In response to COVID-19 severely damaging the lives and livelihoods of millions of people in developing countries, the World Bank Group deployed over $157 billion to fight the pandemic’s health, economic, and social impacts over the last 15 months (April 1, 2020 – June 30, 2021). This is the largest crisis response of any such period in the Bank Group’s history and represents an increase of more than 60% over the 15-month period prior to the pandemic. Bank Group commitments and mobilizations in fiscal year 2021 (FY21) alone (July 1, 2020 – June 30, 2021) amounted to almost $110 billion (or $84 billion excluding mobilization, short-term financing, and recipient-executed trust funds).
Since the start of the pandemic, the Bank Group supported countries to address the health emergency, strengthen health systems, protect the poor and vulnerable, support businesses, create jobs and jump start a green, resilient, and inclusive recovery.
Following last year’s COVID-related economic deterioration, the global economy is expected to expand 5.6% in 2021. Thus far, the recovery is uneven and many of the world’s poorest countries are being left behind. While about 90% of advanced economies are expected to regain their pre-pandemic per capita income levels by 2022, only about one-third of emerging market and developing economies are projected to do the same. In 2020, global extreme poverty rose for the first time in over 20 years, with nearly 100 million people pushed into extreme poverty.
“Since the start of the pandemic, the World Bank Group has committed or mobilized a record $157 billion in new financing, an unprecedented level of support for an unprecedented crisis,” said World Bank Group President David Malpass. “We will continue to provide critical assistance to developing countries through this ongoing pandemic to help achieve a more broad-based economic recovery. The Bank Group has proven to be a rapid, innovative, and effective platform to support developing countries as they respond to the pandemic and strengthen resilience for future shocks. But we must do more still. I remain deeply concerned about limited availability of vaccines for developing countries, which are critical to save lives and livelihoods.”
|World Bank Group Commitments (in U.S. billions)|
|World Bank Group||Q4-FY20||FY21*||15-mo ending June 21*|
|Long-term finance (own account)||4.9||12.5||17.4|
|Recipient-executed trust funds (RETF)||1.5||6.4||7.9|
|TOTAL (excluding short-term finance, mobilization, and RETF)||39.6||84.3||123.9|
|TOTAL (including short-term finance, mobilization and RETF)||47.4||109.7||157.1|
|*Preliminary and unaudited numbers as of July 14.|
In the 15 months ending June 30, 2021, the Bank Group stretched its balance sheets, accelerated leveraging and disbursements, and front-loaded resources. Support to countries from the International Bank for Reconstruction and Development (IBRD) totaled $45.6 billion – including drawing down IBRD’s $10 billion crisis buffer in addition to Board-approved sustainable annual lending limits. Grants and zero or low-interest loans to the world’s poorest countries from the International Development Association (IDA) amounted to $53.3 billion. To meet increased financing needs, the World Bank fully used all remaining IDA18 resources in FY20 and frontloaded about half of all the three-year envelope of IDA19 resources in FY21. In February 2021, IDA donor and borrower country representatives agreed to advance IDA20 by 12 months to enable continued surge financing in the coming years.
In addition, over the same 15 months, the International Finance Corporation (IFC), the Bank Group’s private sector development arm, reached a record high of $42.7 billion in financing, including short-term finance ($10.4 billion) and mobilization ($14.9 billion), 37% of which was in low-income and fragile and conflict-affected states. IFC provided liquidity for businesses to remain in operation, while ramping up investments in companies on the frontlines of the pandemic response. To address the COVID-induced increase in the trade gap, IFC has expanded its trade and supply chain finance activities. IFC’s “Upstream” work continues to create the conditions to attract much-needed private investment to some of the world’s most difficult places and preparing the ground for a faster private sector recovery.
Despite a challenging year for borrowers and financial markets, IDA doubled the amount it raised last fiscal year from investors, reaching almost $10 billion. IBRD raised $68 billion, by mobilizing financing from investors around the globe. IBRD and IDA, both rated AAA/Aaa, raised awareness for a variety of development themes to successfully mobilize finance for sustainable development. The year also included innovations such as a unique $100 million five-year bond issued by IBRD to support the global response to COVID-19 through UNICEF. IFC, also rated AAA/Aaa, issued close to $13 billion in bonds for private sector development and job creation in emerging markets.
The Multilateral Investment Guarantee Agency (MIGA), whose mandate is to drive impactful foreign direct investment to developing countries, issued $7.6 billion in new guarantees over the same 15-month period since the onset of the pandemic, of which 19% supported projects in IDA countries and fragile settings.
In FY21, the World Bank Group’s climate finance totaled over $26 billion, it’s largest year of climate finance ever (25% above FY20, which was itself also a record). The new Climate Change Action Plan for 2021-2025 aims to integrate climate and development goals, and commits 35% of Bank Group financing to climate, on average, over the next five years, with at least 50% of World Bank climate finance supporting adaptation. In the same time frame, the Bank Group will align financing with the goals of the Paris Agreement, while helping client countries meet their Paris commitments, including supporting and implementation of development of their Nationally Determined Contributions (NDCs) and Long-Term Strategies.
‘Global learning crisis’ continues says Guterres; millions still hit
Almost two years into the COVID-19 pandemic, school closures continue to disrupt the lives of over 31 million students, exacerbating what the United Nations’ Secretary General called “a global learning crisis.”
“Unless we take action, the share of children leaving school in developing countries who are unable to read could increase from 53 to 70 per cent”, António Guterres warned in a video message marking the International Day of Education, on Monday.
The UN chief remembered the “chaos” that COVID-19 caused in education worldwide, noting that, at the pandemic’s peak, some 1.6 billion school and college students had their studies interrupted.
Despite the improvement, he believes the crisis is “not over yet”, and the turmoil goes beyond questions of access and inequality.
The theme for the day this year, is “Changing course, transforming education”.
For Mr. Guterres, the world is “changing at a dizzying pace, with technological innovation, unprecedented changes in the world of work, the onset of the climate emergency, and a widespread loss of trust between people and institutions.”
In this scenario, he believes conventional education systems are “struggling” to deliver the knowledge, skills and values needed to create a greener, better and safer future for all.
Because of these challenges, he is convening a Summit on Transforming Education in September.
“The time has come to reignite our collective commitment to education”, he said.
For him, that means “putting education at the heart of broader recovery efforts, aimed at transforming economies and societies and accelerating progress on sustainable development.”
It also means financial solidarity with developing countries and understanding how national education systems can be reformed, between now and 2030.
Mr. Guterres noted the Summit will be the first time that world leaders, young people and all education stakeholders come together to consider these fundamental questions.
Assembly, Abdulla Shahid, also stressed the need to reflect on the impact of two years of the COVID-19 pandemic.
Highlighting the challenges created for the empowerment of children and youth, Mr. Shahid mentioned a UN joint publication showing that students worldwide could lose a total of $17 trillion in lifetime earnings as a result of these constraints.
For him, this number is a call to close the digital divide, to empower girls and boys, in particular those in rural and isolated areas, and to strengthen support for persons living with disabilities, as well as other vulnerable groups.
“In a world of increasing complexity, uncertainty, and precarity, knowledge, education and learning need to be reimagined”, he argued.
Mr. Shahid also believes the world needs “an education system that could leverage humanity’s collective intelligence.”
“A system that advances, rather than subverts, our aspirations for inclusive education based on the principles of justice, equity and respect for human rights”, he concluded.
According to new data released by the UN Educational, Scientific and Cultural Organization (UNESCO) on Monday, schools are currently open in 135 countries, and in 25 nations, it has been temporarily suspended by extending the end-of-year break.
Only a dozen countries have opted to close schools and pivot to fully remote rather than in-person learning since the outbreak of the Omicron variant.
This is in stark contrast with the same period last year when most schools were closed, and learning was fully remote in 40 countries.
For the UN agency, this shows that a large majority of countries are using lessons from the past two years to keep classrooms accessible, with reinforced health and safety protocols.
“Education continues to be deeply disrupted by the pandemic, but all countries are now keenly aware of the dramatic costs of keeping schools closed as UNESCO said for the past two years”, said the agency’s Director-General, Audrey Azoulay.
A dozen countries surveyed – including Brazil, France, Kazakhstan, Mexico, Palestine and Ukraine – now use traffic light monitoring systems that trigger different measures according to levels of infection: mask wearing, hand washing, ventilation, but also indoor and outdoor distancing, and class closures on a case-by-case basis to avoid impacting all students.
Other countries, including Canada, France, United Kingdom and Italy, are also using mass rapid test-to-stay policies.
Once again, UNESCO called for more efforts to vaccinate educators, noting teachers were not included in any priority group in up to a third of countries.
For the UNESCO chief, more action is needed to bring back to school all the children who have moved away from it and to recover learning losses.
“Without remedial action and focus on the most vulnerable students, the COVID-19 pandemic will carry dramatic long-term consequences”, Ms. Azoulay warned.
In fact, more than 50 per cent of teachers state that students had not progressed to the levels expected, according to a large-scale survey conducted by UNESCO and the International Association for the Evaluation of Educational Achievement.
In the study, conducted in 11 countries, most teachers agreed that it was difficult to provide necessary support for vulnerable students. And over 50 per cent of students said they were anxious about the changes taking place.
Widodo emphasizes importance of G20 focus on resilient health systems,
The G20 and advanced economies must work together to create a more resilient and responsive global health architecture to face future threats and pandemics, said President Joko Widodo of Indonesia in his address to the Davos Agenda 2022.
He said the International Monetary Fund should be tasked to mobilize resources to revitalize global health architecture. This should include a global contingency fund for medical supplies, building capacity in developing countries to manufacture vaccines and the creation of global health protocols and standards.
“The costs will be much lower than the losses we sustained due to the vulnerability of the system during the pandemic,” he said.
In discussion with Klaus Schwab, Founder and Executive Chairman of the World Economic Forum, Widodo highlighted that “the G20 will play an important role in mobilizing the development of this global health architecture” and added: “I trust that advanced economies will not object to supporting such initiatives.”
Widodo – whose country holds the presidency of the G20 during 2022 – invited all global business leaders to contribute their ideas to the G20’s three key goals for 2022: creating a more resilient global health system; optimizing digital technology to support societal transformation; and driving a fair and affordable transition to clean energy and a circular economy. “The benefits must be felt by wider society,” he said, adding that six of Indonesia’s sectors are “wide open” for foreign investment – export-oriented labour-intensive industries (including health), renewable energy, infrastructure, automotive (especially electric vehicles), tourism and value-added mining.
In response to a question on how Indonesia – a nation heavily dependent on coal-fired power – could accelerate its own energy transition, Widodo said that developing countries need technology transfer and financial support from advanced economies to ensure the transition does not burden their citizens. Indonesia needs $50 billion for its renewable power sector and a further $37 billion for forestry, land use and marine sectors. “Concrete outcomes can only be achieved through strong cooperation,” he said. “Technology and financing will be key.”
The president pointed out that, as part of its roadmap to reach net zero by 2060, Indonesia had slashed the coverage area of forest fires sevenfold, from 1.7 million hectares in 2014 to 229,000 hectares in 2021. The number of hotspots fell over the same period from 89,000 to just 1,300. The country has restored 3.74 million hectares of peatlands since 2016 and rehabilitated 50,000 hectares of mangrove forests in the past year. Its mangrove-rehabilitation target is 600,000 hectares by 2024 – the most ambitious such programme in the world, providing, he said, a “carbon sink equivalent to four tropical forests”.
To finance the green transition, Widodo has initiated a carbon trading system that will deliver “results-based payments” for actions that reduce carbon emissions as well as a carbon tax on coal-fired power plants, due to start in April.
“Indonesia has the potential to be a global market leader in carbon trading and is predicted to surpass the carbon trade potential of Peru, Kenya and Brazil, as countries with the same tropical forest cover,” he said. The government also plans to raise capital by issuing environmental and social bonds, and through REDD+ projects that reduce deforestation and promote sustainable forest management.
Davos Agenda Session on Space and Climate Opens Up New Frontiers
European Space Agency astronaut Matthias Maurer connected live to a session on Thursday at the Davos Agenda 2022 from the International Space Station, somewhere high above the Pacific, to discuss how space research can improve life on Earth.
While in orbit on a six-month mission with the European Space Agency (ESA), Maurer will support a wide range of science experiments and technological research, including those that address transmissions of disease, the reduction of carbon emissions and human health-related activities. Knowledge gained through his mission will contribute to development that benefits life on Earth.
“We have worked hard in the past few weeks and months to send back cargo that we harvested for scientists to analyse all these samples that we produced in space, and to produce science and knowledge for humanity out of it,” he said.
He added that the cross-country and international collaboration aboard the space station should also be a model for how the world tackles major challenges, such as climate change. From his view, Maurer described the beauty of the planet, but also pointed out that he could see the impact of climate change from space.
“When we fly around the Earth (16 times a day), we cross over areas that are very arid and dry and I can see scars on the planet where people are digging deep to extract resources. So we are actively reshaping the planet. We are cutting down trees and burning down rainforests. I see the flames. I also see the flooding.”
Back on Earth, Al Gore, Vice-President of the United States (1993-2001); Chairman and Co-Founder, Generation Investment Management, explained how space technology and artificial intelligence can help address climate action. He highlighted the work of Climate TRACE, a global coalition created to make meaningful climate action faster and easier by independently tracking greenhouse gas emissions with unprecedented detail and speed.
“Some things you can see directly from space, like methane, but the difficulty of measuring CO2 emissions against a highly varied CO2 background on the Earth make it necessary to use AI to get precision we need,” he said. He added that if you consider something like GPS, it is clear how quickly the opportunities offered by space tech and space exploration can become integrated into our lives.
But the data and knowledge that is gained from space should not be limited to those who own satellites, said Sarah Al Amiri, Minister of State for Advanced Technology, Ministry of Industry and Advanced Technology of the United Arab Emirates. “If only countries with access to satellites get access to the data, we deny other countries the opportunity to benefit from that knowledge,” she said.
According to the World Economic Forum’s Global Risks Report 2022, space is increasingly crowded and commercialized. While the diversification of actors is for many an exciting development, dated space governance frameworks are coming under considerable pressure, exposing fault lines between the ambitions of different players and the acceptability of their actions.
Echoing this message, Josef Aschbacher, Director-General of the ESA, noted that the volume of satellites indicates that regulation is important.
However, it will have to keep up with a fast-changing industry, which, according to Chris Kemp, the Founder, Chairman and Chief Executive Officer of Astra, is currently seeing a revolution of sorts. “Access is increasing all the time thanks to significant falls in the cost of putting satellites into space and this has enabled a new generation of entrepreneurs to build companies, to take these companies public and provide new capabilities.”
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