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Speeches & Transcripts September 8, 2020

Meeting of the Ministers of Finance on Financing the 2030 Agenda for Sustainable Development in the Era of COVID-19 and Beyond

Deputy Prime Minister of Canada Chrystia Freeland,

Finance Minister of Jamaica Nigel Clarke,

Deputy Secretary-General Amina Mohammed,

Excellencies,

Ladies and gentlemen,

It’s a pleasure to be here today representing the World Bank Group.

 

Financing for Development is one of the key challenges we are facing today – to make sure we have the means to realize the sustainable development goals and to combat decisively COVID-19.

I’m very pleased to report to you that in the next couple of weeks, the World Bank will reach the symbolically important mark of 2 trillion dollars in 2020 prices that it has provided in terms of development finance over the last 75 years.

This journey started with the first post-war loan to France and has extended to today. Most notably, we’ve committed over 6.6 billion dollars since April as part of our COVID-19 health response – and over 40 percent has already disbursed.  

What this shows is that we need to be in it for the long haul, we need to be persistent, and we need to keep a sharp focus on what matters most, namely results, especially in poverty reduction and human and sustainable development.

It is important that enough resources be mobilized – domestically by the countries and by the international community. Over the last couple of years, we have shown that with financial innovation and effective financial policies we can stretch our balance sheets. For example, with the most far-reaching innovations we introduced into the International Development Association (IDA) finances since 1960, we have been able to increase available IDA resources in IDA18 by 50 percent or $25 billion. And we succeeded to do the same in IDA19.

The extra resources generated through IDA and the IBRD capital increase have allowed the World Bank to increase by 75 percent - or more than $11 billion annually - our combined three-year average financial support for climate change, education, and health, in comparison to the three years before. And we continue to step-up our commitments, especially in climate change.

With the successful implementation of our COVID-19 health operations, we are now actively exploring how we can support the vaccination campaign, including financing for vaccines as needed.  In this context, we have good experiences in the past with supporting large-scale health-related campaigns, benefitting tens of millions of people.

The Bank will continue to work with the international community where the SDGs provide a powerful framework and our financing is very much aligned.   

COVID will set us back with making progress toward the SDGs. Our estimates show that the pandemic could push over 100 million people into extreme poverty and is contributing to rising inequalities throughout the world.

The time for urgent action is now.  Last fiscal year the World Bank had its largest lending program ever – at $59 billion.  The IFC, our private sector arm, complemented this with a combined delivery of $28.5 billion in long-term and short-term commitments.

We also had a record year of disbursements, of over $41 billion ($21.2 billion IDA).

And we are scaling up - for this fiscal year ending July 2021, our ambition at the World Bank is to provide $70 to 80 billion dollars in financing to developing countries.

Our focus is on net positive transfers on highly concessional terms to client countries, which in FY21 means that for every $1 in debt service, the World Bank would provide $11 in new commitments to IDA eligible countries. For small island developing states, the World Bank has committed around one billion for FY21, 10 times their projected debt service payments.

I mention this as debt issues have been discussed extensively in the discussion groups of this Financing for Development Initiative   We are urging the G20 to extend the DSSI moratorium until December 2021 and we continue to call on the private sector and all G20 non-Paris Club creditors to fully join the DSSI as well.

The WB is working with the IMF on the implementation and monitoring of the DSSI to make sure that the savings go to critical investments. Debt transparency must be a priority here, notably as regards terms, any collateral that has been restricted, and non-disclosure clauses that burden sovereign contracts.

Excellencies, we welcome the efforts made by the UN, Canada, Jamaica, and so many others in organizing the FFD initiative.  A concrete example of a successful implementation of the FFD agenda is IDA.

IDA’s ability to attract capital markets at low rates, in its new hybrid finance model, rests on the commitment of donors and the strong payment record of borrowers.  By providing 50% more financing to IDA’s clients, and at more concessional terms [(IDA’s financing is now 20% pure grant giving!)], we can provide the largest net transfers to our clients, as they most need in this time of crisis.   

Now is the time for fast and coordinated action, working in partnership to help the poorest and most vulnerable countries. The UN plays an important role in these efforts and we are working with several UN agencies to improve country outcomes -most recently in Lebanon reconstruction where the WBG is working closely with the UN and EU. 

We are acting.   But we need to do more.  We need your solidarity and your financial support for the countries who are struggling.  Thank you.

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