World Bank President Jim Yong Kim, while launching the Global Infrastructure Facility (GIF) here on Thursday, said the potential economic impact of the Ebola epidemic could be as high as $32.6 billion, if not quickly contained.
The GIF is aimed at mobilising the private sector to help tackle the massive infrastructure deficit now facing developing countries and emerging markets such as India. The World Bank estimates that these countries need $1 trillion a year in extra investments through 2020 and with public purses stretched, it is significant that the heads of some of the world’s leading institutional investors such as insurance and pension funds will be signing up as partners in the GIF.
Deep-pocketed institutional investors have $80 trillion in assets but less than a percentage of pension funds are allocated directly to infrastructure projects and the bulk of that is in advanced countries, Dr. Jim said.
He said the GIF would address the challenge of finding “bankable projects” as investible resources were available with the private sector. This was in line with Prime Minister Narendra Modi seeking the World Bank’s technical support for the country’s infrastructure augmentation plans that he had raised in his meeting with Dr. Jim recently, the President said.
He was addressing a press conference here on Thursday at the onset of the World Bank Group’s annual meetings.
Dr. Jim cautioned against the “spill-over” effects to the rest of the global economy that could arise from the “aversion behaviour” the epidemic could trigger as had happened in the case of the SARS impact. “The price tag of the global economic impact goes up every day of delayed response … already airline stocks are feeling the impact of the cases of Ebola-related deaths of Spanish health workers,” Dr. Jim said.
The two-year regional financial impact of the epidemic could reach $32.6 billion by 2015-end, Dr. Kim said adding that it would be catastrophic for people throughout the West Africa region.
“I’ve just come from a high-level meeting on the Ebola crisis response … We heard from the presidents of the three most affected countries — Guinea, Liberia and Sierra Leone — and the challenges that each faces … over the past month, the international community has stepped up the global response but there is no doubt we are still way behind the curve, and that we have to quickly speed up, and scale up, the global response to this crisis,” Dr. Jim said.
