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World Bank should continue to provide aid and review capital adequacy – Development Committee

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FILE PHOTO: A participant stands near a World Bank logo at the International Monetary Fund – World Bank Annual Meeting 2018 in Nusa Dua, Bali, Indonesia, October 12, 2018. REUTERS / Johannes P. Christo

WASHINGTON (Reuters) – The World Bank is expected to continue efforts to provide $ 160 billion in coronavirus aid by June 2021 and explore additional emergency funding and debt relief for developing countries, said Friday the board of directors of the bank.

In a statement, the Joint Development Committee of the World Bank and the International Monetary Fund said the “bold and decisive” response should be accompanied by a review of the financial capacity of the World Bank Group beyond l ‘ongoing exercise to ensure that it remains’ sufficiently capitalized to fulfill its mandate.

The statement said the IMF has so far provided some $ 100 billion in aid to more than 80 countries during the pandemic. He also urged the IMF “to deploy all the tools and resources available to help members to emerge sustainably from the crisis while building more resilient and inclusive economies”.

The statement said the World Bank’s support to more than 100 countries has so far totaled $ 45 billion, including $ 11 billion from its private sector arm, the International Finance Corporation and $ 2 billion from its agency. multilateral investment guarantee.

On Wednesday, US Treasury Secretary Steven Mnuchin warned the World Bank to manage its financial resources “wisely and transparently.” He said the bank should prioritize funds for poor countries with the greatest needs, and not those with solid access to market finance, “so as not to overburden shareholders with premature calls for money. new funding, ”Mnuchin said.

World Bank shareholders approved a $ 13 billion capital increase in 2018 that forced the bank to stop lending to richer middle-income countries, like China, in order to shift resources to the richest countries. needy.

The Development Committee, made up of 25 finance ministers and central bank governors representing major World Bank and IMF shareholder countries, including Mnuchin, said the World Bank and other multilateral development banks should “explore additional COVID-19 emergency funding proposals “for the poorest countries.

Reporting by David Lawder; Editing by Marguerita Choy and Daniel Wallis