This year’s Spring Meetings of the World Bank Group and International Monetary Fund took place at a time of overlapping global crises. The war in Ukraine has compounded concerns about inflation, COVID-19, climate change, and debt, with many other countries also facing fragility and conflict.
The chair’s statement issued on Friday by the Development Committee, a ministerial-level forum that represents 189 member countries of the two organizations, noted that the impacts will be felt most in low- and middle-income countries, especially by their most vulnerable people, including women and children. The statement added that economic recovery is at risk amid geopolitical tensions, with investment, trade, and growth affected, even as countries face further risks from the pandemic and uneven deployment of vaccines.
You should count on us, as we count on you to support innovative approaches to the front lines of development. It is here that we can win the battles against the multiple crises we are facing.
In his remarks to the committee, World Bank Group President David Malpass described how these crises are affecting the global economy. He emphasized that the atrocities committed against civilians and the loss of life and livelihoods from the war in Ukraine are devastating. The spillover effects are being felt worldwide, with rising energy and food prices quickly impacting the most vulnerable, particularly in Africa and the Middle East. “The war must end now,” he said.
The situation calls for fast action, both to support Ukraine’s people and to ensure ongoing, robust support for low- and middle-income countries as they deal with these multiple crises. As Malpass outlined at a ministerial roundtable during the meetings, the Bank Group has quickly mobilized more than $3 billion for Ukraine – inclusive of grants, guarantees, and parallel financing from donor countries – for continuation of essential government services. Ukrainian President Volodymyr Zelenskyy also addressed attendees of the session. During the meetings, the Bank Group presented an approach paper detailing how it can best support the country and its people; the estimated cost of damage to Ukraine’s buildings and infrastructure stands at $60 billion so far.
At a media roundtable that kicked off the meetings, Malpass mentioned that the Bank Group is working on a crisis response of around $170 billion in financing capacity to address the wide-ranging needs of client countries between April 2022 and June 2023. This is modeled on the rapid surge in financing that the Bank Group provided in response to COVID-19, which provided $157 billion over a 15-month period to help countries address the health, economic, and social impacts of the pandemic.
While the war and its repercussions were top of mind, the Spring Meetings also convened a series of public events to advance dialogue on major, ongoing development challenges. Policy makers, experts, influencers, and other key stakeholders discussed digital development, climate action, trade and subsidies, fragility, debt, and human capital. Among key takeaways from the meetings:
- Digital technologies are transforming many jobs and services; they can help enable long-term growth and prosperity, as well as build resilience to crises. But many people in developing countries remain unconnected or are not yet benefiting. A collective commitment from the public and private sectors is needed to close the gaps and build an equitable digital economy for all.
- To address both climate change and development, we need to move from high-level commitments to real, tangible action, including large-scale investments that support a low-carbon transition and build resilience.
- Fragile and conflict-affected economies need investment and a vibrant private sector to create jobs, generate economic growth, and build infrastructure. Forced displacement is a global crisis, but inclusive policies and investment can enable refugees to help bring about social and economic prosperity.
- To make debt work for development, we must allow for rapid debt restructuring; support medium-term reductions in unsustainable debt burdens; and create better practices so that future borrowing is sustainable, with stronger transparency and accountability for debt contracts.
- Countries have been innovative in building and protecting human capital – the knowledge, skills, and health that people need to achieve their potential – even as COVID-19 has reversed many of their gains. Sustained political commitment and financing is needed to shore up human capital and support stronger, more inclusive growth.
In his Warsaw speech, Malpass urged countries to take action to avert a global food crisis, to keep markets open, and to encourage investment inflows. He stressed that countries need to broaden the investment base and avoid concentrating wealth and income in narrow segments of the population. He also noted that ensuring security and stability involves constant effort to strengthen institutions, reduce inequality, and raise living standards. In concluding, he emphasized that World Bank Group is a committed partner in these efforts: “You should count on us, as we count on you to support innovative approaches to the front lines of development. It is here that we can win the battles against the multiple crises we are facing.”