WASHINGTON: The World Bank is preparing a $1.5 billion support package for war-torn Ukraine and plans to aid developing countries struggling to keep up with surging food and energy prices, World Bank President David Malpass said on Tuesday.
In remarks at the Warsaw School of Economics in Poland, Malpass said the bank was helping Ukraine provide critical services, including paying wages for hospital workers, pensions and social programs.
“The World Bank was created in 1944 to help Europe rebuild after World War Two. As we did then, we will be ready to help Ukraine with reconstruction when the time comes,” Malpass said.
Malpass said the package was enabled by Monday’s approval of $1 billion in International Development Association (IDA) aid by donor and recipient countries, along with a $100 million IDA payment to neighboring Moldova.
The IDA disbursement plan still needs full approval by the World Bank’s board of directors in coming weeks, a World Bank spokesperson said.
Malpass did not specify the source of the additional $500 million for Ukraine.
The aid comes on top of about $923 million in fast-disbursing financing approved by the World Bank last month, which also includes donor country contributions. That package includes $350 million in budget support financing from the World Bank’s main lending arm, the International Bank for Reconstruction and Development (IBRD).
Malpass has previously said the bank was working on about $3 billion in total near-term aid for Ukraine.
He said the World Bank was analyzing global impacts of the war in Ukraine, including the spike in food and energy prices, and is “preparing a surge crisis response that will provide focused support for developing countries.”
The spike in food prices needs immediate attention, with Malpass adding that for every one percentage point increase in food prices, 10 million people are expected to fall into extreme poverty.
“The rich can afford suddenly expensive staples, but the poor cannot. Malnutrition is expected to grow, and its effects will be the hardest to reverse in children.”
Senior economic officials from World Bank and International Monetary Fund member countries will meet in Washington next week, where spillovers from Russia’s invasion of Ukraine will be the dominant topic of discussion, including an expected IMF downgrade of its economic growth outlook.
Russia calls its actions in Ukraine a “special operation.”
Finance ministers and central bank governors from the Group of 20 major economies are expected to hold a potentially contentious meeting, which US Treasury Secretary Janet Yellen has threatened to boycott if Russian officials attend.