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WB commits $53bn for developing countries

ISLAMABAD, June 30: The World Bank has committed nearly $53 billion in loans, grants, equity investments, and guarantees to help promote economic growth, overcome poverty, and promote economic enterprise in developing countries during fiscal year 2012, which ended on June 30, an un-audited report of the bank says.

The bank recently lowered its growth forecast for 2012 to 5.3 per cent for developing countries, down from its January estimate of 5.4 per cent, and noted that developing country budgets and central banks are not as well placed as they were in 2008-09 to address slowing economies. Their ability to respond may be constrained if international finance dries up and global conditions deteriorate sharply, it noted.

As developing countries face strong economic headwinds, the bank supported an estimated 884 operations to promote opportunity and get needed services to the poor – for example, by improving education and health services, promoting the private sector, building infrastructure, and strengthening governance and institutions.

According to preliminary and un-audited numbers as of June 29, IDA commitments in fiscal year 2012 were $14.7 billion, down from $16.3

billion in fiscal year 2011. The largest share of resources was committed to Africa, which received around 50 per cent of total IDA lending in fiscal year 2012, followed by South Asia at around 36 per cent of total.

IBRD commitments totaled $20.6 billion—significantly higher than the historical average ($13.5 billion in fiscal 2005–08), but less than the record $44.2 billion in fiscal 2010, when the crisis peaked. Europe and Central Asia and Latin America and the Caribbean received the largest shares of IBRD lending, each receiving $6.2 billion in new commitments.

New commitments to agriculture and related sectors in fiscal year 2012 are expected to reach $9.1 billion. This exceeds projected lending in the bank’s Agriculture Action Plan, which foresaw an increase in assistance from an average of $4.1 billion annually in fiscal year 2006-08 to $6.2 - $8.3 billion annually in fiscal year 2010-12. Over the life of the Action Plan, assistance averaged $7 billion.

The World Bank continues to engage with countries to improve risk management strategies and offer financial products that can help reduce their vulnerabilities. The volume of risk management transactions executed by the bank on behalf of client countries this year to manage the volatility of currency and interest rates is estimated at $2.5 billion. In addition, the Bank provided advisory services on public debt management to 40 countries, as well as financial products that meet our member countries’ risk management objectives.

IFC, the largest global development institution focused exclusively on the private sector, again provided a record amount of financing to businesses in developing countries—leveraging the power of the private sector to create jobs, spark innovation, and tackle the world’s most pressing development challenges.

Preliminary and un-audited data as of June 28 indicate that IFC investments totaled more than $20 billion, including funds mobilised from other investors. That marked an increase from $18.7 billion in fiscal year 2011.