Development banks mobilize funding to cushion war impact
Seven multilateral development banks (MDB), including the World Bank (WB) and Asian Development Bank (ADB), on Monday pledged support for countries grappling with the economic fallout of the Middle East conflict, which has triggered a historic oil shock and stoked global inflation.
In a joint statement, the banks said they were responding to requests for support from countries and clients to help address the “heterogeneous and compound impacts” from the war, including disruptions to energy and fertilizer markets and trade routes.
The ripple effects have fueled inflation and strained food security, employment, fiscal positions, external balances and financing conditions, they said.
Aside from WB and ADB, the statement was also signed by the African Development Bank Group, Council of Europe Development Bank, European Bank for Reconstruction and Development, European Investment Bank and Inter-American Development Bank Group.
The banks said they were “uniquely positioned” to combine financing, policy support, private sector instruments and technical expertise at scale to help countries manage shocks, preserve development gains and strengthen long-term resilience.
With the support of their shareholders, the institutions said they were providing assistance “in line with our respective mandates, strategies and operational models.”
“MDBs’ responses aim to provide immediate relief by supporting the most vulnerable populations and ensuring the continuity of essential services, while continuing to lay the structural foundations for sustainable resilient economies,” they said.
Planned measures include support to preserve access to essential goods such as energy, food and agricultural inputs in economies most exposed to the crisis.
The banks also pledged fast-disbursing budget support for governments facing mounting fiscal pressure, as well as working capital, liquidity and advisory services for companies—including micro, small and medium-size enterprises, utilities and public-sector clients—struggling to absorb market volatility and protect jobs.
They added that they would provide policy advice and technical assistance on targeted, time-bound aid for vulnerable households and hard-hit sectors, alongside investments to strengthen resilience, including diversifying energy sources and improving connectivity.
“In the rapidly changing context vigilant monitoring is key, including of emerging food security risks, to ensure appropriate early warning and coordination of operational responses,” the banks said.
“MDBs will continue to adapt and scale their responses in line with countries’ and clients’ needs,” they added. “MDBs will coordinate closely, and work with governments, development partners, and the private sector to ensure fast, targeted, time-bound, and fiscally sustainable responses.”
