Twenty-seven nations have taken steps since the start of the Iran war to establish crisis instruments that may promptly obtain funds from current World Bank programs.
The countries or the overall amount of money that would be requested were not mentioned in the World Bank memo. The World Bank did not provide a statement.
Three nations have authorized new instruments since the start of the Middle East crisis on February 28, while the others were still finishing the procedure.
Global supply chains have been impacted by the conflict and the ensuing disruption of the world’s energy markets, which have hindered the delivery of essential fertilizer to developing nations.
Kenyan and Iraqi officials have acknowledged that they are looking for quick financial assistance from the World Bank to deal with the aftermath of the conflict, which includes a sharp decline in Iraq’s oil revenue and rising fuel prices that are affecting African countries.
The Rapid Response Option, which permits nations to use up to 10% of their undisbursed funds, was signed by 54 of the 101 nations that have access to some kind of pre-arranged finance mechanism that they could use in a crisis.
Last month, World Bank President Ajay Banga stated that the bank’s crisis toolbox will enable nations to access an estimated $20 billion to $25 billion through pre-arranged contingency financing, current project balances, and fast-disbursing instruments.
According to him, the bank might also realign some of its holdings to raise the total to $60 billion within six months. Longer-term adjustments could raise the amount to almost $100 billion.
Kristalina Georgieva, the chief of the International Monetary Fund, stated at the time that she anticipated up to a dozen nations requesting $20 billion to $50 billion in short-term aid from the international lender.
However, very few requests have been recorded. Countries are definitely in a wait-and-see mode.
According to Kevin Gallagher, director of Boston University’s Global Development Policy Center, nations are more inclined to look for World Bank funding than engage in negotiations with the IMF because IMF programs typically call for austerity measures that could exacerbate the social unrest already present in nations like Kenya.
