WASHINGTON, Mar 26, CMC – The Inter-American Development Bank (IDB) and IDB Invest say they have agreed with governments on the priority areas for deploying the financial and technical resources being made available to borrowing member countries and companies to address the crisis created by COVID-19, the disease caused by the coronavirus.
They said that based on extensive dialogue with the governments and technical analysis by IDB specialists, the financial institutions will concentrate its support in four areas including the Immediate Public Health Response: Support for countries’ preparedness and response capacities to help contain the transmission of the virus and mitigate its impact, with resources to strengthen public healthcare systems and purchase supplies and equipment.
They have also agreed on safety nets for vulnerable populations with “measures to protect the income of the most affected populations through existing transfer programs, non-contributory pensions and grants.
“Other proposed measures include extraordinary transfers to workers in the informal sector and support for companies in sectors particularly affected by the crisis, such as tourism.”
The financial institutions said that assistance to small medium enterprises (SMEs), which account for 70 per cent of the region’s jobs, through financing programmes and short-term liquidity guarantees, foreign-trade financing and guarantees, loan restructuring, and support for strategic supply chains.
They are also advocating support to countries in designing and implementing policies in three key areas: fiscal measures to finance the response to the crisis; continuity plans for the execution of expenditures and public procurement; and measures to support economic recovery.
“We are immediately reprogramming resources to help with this health emergency,” said IDB President Luis Alberto Moreno.
“However, the historic dimensions of the crisis require a multisectoral strategy that anticipates the social and economic impact over the medium and long term. These lines of action reflect the priorities of our governments and the deep knowledge that our specialists bring to bear on the specific challenges facing each of our countries.”
Since the end of January, the IDB Group said it has increased the availability of funds and adjusted lending instruments to streamline support for countries affected by the virus.
The Washington-based financial institution said that it has also established learning and exchange platforms to help make its technical knowledge available to the region and facilitate dialogue with international organizations and governments that are collaborating to combat the pandemic.
“In addition to reprogramming its existing portfolio of health projects to address the crisis, the IDB can direct US$3.2 billion more to the lending programme initially stipulated for 2020. These funds, added to the available resources already programmed for this year, would make up to US$12 billion available to countries for the purpose of responding to the health crisis and its consequences,” the IDB said.
It said that governments can also request the redirection of resources from projects in execution in other sectors to meet needs related to the virus. These resources could total up to US$1.35 billion.
IDB Invest, the private sector institution of the IDB Group, will contribute up to five billion US dollars to these efforts in 2020.
Of that total, US$4.5 billion will come from its investment programme, focusing on companies impacted by the crisis. Additionally, IDB Invest is working on a new $500-million Crisis Mitigation Facility targeting investments that provide a direct response to the pandemic through health and health-related sectors and access to short-term lending for small and medium-sized enterprises through financial institutions and supply chain finance.
In addition to these efforts, the IDB Group said it is exploring options to streamline fiduciary processes and timeframes for approving operations in order to maximize and accelerate its support for the region at this critical time.