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Speeches & Transcripts May 13, 2020

Remarks by Axel van Trotsenburg Managing Director, Operations: Conflict and the Pandemic – Tackling COVID-19 in Fragile Settings (a US Institute of Peace and World Bank Event)

Axel van Trotsenburg, Managing Director, Operations, The World Bank

As Prepared for Delivery

 

Supporting countries impacted by fragility, conflict and violence is at the core of the World Bank Group’s mission. This is even more urgent today given the impacts posed by the COVID-19 crisis. 

The crisis, and its unfolding secondary effects, poses significant and potentially lasting challenges for countries impacted by fragility, conflict and violence (FCV).

These countries already face significant risks – such as situations of active conflict and forced displacement shocks – and COVID-19 threatens to intensify these existing sources of fragility.  It can ultimately reverse hard-won development gains and progress towards our mission to end extreme poverty and achieve the Sustainable Development Goals.

In addition to the health impacts of the pandemic, countries are also grappling with its effects on the economy, on poverty, and on peace and stability.

The pandemic is putting increased pressure on already weak and under-resourced health systems.  For example, in fragile and conflict-affected countries, government health expenditures account for a little over 1% of GDP, compared to nearly 6% globally. Vulnerable groups often lack access to health care.  

In fragile contexts – often grappling with crowded slums, refugee camps, or other unstable areas  – there are serious limitations to testing and contact tracing, enforcement of social distancing measures and handwashing in settings with lack of access to clean water.  The capacity of governments to address existing public health challenges is also likely to be seriously compromised, given the pressure COVID-19 is placing on health systems. For example, in the Democratic Republic of Congo (DRC), nearly 3 times as many people died from measles than Ebola between 2018 and 2020.

From an economic perspective, the compounding shocks of FCV and a global pandemic will likely significantly negatively impact the most fragile economies. Projections signal a loss of 6% of GDP for fragile and conflict-affected countries in 2020, and a protracted downside scenario of a loss of close to 8% of GDP in 2021.

Remittance flows to fragile settings are also expected to decline by 20% in 2020, which will have a significant impact, as they make up an average of 9% of GDP in fragile settings. This number is higher in many countries – for example, remittances make up over 34% of GDP in South Sudan. 

The crisis will have significant impacts on poverty and exclusion, likely pushing an additional 10 million people in fragile and conflict-affected countries into extreme poverty in 2020.  As a result of the crisis, the number of extreme poor in fragile and conflict-affected countries could increase to 308 million in 2020 and to 314 million in 2021.

This increase will be especially acute in Africa, with large fragile and conflict-affected countries such as Nigeria and the DRC projected to see the highest numbers of people entering extreme poverty (5 million and 2 million, respectively).

Additionally, COVID-19 risks deepening existing sources of fragility, and exacerbating instability in fragile and conflict-affected settings. The crisis could fracture the social contract in situations where governments are unable to respond effectively to the public health and economic crises, and where containment measures adopted to curtail the spread of the virus are perceived to restrict civil and political liberties.  We are also seeing sharp increases of gender-based violence, as well as reports of violence and xenophobia against vulnerable groups like refugees and IDPs.

The macro-economic contraction and uneven responses by the state could also reinforce inequalities, and fuel exclusion and grievances by diverting scarce development resources – for example from one part of the country to focus on crisis response in another.  And in some cases, violent extremist groups have begun to take advantage of the ‘window of opportunity’ presented by the crisis.

In response to the unfolding crisis, the World Bank Group has acted fast to help developing countries – including the most fragile countries – strengthen their pandemic response and health care systems.

Over the next 15 months, the World Bank Group will be providing up to $160 billion in financing tailored to the health, economic and social shocks countries are facing, including $50 billion of IDA resources on grant and highly concessional terms.  By the end of June, we will already have committed one-third of the IBRD/IDA part of this $160 billion.

Our emergency health response to COVID19 is the fastest and largest crisis response in the World Bank’s history. To date, 59 health projects have been approved, with a total commitment of $3 billion, with one third of approved projects in 20 fragile and conflict-affected countries.  We will soon have health-related emergency financing in 100 countries.

A recent example includes Afghanistan, where the World Bank has put together a $100 million program to help slow and limit the spread of COVID-19 through enhanced detection, surveillance, and laboratory systems, as well as strengthened healthcare delivery and intensive care. And in Haiti, we are investing $20 million to support detection, infection control in health facilities, and access to health care, as well as to support communications activities to help community members understand what they can do to prevent spread and counter misinformation.

Our support has been fully aligned with the World Bank Group’s recently released FCV Strategy. The strategy highlights the importance of investing in prevention, engaging in crisis situations, strengthening and protecting human capital, and strengthening partnerships with other organizations to deliver in insecure and challenging settings.  We are tailoring our health, economic and social interventions in fragile settings in three key ways:

First, we are designing response and recovery interventions in an FCV-sensitive manner. Drawing on our experience responding to the Ebola crisis, we are ensuring that strengthened engagement with local communities is an essential part of response efforts. This is critical to overcome distrust, design tailored interventions, and gain buy-in of the community.

In DRC, we are focusing on supporting community engagement and rebuilding citizen trust as part of a $47 million program that aims to provide immediate support to implement containment strategies, train medical personnel, and distribute equipment to ensure rapid testing of potential cases and contact tracing.

Second, responses must be inclusive, and protect the human capital of the most vulnerable groups that are disproportionally affected by the crisis.   This is why our emergency response operations include support to refugees and forcibly displaced populations.  In Lebanon ($40 million), Chad ($17 million) and Burkina Faso ($21 million) we are strengthening the government’s capacity to respond to the crisis, including by supporting refugees, internally displaced people, and affected host communities.

In addition, we are addressing the significant impacts on food security. The WFP has warned of the emergence of an unprecedented crisis, with the number of food insecure doubling to 265 million people in 2020 due to the COVID-19 crisis. In countries impacted by existing shocks – such as the desert locust outbreak – we could see the emergence of a crisis within a crisis.  In Somalia we are finalizing a program to support the  support the recovery of livelihoods and infrastructure in flood and drought affected areas, and build long-term resilience to COVID-19 and the locust outbreak.

Third, partnerships are essential to maximize the impact of our collective support. Close coordination with a diverse range of actors, including humanitarian and civil society organizations that continue to operate on the ground, are critical to our response and recovery efforts in fragile contexts.

In Yemen, a $27 million IDA grant is being implemented in partnership with the WHO to help limit the spread and mitigate risks associated with COVID-19. We are also closely working with partners to see how we can leverage our respective comparative advantages – whether it is sharing data with OCHA to inform early warning systems and prevention-focused interventions; working with the ICRC to support the most vulnerable groups; or harnessing the logistical capacity of WFP to help deliver support in the most difficult environments.

As we look towards the longer-term recovery efforts, it is critical to ensure a coordinated effort among humanitarian, development and security partners. Our partnership with the UN and the European Union in post-crisis settings– as well as with other actors such as USIP and the African Development Bank – provides a roadmap on how we can support governments address the impacts of crises, prioritize and sequence recovery efforts, and tackle the root causes of fragility in order to build back better.

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