
According to the source, 27 countries are part of a broader group of 101 countries that have access to pre-agreed WB anti-crisis instruments. In particular, 54 countries are connected to the Rapid Response Option mechanism, which allows almost instant redirection of up to 10% of funds from existing projects to combat the crisis.
World Bank President Ajay Banga warned last month that the organization is preparing for a large-scale demand for emergency financing. According to him, the bank is able to quickly provide from $20 billion to $25 billion through accelerated credit lines and special reserve instruments. Additionally, the organization can release up to $60 billion within six months by reallocating its existing portfolio.
Against this background, the International Monetary Fund has so far received significantly fewer requests than expected. IMF head Kristalina Georgieva said earlier that the fund was preparing for requests of up to $50 billion. However, Reuters sources say that many governments are deliberately avoiding IMF programs.
The reason is the fund’s tough conditions. Unlike the World Bank, IMF programs often require spending cuts, fiscal austerity and painful reforms. In the face of growing social pressures, many countries prefer more flexible emergency financing mechanisms.
