Realizing the Crisis Preparedness and Response Ambition of IDA20
by Colin Bruce, Special Envoy, Humanitarian and Development Affairs at International Committee of the Red Cross - ICRC and Daniel Clarke, Director, Centre for Disaster Protection [1]
Covid-19 in Madagascar. Credit: iAko Randrianarivelo / IFRC
Covid-19 has been a stark reminder that ending extreme poverty requires protecting gains during crises as much as making progress during better times. Thus we welcome the announcement in April that as the World Bank raises funds for IDA20, supporting countries to prepare for crises will be a major cross-cutting emphasis.
For years, the World Bank has played a leadership role in financing crisis response and covid-19 is no exception; during the first year of responding to covid-19, the World Bank provided 32% of all multilateral funding to IDA countries [2]. Preliminary data suggest two areas for strengthening. First, disbursement rates appeared to be slower than other multilateral agencies: in IDA countries it disbursed 19% of committed resources in the first four months of the crisis compared to 59% by the Asian Development Bank and 32% through the United Nations system. Delays such as this will likely carry a significant cost in development gain. Second, the worst hit IDA countries received $13 per capita in World Bank funding compared to $40 per capita for IDA countries with lower poverty impacts.
Below are some ideas on how IDA20 could work to support crisis preparedness and faster response in the poorest countries.
First, preparedness will require targeted investments
It can be hard for low-income country governments to prioritize spending on the crisis that may occur tomorrow rather than the pressing need of today. It is also difficult to clearly identify a uniform set of investments that will best prepare a country’s systems for response. In some countries investing in preparedness will require building safety net systems, in others it will require regulatory reforms to facilitate coverage of mobile money systems. Leo Martinez-Diaz and Lauren Sidner’s list of potential preparedness priorities, for example, includes investments in early warning systems, disaster planning and regulatory reforms.
A further complication is that health security preparedness indices such as the Ready Score, the Global Health Security Index or the INFORM Epidemic GRI—which variously track indicators such as the robustness of health systems, the ability to detect and respond to epidemics, and compliance with international health regulations norms—were poor predictors of country response to covid-19. In part this was because of the difficulty of identifying one set of investments relevant across all countries to better prepare a country for crisis response. Countries that had the highest scores in the Global Health Security Index (the United States and the United Kingdom) recorded some of the highest deaths per capita initially, compared to other countries that had lower ranks (such as Vietnam). Countries with the same rank had vastly different experiences during the pandemic (Thailand and Sweden).
The World Bank, which invests heavily in analytic tools and processes to prepare multiyear country strategies, is well placed to ensure that there is sufficient attention to identifying and prioritizing suitable investments in specific contexts during IDA20. New Country Partnership Frameworks agreed under IDA20 should identify priority investments in preparedness. This would require that the documents that typically support the strategy formulation processes - Country Economic Memorandums, Poverty Assessments, and Systematic Country Diagnostics - more thoroughly identify crisis risks, constraints to better crisis response, and priorities for effective crises response, including better delivery systems. And perhaps even the Country Policy and institutional Assessments, which form part of IDA’s funding allocation formula, could be updated to reflect the importance of countries being prepared to mitigate and respond to tomorrow’s potential crises.
Second, we would encourage a re-examination of the amount of crisis-response funds pre-allocated for IDA countries
Doing all or most of the planning after a crisis hits usually results in financing that is not fast enough, however quickly government and World Bank staff work. Preliminary analysis suggests that the only instruments that disbursed in April 2020 when households had already lost their incomes were Development Policy Loans with a Catastrophe Deferred Drawdown Option which had been costed and approved prior to the crisis. Often the Crisis Response Window (CRW) finances new projects which are prepared once a country is in crisis. This may explain why, over review of the decade leading up to covid-19, it took an average of 398 days from the disaster happening to the first dollar flowing from the CRW.
Clearly, not all crises can be predicted, but many can. And for these some prior preparation of the response makes sense. IDA19 helpfully introduced the ability for the CRW to pre-approve funds for predictable crises. Ideally more funds would be pre-arranged in this way [3]. Holding back resources for crises that may not occur has a high opportunity cost, so this will require some technical work to get the balance right: it requires good risk surveillance to manage IDA portfolio risk to an acceptable level.
Third, we suggest that the most vulnerable IDA countries be selected for focused support to build a coherent approach to crisis response across actors
The current crisis finance architecture is fragmented with financing being provided by many different actors and different frameworks and global targets for different types of risk. If the architecture remains like this, effective risk management at the country level will require effectively utilizing financing and meeting conditions from multiple institutions. Support to selected countries can include a commitment to joint planning and also increased access to finance for crisis response.
Fourth, because pandemic risks anywhere potentially affected people everywhere, crisis response efforts should ensure that no one is left behind, not even those that are hardest to reach
These include communities who are on the edges of conflict lines (preliminarily estimated at nearly 70 million) or represent marginalized groups without access to essential basic services from governments. Reaching such constituencies is critical to preventing humanitarian and development reversals, and to solving certain problems, like COVID vaccination, where the global response requires addressing the needs of all communities. This is in line with the people-centered spirit of the WB’s Fragility, Conflict and Violence Strategy. Ideally, Governments would provide essential services to all the population and it is important to acknowledge and safeguard this responsibility. However, if they cannot, we encourage IDA to forge partnerships that would extend its reach into such communities.
Footnotes
[1] The ordering of author names was randomised. Colin Bruce and Daniel Clarke are former World Bank officials who remain very strong supporters of IDA and urge an ambitious replenishment. From their current roles at the International Committee of the Red Cross and the Centre for Disaster Protection respectively, they also see opportunities for IDA to build on its admirable track record of leadership and innovation.
[2] Multilateral funding includes World Bank, IMF, all UN funding for covid response and regional banks (ADB, AfDB, IADB, EBRD, Islamic Development Bank). Per capita analysis excludes Tonga.
[3] Another option would be to agree to use risk-transfer instruments to manage this risk, but we are assuming there is little appetite for this in the World Bank at present.