Context: The World Bank has recently released the Global Economic Prospects report 2020, which highlighted the adverse impact of COVID 19 upon the countries .
Key highlights of the report:
- EMDEs (Emerging Market and Developing Economies) are especially vulnerable.
- The report said EMDEs face health crises, restrictions and external shocks like falling trade, tourism and commodity prices, as well as capital outflows.
- These countries are expected to have a 3-8% output loss in the short term, based on studies of previous pandemics
- Sixty million people could be pushed into extreme poverty this year.
- A recession combined with a financial crisis could lower potential output by almost 8% while, in the average EMDE energy exporter, a recession combined with an oil price plunge could lower potential output by 11%
- The scope and speed with which the COVID-19 pandemic and economic shutdowns have devastated the poor around the world are unprecedented in modern times.
- Policy choices made today will help limit the damage and build a stronger recovery. This includes —
- greater debt transparency to invite new investment,
- faster advances in digital connectivity, and
- a major expansion of cash safety nets for the poor
- Along with addressing health emergencies and securing core public services in the short run, policies to boost long-term growth, such as
- improving the environment for business,
- improving governance, and
- enhancing the outcomes of education and public health investments would be needed
The World Bank Group is one of the world’s largest sources of funding and knowledge for developing countries. Its five institutions share a commitment to reducing poverty, increasing shared prosperity, and promoting sustainable development.
Mission of World Bank group
1. To end extreme poverty: By reducing the share of the global population that lives in extreme poverty to 3 percent by 2030.
2. To promote shared prosperity: By increasing the incomes of the poorest 40 percent of people in every country.
The organizations in the group are,
1. International Bank for Reconstruction and Development (IBRD).
2. International Development Association (IDA).
3. International Finance Corporation (IFC).
4. Multilateral Investment Guarantee Agency (MIGA).
5. International Centre for Settlement of Investment Disputes (ICSID)
IBRD, IFC and IDA are Specialized Agencies of the UN. ICSID and MIGA are not Specialized Agencies.
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