World Bank Prepares Rp 1.713 Trillion to Address Impact of Middle East War

JAKARTA, KOMPAS.com - The World Bank is preparing funds of up to $100 billion US or approximately Rp 1.713 trillion to respond to the impact of the war in the Middle East. These funds will be mobilised over the next 15 months.

World Bank President Ajay Banga stated that this amount exceeds the support provided during the Covid-19 pandemic, which reached $70 billion US. The funds are focused on developing countries most affected.

Some of the funds will be disbursed in the near term. The World Bank is preparing $20 billion US to $25 billion US or approximately Rp 342.7 trillion to Rp 428.4 trillion through a crisis response scheme.

In addition, around $30 billion US to $40 billion US or Rp 514 trillion to Rp 685.4 trillion will come from reallocating ongoing programmes over the next six months.

Banga assessed that funding needs could potentially increase if the conflict lasts longer. The World Bank will utilise its balance sheet and reserve capacity to provide additional financing.

“I am trying to create instruments with tiered response capacity, depending on how this progresses, at least to provide adequate momentum to take action,” Banga said.

This step reflects concerns about the war’s impact on the global economy. The surge in energy prices is the main source of pressure as it drives inflation and constrains growth.

The IMF states that without the conflict, global growth could potentially rise by 0.1 percentage points to 3.4 per cent.

IMF Managing Director Kristalina Georgieva believes recovery remains possible if the conflict subsides soon. Risks increase if the war continues into the summer.