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CGD Policy Blogs

 

Stacks of US dollars. Adobe Stock

More Than $1 Trillion in MDB Firepower Exists as We Approach a COVID-19 “Break the Glass” Moment

In retrospect, the scale up in MDB financing during the 2008-2010 crisis, though significant, now looks conservative as we consider the potential scale of damage from the current COVID-19 pandemic. To put the question bluntly, if the human and economic devastation follows a worst-case scenario, just how much could the MDBs do to respond? We attempt to answer that question by assessing the legal, rather than prudential, constraints on MDB lending.

A worker at a power station in Kabul. Photo by Graham Crouch, World Bank

5 Principles on the Uses and Misuses of Debt Relief to Address the Coronavirus Pandemic

Debt relief for low-income countries is on the table of measures to consider for coronavirus response. The imperative right now is to get cash to LICs as quickly as possible. Suspending some debt service payments may be a good first step in freeing up some budget space for new spending. Beyond that, protracted debt-relief negotiations with multilateral and commercial creditors right now could be a distraction at best but could also actively undermine the ability of institutions like the World Bank to offer new financing for crisis response.

US Capitol Building

Letter to Pelosi and McConnell: Recommendations for Coronavirus Emergency Legislation

Yesterday we sent the following letter to U.S. Representative Nancy Pelosi (D-Calif.), the House Speaker, and U.S. Sen. Mitch McConnell (R-Ky.), the Senate Majority Leader, outlining measures that could be included in upcoming Congressional emergency legislation related to combating the coronavirus in developing countries. The text of the letter follows:

Dear Speaker Pelosi and Senator McConnell:

World Bank and COVID-19: Five Unanswered Questions on Funding Sources and Uses

Yesterday the World Bank announced $12 billion in financing available to member countries to respond to the health and economic impacts of the COVID-19 outbreak. There is not much information yet in the public domain on the sources and planned uses for this money, but five questions – each with additional corresponding questions – come to mind when reading the press release:

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