WASHINGTON, USA – The World Bank board of executive directors approved on Monday US$100 million COVID-19 Response and Recovery Development Policy Loan for The Bahamas. The operation will support the country’s efforts to provide COVID-19 relief and lay the foundation for a resilient economic recovery.
“The COVID-19 pandemic came on the heels of the devastation caused by hurricane Dorian,” said Tahseen Sayed, World Bank Country Director for the Caribbean. “The Bahamas has suffered one of the most severe economic contractions in the Caribbean. This World Bank assistance will contribute to country efforts to reduce vulnerabilities of citizens most impacted by the crisis, and support policy and institutional measures for a resilient recovery.”
The Bahamas has faced severe socioeconomic impacts due to the pandemic, which led to a sudden stop in tourism and an estimated economic contraction of 16.2 percent over the past year. Unemployment, already on the rise after hurricane Dorian, increased further, and poverty is estimated to have increased in 2020. This operation aims to help The Bahamas enhance COVID-19 relief and resilience, strengthen financial stability and the business environment, and improve fiscal sustainability and resilience.
It includes measures to enhance unemployment benefits and provide food assistance to those workers and households most affected by the COVID-19 crisis, and measures to develop an inclusive vaccination policy. It also supports reform actions undertaken by the country to expand coverage of deposit insurance, strengthen the crisis management framework, strengthen public financial management, and improve governance of the Central Bank.
This development policy loan provides support on an exceptional basis to The Bahamas, which has graduated from the International Bank for Reconstruction and Development (IBRD).
The financing responds to an emergency request from the government for exceptional IBRD assistance to respond to the COVID-19 crisis, given the disproportionate and severe economic impacts on The Bahamas due to its small size, heavy dependence on tourism, and vulnerability to natural disasters. The financing is part of a coordinated assistance effort by international financial institutions during the pandemic.
World Bank Group COVID-19 response
The World Bank Group, one of the largest sources of funding and knowledge for developing countries, is taking broad, fast action to help developing countries strengthen their pandemic response. We are increasing disease surveillance, improving public health interventions, and helping the private sector continue to operate and sustain jobs. Over the next 15 months, we will be deploying up to US$160 billion in financial support to help countries protect the poor and vulnerable, support businesses, and bolster economic recovery, including $50 billion of new IDA resources in grants or highly concessional terms.