WASHINGTON DC / DEVELOPMENT ASISTANCE

The World Bank Group in its fiscal year 2010 has committed a record level of assistance to developing countries in the face of fragile economic recovery.

The commitment of more than $72 billion, supports an estimated 875 projects to promote economic growth, overcome poverty, and promote private enterprise, with record commitments in education, health, nutrition, population, and infrastructure providing much-needed investments in crisis-hit economies.

SOUNDBITE (English) Ngozi N. Okonjo-Iweala, Managing Director World Bank:
“The world has gone through a large number of crisis recently, the food crisis, the fuel crisis and the financial crisis and as an institution we have had to respond in a fast, flexible and innovative way and we’ve had to take care and make sure that children stay in school and that mothers and children have access to health care, we have had to work with governments to make sure roads are maintained, the private sector to make sure they keep supporting people with micro enterprises, and small women entrepreneurs.”

This assistance was provided in loans, grants, equity investments and guarantees to help countries and private businesses contending with significantly diminished private capital flows in the wake of the global downturn. Private flows are forecast to recover only modestly from $454 billion in 2009 to $771 billion by 2012, still far below the $1.2 trillion in 2007. Overall, the financing gap of developing countries is projected to be $210 billion in 2010, declining to $180 billion in 2011, down from an estimated $352 billion in 2009.

SOUNDBITE (English) Ngozi N. Okonjo-Iweala, Managing Director World Bank:
“What we have been looking for is how to help the countries and the people, have impact and results on the ground. The record lending that we have done and accompanying record disbursements for the World Bank group have helped that these results actually happen in the poorest countries in the world and in the emerging markets.”

World Bank (IBRD and IDA) commitments for social protection, including safety net programs for the poorest and most vulnerable, are estimated to reach at least $3.6 billion in FY10. Financing for infrastructure, a critical sector for job creation and future productivity, surpassed FY09’s $18 billion, and is estimated to reach more than $22 billion in FY10. FY10 also saw education commitments at an all-time high of around $4.5 billion, up from $3.4 billion in FY09; and record support for health, nutrition and population, which is estimated at $4 billion, up significantly from $2.9 billion last year.

As the institution made these unprecedented commitments, with total FY09/10 Bank Group commitments at over $130 billion, the IBRD faced capital constraints, and shareholders agreed in April 2010 to the first major capital increase in 20 years.