The World Bank is preparing a $ 1.5 billion package to support war-torn Ukraine and plans to help developing countries struggling to cope with rising food and energy prices, according to the president of the International Monetary Fund David Malpas Foundation.
Speaking at the Warsaw School of Economics, Malpas said the World Bank was assisting Ukraine in providing critical services, including the payment of health care workers’ salaries, pensions and social programs.
“The World Bank was founded in 1944 to help rebuild Europe after World War II. “As we did then, we will be ready to help Ukraine rebuild when the time comes.”
He also said the package was activated after the International Development Organization (IOA) approved $ 1 billion in aid on Monday, along with a $ 100m payment to neighboring Moldova.
A World Bank spokesman added that in addition to the $ 1 billion in funding from the IOA – the World Bank’s main lending arm – the International Bank for Reconstruction and Development (IBRD) will provide $ 472 million in the form of $ 2 billion.
The plan still needs the full approval of the World Bank’s board in the coming weeks, the spokesman said, adding that the aid would allow Ukraine to continue “essential government services during the war.”
The World Bank predicted on Sunday that the war would reduce Ukraine’s GDP by 45%, as half of the country’s businesses were closed, maritime exports were cut off and much of production was destroyed.
The aid comes in addition to the $ 944 million package of quick disbursement funding approved by the World Bank last month, which also includes contributions from donor countries. This package includes $ 350 million in financial support funding from the DTAA.
Malpas has previously said that the World Bank plans to provide about $ 3 billion in aid to Ukraine in the near future.
He said the World Bank was analyzing the global impact of the war, including rising food and energy prices, and was “preparing an immediate response to the crisis that would provide targeted support to developing countries”. The sharp rise in food prices needs immediate attention, with Malpas adding that for every percentage point increase in food prices, 10 million people are expected to face extreme poverty.
The rich can afford to buy more expensive basic items, but the poor can not, he explained. “Malnutrition is expected to increase and it will be more difficult to reverse its impact on children.”
Top officials from World Bank and International Monetary Fund member states will meet next week in Washington, where the implications of the Russian invasion of Ukraine will be the main topic of discussion, including the expected downgrade of economic growth.
G20 finance ministers and central bankers are expected to hold an “electrified” meeting, which US Treasury Secretary Janet Yellen has threatened to boycott if Russian officials are present.
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