Poorest countries get $1.3bn boost

Friday, December 11, 2009

Washington - The World Bank has approved a $1.3-billion crisis response window for the poorest countries.

The funds, requested by the Group of 20 (G20) to explore the benefits of a new crisis response mechanism to protect low-income countries from crises, were allocated to the International Development Association (IDA), the Bank's fund for the world's poorest countries.

The duration for the crisis response window will be 18 months ending in June 2011.

"With the new financial support mechanism approved today, IDA will be able to provide additional financial support to mitigate the impact of this crisis on poor countries," said World Bank Group President Robert B Zoellick.

"We must assist low-income countries in regaining lost ground to overcome poverty and achieve the Millennium Development Goals."

Low-income countries have been hit by the crisis through declining external trade, remittances, and foreign direct investment flow, and many are already experiencing fiscal stress.

"Governments are confronted with increased spending needs for social safety nets as falling revenues place constraints on expenditures for education, health, agriculture, and infrastructure," said Axel van Trotsenbur, World Bank Vice President: Concessional Finance and Global Partnerships.

"The new window responds to strong demand from IDA countries to protect core spending in these critical areas."