London, April 2, 2009
—The World Bank Group today announced the launch of a coordinated global initiative that brings together governments, development finance institutions (DFIs), and private sector banks to support trade in developing markets and address the shortage of trade finance resulting from the global financial crisis.
The Global Trade Liquidity Program will begin operations in May, channeling much-needed funds to back trade in developing countries. With targeted initial commitments of $5 billion from public sector sources, the program should be able to support up to $50 billion of trade. It raises funds from international finance and development institutions, governments, and banks, and it works through global and regional banks to extend trade finance to importers and exporters in developing countries.
Robert B. Zoellick, President of the World Bank Group, said, “We welcome the tremendous degree of cooperation between public and private sector institutions that allows us to come together to launch the Global Trade Liquidity Program for developing countries. I welcome G-20 support for this timely and targeted solution that will provide trade finance to support businesses across developing markets.”
The program has received commitments of $1 billion from IFC, a member of the World Bank Group. The U.K. government, through its development finance institution CDC, intends to make a contribution of up to £300 million. The Canadian government announced it will commit $200 million. The Dutch government will commit $50 million.
Douglas Alexander, U.K. Secretary of State for International Development, said: “Private sector businesses are an essential engine of growth and play a vital role in stimulating global trade, which provides a lifeline to millions of people across the globe. People in developing countries have been disproportionately hard-hit by the economic crisis. This money will help firms keep going during the difficult climate and help to protect and create jobs.”
Bert Koenders, Dutch Minister for Development Cooperation, said: “The dramatic drop in trade flows, combined with the credit crunch, severely impacts the poorest countries. The Netherlands therefore welcomes this joint effort and focuses its contribution of $50 million to low-income countries that have less policy space to deal with this crisis. Our contribution will enable IFC to arrange financing of $300 million to $750 million for new trade transactions, which directly benefit the poor.”
Donald Kaberuka, President of the African Development Bank, expressed his strong support for the Global Trade Liquidity Program, saying: “The drying up of trade financing lines is already having a major impact on the African continent. This needs to be addressed urgently. The African Development Bank has a leading role to play on the continent and our Board has already approved a Trade Finance Facility to that effect. We are very pleased with this cooperation to ensure a speedy and coordinated response to the crisis.”
Zoellick signed agreements with Peter Sands, Group Chief Executive of Standard Chartered Bank, and David Munro, Chairman, Standard Bank, South Africa. These two banks are the first that plan to work with the Global Trade Liquidity Program. The banks will receive lines of credit through the program that will enable them to significantly scale up the flow of trade finance to emerging markets banks. Standard Chartered will receive an initial line of $500 million and Standard Bank a line of $400 million.
About the World Bank Group
The World Bank Group is one of the world’s largest sources of funding and knowledge for developing countries. It comprises five closely associated institutions: the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA), which together form the World Bank; the International Finance Corporation (IFC); the Multilateral Investment Guarantee Agency (MIGA); and the International Centre for Settlement of Investment Disputes (ICSID). Each institution plays a distinct role in the mission to fight poverty and improve living standards for people in the developing world. For more information please visit
www.worldbank.org
,
www.miga.org
, and
www.ifc.org
.
About the African Development Bank
The African Development Bank Group is a regional multilateral development
finance institution established to contribute to the economic development and the social progress of African countries that are the institution’s Regional Member Countries. The African Development Bank Group comprises three entities: the African Development Bank (AfDB), the African Development Fund (ADF) and the Nigeria Trust Fund (NTF). As the premier development finance institution on the continent, the AfDB’s mission is to help reduce poverty, improve living conditions for Africans, and mobilize resources for the continent’s economic and social development. For more information, please visit
www.afdb.org
.
