Contacts in Washington, DC:
WASHINGTON, 5 July, 2010 — As developing countries began to emerge from the effects of the global economic crisis, the World Bank Group increased its support to the poorest countries of the East Asia and Pacific region in fiscal year 2010.
Commitments from the International Development Association (IDA), which provides interest-free credits and grants to the lowest-income countries, increased from $1.2 billion in FY09 to more than $1.65 billion in 2010. At the same time the International Bank for Reconstruction and Development (IBRD), which provides financing, risk management products, and other financial services to middle-income countries, delivered $US5.9 billion of support in FY10.
World Bank Group Commitments
Fiscal years 2010 and 2009
(year ends June 30)
|World Bank Group|
|* Preliminary data|
Together, the two institutions financed some 55 new projects in the fiscal year—ranging from a $785 million loan to Indonesia to extend the reach of a highly successful community empowerment program in rural areas—to a $3.2 million IDA credit to the Solomon Islands which is being used to provide employment and training opportunities, especially for urban youth.
The Bank Group’s lending and grant finance to the region, at around $8.9 billion in FY10, almost matched the record levels reached during the crisis in FY09 and, according to World Bank Vice President for the East Asia and Pacific Region, Jim Adams, this reflects the continuing demand for the Bank’s support in addressing the mix of development challenges across the region.
“For many countries in the region, the crisis slowed the pace of poverty reduction and contributed to increased unemployment in some cases,” Jim Adams said. “The crisis highlighted the need for countries to protect core spending, strengthen safety nets for the poor, improve service delivery and move toward a greener growth path. I am pleased that the Bank Group was able to combine its global knowledge with financing to support countries with these major challenges.”
As the largest provider of multilateral financing for the private sector in the developing world, the Bank Group’s private sector arm—the International Finance Corporation (IFC)—also increased its support to help boost private sector-led recovery. In FY2010, preliminary results are that IFC committed $1.54 billion in new business in 57 projects, the second highest total reached for IFC in the East Asia and Pacific and a 40 percent increase from FY2009. It committed a record amount, $236 million, in the Pacific Islands sub-region including Papua New Guinea. Of this commitment volume, 40 percent is in IDA countries, and another 18 percent is in frontier regions of Middle Income Countries.
Karin Finkelston, IFC’s Director for East Asia and Pacific, said, “To help the region consolidate its recovery from the global economic crisis, we focused our efforts on the poorest and most vulnerable countries. We are pleased that we were able to increase our financial commitments to IDA countries to nearly $622 million from around $400 million in 2009, and our commitments to financing micro, small and medium enterprises to nearly $600 million.”
In fiscal year 2010, the Multilateral Investment Guarantee Agency (MIGA) provided $24 million in guarantees to support infrastructure investments in China.
MIGA also signed agreements with three East Asian organizations to promote private sector investment: Korea’s Eximbank, Japan’s Nippon Export and Investment Insurance (NEXI), and the Japan Bank for International Cooperation (JBIC)—the international arm of Japan Finance Corporation.
“In addition to continuing to support investment into the region, we are also stepping up our efforts to help investors from Asia access the risk-mitigation tools they need to invest in developmentally beneficial projects across borders,” notes MIGA’s Executive Vice President, Izumi Kobayashi.