International Financial Institutions’ Covid-19 Approvals Decline Even as G20 Leaders Call for Additional Support

November 24, 2020

The CSIS Economics Program is tracking commitments, approvals, and disbursements by major international financial institutions (IFIs) to meet the massive financing needs generated by the Covid-19 pandemic and its economic fallout. These IFIs include the International Monetary Fund (IMF), World Bank Group, and major regional development banks. We also include select regional financing arrangements (RFAs), which, together with the IFIs, central bank bilateral swap lines, and individual countries’ foreign reserve holdings, comprise the Global Financial Safety Net (GFSN).

Based on data updated through November 16:

1. The pace of new financing approvals has slowed across institutions. In October, the IFIs in our dataset collectively approved $7.4 billion in Covid-19-related support, the lowest monthly approval output since the beginning of the pandemic. Through the first two weeks of November, IFIs approved only $1.9 billion in new support. This drop is particularly steep when compared with September approval levels, when IFIs approved $23.1 billion in new funding. Since our October 19 update, the IMF has approved $589 million in new support. Multilateral development banks (MDBs) approved $5.6 billion in new funding since our last update, led by the European Investment Bank (EIB) and the World Bank Group, which approved $2.9 billion and $1.7 billion in new support, respectively. RFAs have approved no new funding since our October 19 update.

2. We estimate IFIs have approved $213.5 billion in Covid-19-related support since January 27, an increase of $6.2 billion since our last update on October 19. The IMF has approved $102.1 billion, including emergency assistance and precautionary lines of credit. MDBs have approved a combined $109.6 billion, and RFAs have approved a combined $1.8 billion.

3. The EIB approved €400 million ($474 million) in funding for the international COVAX facility. The new funding will ensure “fair and equitable access to successful Covid-19 vaccines in Africa” and scale up vaccine manufacturing in 92 developing and emerging economies. The EIB’s announcement was the only major effort focused on the purchase and distribution of Covid-19 vaccines since our last update, when the World Bank approved a $12 billion financing envelope for developing countries to purchase and distribute a Covid-19 vaccine.

4. Financial support to low-income countries increased relative to overall funding since our last update. Using income classifications from the World Bank, we estimate IFIs in our dataset have collectively approved $550 million to low-income countries since our last update on October 19, accounting for 8.9 percent of total approved funding over this period. In total, low-income countries have received $10.7 billion from the IFIs and RFAs in our dataset, accounting for 5 percent of total approved funding.

5. G20 leaders called on MDBs to “do more” to strengthen financial support for countries’ access to COVID-19 tools. They also reiterated their commitment to implementing the Debt Service Suspension Initiative (DSSI) and encouraged the MDBs to “go further on their collective efforts . . . including through providing net positive flows to DSSI-eligible countries.” G20 leaders also endorsed the Common Framework for Debt Treatments beyond the DSSI, which calls for bilateral creditor coordination and comparable treatment of private creditors in meeting the financing needs of low-income countries.

This analysis is based on IFI press releases along with additional information as provided by the institutions; any corrections and/or clarifications will be included in future updates. Our dataset of IFI responses is available for download here. Our previous analyses of IFI responses are available here.

CSIS methodology for estimating disbursements assumes full disbursement of emergency financing instruments as indicated by the financing institutions themselves. In the case of IMF and RFA lending, disbursements are based on press releases and correspond to actual disbursement schedules. However, disbursement schedules from other official sources, including many MDB operations, are often not included in public press announcements. For purposes of the attached data file, we assume full disbursement of such operations. This treatment, however, is likely to result in an overestimation of MDB disbursements. Starting with the October 2020 update, we report only headline approvals in the summary.

MDBs include the African Development Bank (AfDB), Asian Development Bank (AsDB), Asian Infrastructure Investment Bank (AIIB), European Bank for Reconstruction and Development (EBRD), European Investment Bank (EIB), Inter-American Development Bank Group (IADB), Islamic Development Bank (IsDB), Development Bank of Latin America (CAF), New Development Bank (BRICS Bank), and the World Bank Group (WB). RFAs include the Arab Monetary Fund (AMF), Chiang Mai Initiative Multilateralization (CMIM), Eurasian Fund for Stabilization and Development (EFSD), European Stability Mechanism (ESM), and Latin American Reserve Fund (FLAR). Country income group classifications reflect World Bank categories. The World Bank’s $12 billion financing envelope for Covid-19 vaccines is not included in our dataset as approved funding; we will add individual programs under this envelope as they are announced.

Stephanie Segal is a senior fellow with the Economics Program at the Center for Strategic and International Studies (CSIS) in Washington, D.C. Joshua Henderson is a research intern with the CSIS Economics Program.

Commentary is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).

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