IMF-World Bank Spring Meetings to focus on coronavirus pandemic Minister of International Development Dag-Inge Ulstein is taking part in the meeting of the Development Committee (the Joint Ministerial Committee of the Boards of Governors of the World Bank and the IMF) on Friday 17 April. Meetings of the Development Committee are held twice a year. Mr Ulstein is one of 25 Governors representing World Bank members at the meeting, which this time is being held virtually.
‘The World Bank is one of our most important partners in the work to end poverty and promote inclusive sustainable growth. It is only natural that this year’s meeting will focus on the coronavirus pandemic and the Bank’s response,’ Mr Ulstein said.
World Bank is playing a key role in the efforts to counter the serious global economic downturn we are experiencing, and in the first instance has allocated a USD 14 billion package of fast-track financing for efforts to address the coronavirus crisis. This funding will be used to finance both health-related efforts and measures to support vulnerable economies. In the period up to June 2021, the World Bank can mobilise a total of up to USD 160 billion in loans and grants.
‘I am very pleased by how quickly the Bank has taken steps to mitigate the health-related and economic consequences of the coronavirus pandemic. It is the poorest countries that will be hardest hit. In solidarity with these countries, the World Bank must do its part to ensure that they are as well equipped as possible to deal with the pandemic. We must protect those who are most vulnerable, and prevent today’s health crisis from becoming tomorrow’s hunger disaster and social crisis,’ Mr Ulstein said.
Many of the world’s poor countries have accumulated high levels of debt and do not have the economic room for manoeuvre or the resources they need to respond to the pandemic. Norway therefore supports the proposal to introduce a debt moratorium for the world’s 76 poorest countries, as agreed by the Paris Club creditor countries and the G20.
‘Norway supports a shared endeavour to give the poorest countries debt service relief for both interest and principal payments. This will enable them to free up resources they can use to fight the coronavirus outbreak. We are also pleased that the World Bank is considering whether it should take part in the debt moratorium. But there is not much point in it doing so if this will affect the Bank’s creditworthiness and/or its ability to provide much-needed assistance to poor countries,’ Mr Ulstein said.
Norway is also considering contributing to the IMF’s Catastrophe Containment and Relief Trust, which is providing debt relief for the poorest countries by covering debt service payments to the IMF for the period when these countries are dealing with the pandemic.
At the meeting of the Development Committee, Mr Ulstein will give an address on behalf of the Nordic and Baltic countries. In addition to the response to the coronavirus pandemic, he will focus on debt relief, climate change, gender equality and countries affected by conflict and fragility.
‘In my address, I will, on behalf of the Nordic and Baltic countries, express disappointment that the draft communiqué from the meeting does not go nearly far enough regarding the need to combat climate change. We consider it an absolute requirement for the World Bank to maintain its strong engagement in this area, including its engagement in climate finance for adaptation measures,’ Mr Ulstein said.
Norway and the World Bank Group
Norway provides approximately NOK 3.1 billion a year towards the World Bank’s efforts to fight poverty and promote development. Of this sum, nearly NOK 1 billion goes to the International Development Association (IDA), which provides assistance to the world’s 76 poorest countries. IDA is by far the largest single channel for multilateral aid to these countries. IDA provides heavily subsidised loans to low-income countries, and grants to the most indebted of these countries. For every dollar the donors give to IDA, IDA provides three dollars to the poorest countries. Around two-thirds of the funding provided by IDA goes to African countries. For the next three-year period, IDA will give priority to efforts in the following areas: climate change, women’s rights and gender equality, private sector development and job creation, support for countries and regions affected by conflict and fragility, and financial governance.
For the next four-year period, Norway will also provide fresh equity capital to the Bank, following agreements on capital increases in the International Bank for Reconstruction and Development (IBRD) (the part of the Bank that provides loans to middle-income countries) and the International Finance Corporation (IFC), (which provides loans and investment capital to the private sector in both low- and middle-income countries).