International financial institutions are currently mobilising to support countries in facing the health and economic effects of the novel coronavirus, which has spread throughout most of the world.
The World Bank is at the forefront of institutions that were quick to announce an emergency financing package worth $14 billion to support member countries in their efforts to contain the epidemic and mitigate its economic and financial consequences.
With the strong relations between Egypt and the World Bank, Egypt was at the forefront of countries that benefited from these funds, and the field is still open for more support, Marina Wes, the Regional Director of the World Bank in Egypt, Yemen and Djibouti, said in an interview with Al-Ahram newspaper.
How will the World Bank support Egypt in facing the economic challenges caused by COVID-19? Did Egypt apply for the $14 billion package of fast-track financing to meet its current challenges?
The World Bank is redeploying resources in existing World Bank-financed projects worth up to $1.7 billion, including through restructuring the use of emergency components of existing projects (CERC).
Based on this, we have activated the CERC under the Transforming Egypt’s Healthcare System Project to allocate $7.9 million as an emergency measure to support activities related to the COVID-19 outbreak in Egypt.
It is worth mentioning that the World Bank Group launched on 2 April its first operations for COVID-19 Emergency Health Support for developing countries around the world using a dedicated, fast-track facility for COVID-19 response.
The first group of projects, amounting to $1.9 billion, will assist 25 countries, and new operations are moving forward in over 40 countries using the fast-track process.
The bank has received requests from a number of countries, including Egypt, for this facility and it is rapidly advancing project preparation on these requests.
How do you view the Egyptian government’s role in the crisis?
We have been noticing the strong involvement by the political leadership in the fight against COVID-19 in Egypt. We also understand the strong social distancing measures that have been undertaken in accordance with the global best practice.
We have also noted the recent report by World Health Organisation mission to Egypt, which highlights the strong management of the outbreak, the closure of points of entry, the good documentation of surveillance and contact tracing, the process for referral and clinical management, the structured infection prevention and control program, the scaling up of reliable testing capacity, and the good use of communication channels with the right messaging.
However, the mission also concluded that more measures are needed with regard to the efficacy and safety of medicines, the capacity to implement alternative isolation options, the reliability of rapid diagnostic tests, and the risk communication programmatic priorities.
What are the main results of the World Bank’s Transforming Egypt's Healthcare System Project? How is this project contributing to the fight against COVID-19?
The $530 million project aims to improve the quality of primary and secondary healthcare services, enhance health and family planning services, and support the prevention and control of hepatitis C.
The project has already supported the screening of about 49.9 million Egyptians for hepatitis C – about 1.2 million Egyptians were treated for hepatitis C infection – and the contracting of 780 community health workers and 220 family doctors. Modern contraceptives (self-injecting) are being used for family planning and working on improving services at 600 primary healthcare facilities and 30 hospitals.
The first case of COVID-19 was reported in Egypt on 14 February 2020. The bank responded swiftly and the CERC was activated in the amount of $7.9 million. The support is intended to boost the country’s response to screening, contact tracing and triaging possible patients. We are continuously engaging the government to provide further technical and/or financial support if needed.
Will the current crisis reformulate the form of international cooperation and relations between countries?
The COVID-19 pandemic is impacting people around the world. This is truly a global pandemic, impacting inhabitants in richer and poorer countries. In these troubling times, especially during the most difficult moments, the World Bank stands ready to respond to the needs of people in Egypt and throughout the region and the developing world. We cannot do this alone, and we will work as closely as ever with our development partners, both bilateral and multilateral. Egypt and the bank have a long-standing and strong partnership to build on, not only in health, but also on social and economic issues. Crises and tragedies can bring people together, and that is what is needed right now.
What is the expected role of the private sector during this crisis, especially with the threat of layoffs and reduced wages?
Private-sector firms and workers are feeling the economic brunt of the response to the COVID-19 pandemic. The outbreak is quickly evolving beyond a health emergency, and the response is affecting very quickly and significantly the economy – the real economy in both cities and rural areas and the financial sector. Informal workers are likely to be particularly impacted. Governments around the world, including in Egypt, are taking decisive action to mitigate the impact on households, to support firms and to preserve jobs.
The private sector is of course part of the response – including immediate needs (such as pharmaceuticals for instance). It is also facing unprecedented challenges, so firms need support in the short term to address their immediate liquidity challenges (i.e. “to keep the lights on”), limit firm closures/bankruptcies, and prevent widespread layoffs. To be impactful, such support must be rapid, well-coordinated, transparent and time-bound. In the recovery phase, we anticipate that interventions will have to be geared towards building resilience and supporting growth-oriented enterprises and jumpstarting economies.
What are the most prominent economic repercussions of the crisis on Egypt and the region and how can they be overcome?
The World Bank expects a global recession in 2020. This comes after global growth recorded a post-global financial crisis low of 2.4 percent in 2019. Tighter credit conditions, weaker growth, and the diversion of government resources to fight the pandemic are likely to reduce funds available for key development priorities.
The severity and duration of the pandemic remains uncertain, and the burden is likely to be high for poor countries. In many of these countries, health systems are often weaker. As the situation is very fluid, we are currently still evaluating the economic impact on Egypt, but we will issue our revised forecasts shortly ahead of the (virtual) IMF-WB Spring Meetings.