The International Finance Corporation (IFC) has said that the private sector is key to helping people to find ways out of poverty. Thomas Jacobs, IFC Country Manager for Papua New Guinea and the Pacific, Australia, and New Zealand, has said the COVID pandemic has led to increased demand for support for the private sector to help to restore economic stability and to preserve jobs.
The private sector is key to helping people find a pathway out of poverty. It is clear – even at this stage of the pandemic – that areas of IFC’s work in the Pacific such as tourism, agriculture, and the financial sector will be vital to help Pacific Island nations in the rebuilding process and to build up resilience to future shocks.
According to the IFC Country Manager, there is a clear interest in the corporation as a finance partner from governments, the private sector, and financial institutions in the region. The organization is looking at innovative ways to help small and medium-sized enterprises in Papua New Guinea and the Pacific islands, that have been impacted by the crisis, to continue or resume operations.
“As the largest global development organization working with the private sector, the IFC’s work in the Pacific in response to COVID-19 is focused on recovery, rebuilding and boosting resilience,” Mr. Jacobs said.
As the COVID 19 pandemic takes its toll on economies in the Pacific, the International Finance Cooperation is focusing on protecting jobs in the region. The IFC has reached out to existing investment clients to assess their immediate financial needs and to explore potential areas of support. This move is in line with the organization’s Board decision to allocate US$8 billion in fast-track finance to help private companies affected by the outbreak.
The IFC’s response is part of the World Bank Group’s overall $14 billion fast-track financing package.
The IFC COVID-19 Fast Track Facility is aimed at offering direct support to existing clients through direct lending to those companies affected and to financial institutions so they can continue lending to businesses to help preserve jobs, Mr. Jacobs said.
He explained that the bulk of the US$8 billion global allocation by the IFC would be targeted towards client banking institutions to enable them to continue to offer trade financing, working capital support, and medium-term financing to private companies who are struggling with disruptions to supply chains. He stated that the IFC, as part of the World Bank Group, was planning more support in the future.
“Globally, as much as US$160 billion could be provided in financial support over the next 15 months. And beyond finance, we’ve also been conducting ‘virtual’ sessions with the private sector. For instance, we have brought together representatives from the leading financial institutions across the Pacific so they could learn, from others around the world, the best lessons to adopt in crises, learning from their immediate and also past experiences” added the IFC Country manager.
The organization has been working with companies to help them to navigate the issues that could arise under mandated working from home through its gender team. IFC has also mobilized senior representatives from the private sector to mentor companies through the current challenges via its Corporate Governance Institute.
Due to COVID-19, the IFC is targeting greater focus on the agricultural sector as formal jobs will be lost and supply chains shortened. The IFC is looking at opportunities to support this sector and will build on the work related to the links between agriculture and the hotel that the corporation is already conducting in Fiji sector to apply to similar countries.
With borders closed, tourism across the Pacific has been hardest hit and this has had a domino impact within various countries. The Fijian Government reported over 40,000 job losses in the tourism sector in March and in Vanuatu, nearly half (47%) of 267 tourism businesses surveyed have ceased operations. Businesses have reported a 70% decrease in full-time jobs and a 33% drop in part-time jobs for their staff.
The IFC is now examining how best to support the tourism sector in light of COVID-19. This includes opportunities to work with governments and the private sector to develop new policies, markets and offerings to prepare for and support the recovery of this sector. In this respect, IFC is working with the World Bank to ensure a coordinated approach.
International Finance Corporation reaches millions of people in more than 100 countries, creating jobs, raising living standards, and building a better future to support the World Bank Group’s two goals: ending extreme poverty and boosting shared prosperity.
Opportunities from IFC are published on DevelopmentAid under Funding Agency “World Bank”.
