The World Bank said Tuesday it would triple its social safety net investments to 12 billion dollars over the next two years to help developing nations weather the global financial crisis.
The World Bank said it was increasing investments in social protection programs in health and education “to protect the most vulnerable people from the worst effects of the global economic crisis.”
The investments will be in the form of loans to governments to finance the creation or the improvement of programs for the poor.
“This lending includes rapid social response programs and conditional cash transfers, where families are granted money transfers in exchange for sending their children to school and for regular medical checkups,” the 185-nation development lender said in a statement.
“Increasing investments in social protection programs have been found to be effective in both stimulating spending and protecting the poor at a relatively low cost, often less than one percent of a country’s gross domestic product (GDP).”
The Washington-based institution cited several successful examples of this type of program, in Brazil and Ethiopia.
The bank noted it had lent in early April 1.5 billion dollars to Mexico to expand Oportunidades (Opportunities), a government program aimed at helping the 25 million people that live in the five million “most vulnerable” households in the country.
The World Bank announced in November that it was going to increase its lending to the developing world over the next three years, through its International Bank for Reconstruction and Development arm (IBRD).
The IBRD focuses on middle income and creditworthy poor countries.
Ahead of Friday’s meeting in Washington of the Group of Seven and Group of 20 finance chiefs, World Bank president Robert Zoellick called on the international community to not forget the impact of the global crisis on the world’s poorest people.
“Most attention in the current crisis has been focused on developed countries where people face the loss of homes, assets and jobs. These are real hardships,” Zoellick said in the statement.
“But people in developing countries have much less cushion: no savings, no insurance, no unemployment benefits, and often no food,” he said.
Under the stepped-up investment in social protection programs, the bank said it would increase its fast-track facility for countries in the throes of the food price crisis to 2.0 billion dollars from 1.2 billion dollars.