Update Country Report Maldives 14 Apr 2020

Event

As the economic and healthcare fallout from the novel coronavirus pandemic intensifies, more countries in Asia will become recipients of various emergency funds and schemes set up by the World Bank, the Asian Development Bank (ADB) and the Asia Infrastructure Investment Bank (AIIB) in the weeks ahead.

Analysis

On April 2nd the World Bank approved emergency support operations totalling US$2bn for 25 countries. The largest amounts of assistance were US$1bn for India, US$200m for Pakistan, US$129m for Sri Lanka and US$100m for Afghanistan. The Bank has pledged to disburse a further US$12bn as part of a fast-track package that will help to meet immediate health and economic needs. It has also pledged to disburse a further US$146bn over the next 15 months, which will be channelled towards policy-based financing.

On April 3rd the IMF announced that it was prepared to double its original commitment of US$50bn in rapid-disbursing emergency financing, which unlocked US$10bn through the zero-interest-rate rapid credit facility (RCF) for low-income countries and a further US$40bn through its rapid financing instrument (RFI) for emerging markets. The RCF and RFI do not entail the same sort of conditionalities as a fully fledged IMF programme, but the Fund will only disburse funds to a country if its debt is deemed sustainable (or on track to be sustainable), it faces urgent balance-of-payments needs and it is pursuing prudent policies to tackle the crisis. The IMF has received more than 90 requests since early April. Pakistan has requested US$1.4bn and is likely to receive this as early as mid-April.

The ADB tripled its coronavirus-related assistance to US$20bn on April 13th. A small portion of this, totalling US$2.5bn, will be disbursed in the form of concessional loans and grants. The funds will come from the ADB's countercyclical support facility. Even the AIIB has joined the fray, pledging to scale up investment in public health infrastructure. The multilateral development bank also hopes to create a crisis recovery facility with funds of around US$5bn, to help to support public and private entities experiencing the worst effects of the pandemic.