World Bank Establishes Fund to Support Ukraine’s Recovery

October 11, 2024

The World Bank has created a special Financial Intermediary Fund (FIF) to help Ukraine as it continues to face challenges from the ongoing war with Russia. Countries like the United States, Canada, and Japan are expected to contribute money to this fund to assist with both military and humanitarian needs.

Establishment of the Fund

The World Bank’s executive board approved this fund as a critical way to provide financial support to Ukraine. This move aligns with the G7’s pledge to contribute up to $50 billion to help Ukraine by the end of the year. Russia was the only country to disagree with this decision during the vote.

How the Funding Will Work

While the contributions from the US, Canada, and Japan are still being finalized, the fund will also include money earned from the frozen Russian assets held during the war. The goal of this fund is to strengthen Ukraine’s economy during these difficult times.

European Union’s Involvement

The European Union (EU) has committed to providing about €35 billion to support the G7’s funding efforts. Additionally, immobilised Russian central bank assets will be used to further assist Ukraine’s financial needs.

Impact on Ukraine’s Economy

Experts say that these combined financial contributions will help reduce the financial strain on Ukraine’s budget. The costs related to the war in 2023 alone are estimated to be between $80 billion and $90 billion, making this funding extremely urgent.

International Diplomacy Efforts

The creation of this fund took place during important discussions between US President Joe Biden and German Chancellor Olaf Scholz about Ukraine. These conversations show how countries are working together diplomatically to support Ukraine in its time of need.

World Bank’s Role and Experience

Ajay Banga, the President of the World Bank, has said that the institution is prepared to manage this fund efficiently. The World Bank has experience with handling other non-military donor funds, making it well-suited for this task.

Global Contributions

The new fund is designed to attract contributions from countries outside of Europe as well. By doing so, the World Bank hopes to encourage a global effort to provide the resources necessary for helping Ukraine during this crisis.

About the World Bank

The World Bank was founded in 1944 to help rebuild after World War II. It is made up of five institutions, the most important being the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA). Its headquarters are in Washington, D.C., and it focuses on reducing poverty and promoting sustainable development around the world. The World Bank provides loans and grants to over 100 countries, supporting projects in education, healthcare, climate initiatives, and gender equality. It gets its funding from contributions from member countries and by issuing bonds.

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