WB introduces Rapid Response Option for unused financing portfolio
THE World Bank has introduced a new Rapid Response Option, which allows countries to quickly repurpose a portion of their unused financing portfolio from the group for emergencies.
This mechanism will help maximise the resources governments already have to meet the urgent needs of their people, such as providing shelter, food, and water, says World Bank Managing Director of Operations. Anna Bjerde.
Critically, Ms Bjerde wrote on her blog, the World Bank would also support governments in advance planning to ensure the swift utilization of crisis response financing.
“These overlapping crises are not only a “new normal” for countries, but also pose an unprecedented threat to poverty reduction and economic development, making it harder for families to put food on the table and cope with worsening natural disasters.
“The past three years have made one thing clear: we can no longer afford to treat crises as surprises. Developing countries need more and better tools to manage the multiplying challenges they face,” she said.
Ms Bjerde stated the World Bank was implementing ambitious reforms to transform the way it supported countries in the current challenging time.
She pointed out that a critical part of this transformation was a new crisis preparedness and response toolkit.
She emphasised that the bank was moving fast to put this toolkit into action, as it was aware that immediate access to funding for emergency response saved lives.
“These tools will help governments better prepare for and respond to crises while facing fewer trade-offs between their development priorities and emergency financing needs,” Ms Bjerde said.
According to Ms Bjerde, the bank was also improving countries’ access to pre-arranged financing, boosting their financial capacity against future shocks.
She noted that countries would have better access to contingent resources and immediate crisis response financing without needing to commit resources that could be used for other development goals.
“Countries can leverage these resources to prepare for natural disasters, health emergencies, and other shocks through two of our existing lending tools: Development Policy Financing and Investment Project Financing.
“Countries will have to undertake crisis preparedness reforms and other institutional strengthening measures to further leverage these new tools, fostering resilience in the long run,” Ms Bjerde said.