Overview
- An internal World Bank document obtained by Reuters shows 27 countries have started processes to access pre-arranged crisis financing since the Iran war began on February 28, with three countries having fully approved new instruments so far.
- The moves use the World Bank’s Crisis Preparedness and Response Toolkit, including the Rapid Response Option that lets enrolled states tap up to 10% of undisbursed project balances for fast funding.
- World Bank President Ajay Banga has said the toolkit can free about $20 billion to $25 billion quickly and could be reoriented to reach roughly $60 billion over six months and about $100 billion over a longer period.
- Officials in Kenya and Iraq have confirmed they are seeking World Bank support to cope with surging fuel costs and falling oil revenue, while many other countries remain cautious and have logged few formal requests.
- Policymakers prefer World Bank contingent tools to IMF programs because they provide speed and avoid IMF-style conditionality that could force austerity and risk deepening social unrest, with potential effects on food prices, transport costs, and public stability.