The Asian Development Bank (ADB) on Wednesday announced a $6.5 billion initial package to address the immediate needs of its developing member countries (DMCs) as they respond to the novel coronavirus (COVID-19) pandemic.
"This pandemic has become a major global crisis. It requires forceful action at national, regional, and global levels,” said ADB President Masatsugu Asakawa, reports UNB.
“With our developing member countries, we are formulating an aggressive set of actions to combat the pandemic; to protect the poor, the vulnerable, and wider populations across the region; and to ensure economies will rebound as swiftly as possible. Based on close dialogue with our members and peer institutions, we are deploying this $6.5 billion rescue package to meet the immediate needs of our members," he said.
Asawaka stressed that ADB stands ready to provide further financial assistance and policy advice down the road whenever the situation warrants, on top of the $6.5 billion package.
The initial package includes approximately $3.6 billion in sovereign operations for a range of responses to the health and economic consequences of the pandemic, and $1.6 billion in nonsovereign operations for micro, small, and medium-sized enterprises, domestic and regional trade, and firms directly impacted.
ADB will also mobilise about $1 billion in concessional resources through reallocations from ongoing projects and assessing possible needs for contingencies.
ADB will make available $40 million in technical assistance and quick-disbursing grants.
To provide the support package to DMCs as quickly and flexibly as possible, ADB will seek adjustment in its financing instruments and business processes.
Subject to approval by ADB’s Board of Directors, this will include faster access to emergency budget support for economies facing severe fiscal constraints, streamlined procedures for policy-based lending, and universal procurement with flexible and faster processes.
The pandemic demands a coordinated response and strong collaboration among countries and organisations.
ADB will further strengthen its close collaboration with the International Monetary Fund, the World Bank, regional development banks, the World Health Organization, and major bilateral funding agencies including the Japan International Cooperation Agency, as well as the US Centers for Disease Control and private sector organisations, to ensure effective implementation of its COVID-19 response.
Since its first COVID-19 response on 7 February 2020, ADB has already provided more than $225 million to meet urgent needs of both governments and businesses in DMCs. ADB’s COVID-19 response to date includes:
7 February 2020: A $2 million grant to enhance infectious disease prevention, detection, and response in the People’s Republic of China (PRC) and the Greater Mekong Subregion;
25 February 2020: A CNY130 million ($18.6 million) private sector loan to a Wuhan, PRC-based pharmaceutical distributor to enable the continued supply of essential medicines and personal protective equipment;
26 February 2020: A second grant window was established with an initial $2 million allocation to help DMCs contain COVID-19 and improve resilience. Additional financing is being mobilised for this grant window;
12 March 2020: $200 million made available through ADB’s Supply Chain Finance Program for companies manufacturing and distributing medicines and other items needed to combat COVID-19. Through its partner financial institutions, ADB can provide essential working capital to such companies;
13 March 2020: A $3 million grant to support the Philippine government’s response to COVID-19, including the purchase of emergency medical supplies and the delivery of effective health care services;
13 March 2020: A $600,000 grant from the Health System Enhancement Project to finance preventive and response efforts in Sri Lanka, including disease surveillance and the provision of medical supplies and equipment;
13 March 2020: $100,000 was reallocated from the Tajikistan Maternal and Child Health Integrated Care Project to finance COVID-19 prevention and mitigation, medical supplies, and equipment;
18 March 2020: $1.4 million was reallocated from the Fifth Health Sector Development Project in Mongolia to procure essential medical equipment for early detection, emergency care, and management of severe respiratory diseases. ADB also approved a $225,000 small-scale technical assistance to strengthen Mongolia’s national capacity for infection prevention and control.
ADB will publish updated estimates of the economic impact of the pandemic in its Asian Development Outlook 2020 to be released on 1 April 2020.