New Delhi : As Latin America and the Caribbean (LAC) continues to deal with the negative impact of the pandemic, the World Bank Group (WBG) deployed $20.7 billion to support the region in its just-completed fiscal year (ending June 30, 2022).
This brings the WBG support to LAC since April 1, 2020, to an unprecedented total of $49.8 billion to fight the health, economic, and social impacts of COVID-19, as well as support the region’s response to the overlapping challenges of the sharp economic slowdown, rising inflation and deepening food insecurity due to the war in Europe, among others.
World Bank Group commitments during this period included a combined $24.9 billion from the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA), typically referred to as the World Bank, $19.5 billion from the International Finance Corporation (IFC) to promote private sector led sustainable development, and $5.4 billion in guarantees by the Multilateral Investment Guarantee Agency (MIGA).
“The World Bank Group has provided strong support to the countries of Latin America and the Caribbean, reaching a record $49.8 billion in total lending since the pandemic began,” said World Bank Vice President for Latin America and the Caribbean Carlos Felipe Jaramillo. “As we look beyond COVID, our region faces important challenges and we are committed to working together in critical areas such as addressing education losses, regaining fiscal sustainability, strengthening health, acting on the climate change agenda, and fostering climate-smart agriculture and the digital economy, to build a more sustainable and inclusive growth that benefits the people of Latin America and the Caribbean, especially the most vulnerable.”
The World Bank’s financing and expertise this past fiscal year focused on social protection, vaccine procurement and deployment, strengthening countries’ health systems, supporting fiscal sustainability, and a green recovery.
In the past fiscal year, IFC, the private sector arm of the World Bank Group, committed $8.7 billion in Latin America and the Caribbean, including mobilization ($3.7 billion) and short-term finance ($1.8 billion). Since April 2020, when IFC kickstarted its COVID-19 response, IFC has committed $6 billion in liquidity support in the region – both COVID financing outside and through the Fast Track COVID Facility (FTCF) –, which has helped expand lending to MSMEs and women entrepreneurs so they can continue operations, worked with financial institutions to promote green finance, promoted sustainable infrastructure projects, and supported export-oriented agribusinesses in region.
“Our priority in the region is to help the private and public sectors work together to overcome crucial development challenges and navigate the economic headwinds that our countries are facing,” said Alfonso Garcia Mora, IFC’s Vice President for Europe and Latin America and the Caribbean. “In the last 12 months, IFC delivered projects with high development impact that help improve people’s lives, promote inclusion and help drive the growth of the region’s green economy”, he said. “In the last fiscal year, 47 percent of our own account investments in this region were focused on climate-smart projects and we are ready to intensify our efforts to strengthen a green, inclusive and sustainable recovery so the region can reach its development goals”, he added.
MIGA, the world’s leading insurer of non-commercial risks, whose mandate is to help drive impactful foreign direct investment to developing countries, issued $1.6 billion in new guarantees in Latin America and the Caribbean. Since April 2020, it has issued $5.4 billion for the region.
“MIGA’s guarantees enabled foreign capital to come into the region to help build resilience to shocks like pandemics and climate change,” said Junaid Ahmad, MIGA’s vice president of operations. “We are pleased that with our help projects such as Port Antioquia, a major port in the region, were implemented, achieving important development goals.”
Since the start of the COVID-19 pandemic, total World Bank Group financing has reached $272 billion to help public and private sector clients fight the health, economic, and social impacts of the COVID-19 pandemic.