The World Bank said on Thursday that it will increase infrastructure investments to 45 billion dollars over the next three years to provide the foundation for rapid recovery from the global economic crisis.
"Investments in infrastructure can provide the platform for job creation, sustainable economic growth and overcoming poverty, and help jump start a recovery from the crisis," said World Bank President Robert B. Zoellick Thursday at the World Bank/IMF Spring Meetings.
"The Latin American and Asian crisis showed how countries can suffer from a decline in infrastructure, leaving a weaker foundation for long-term economic growth that hits the poorest the hardest," said the World Bank chief. "Infrastructure is also crucial to supporting agriculture. Without good infrastructure a lot of agricultural production can go to waste."
Zoellick noted that other countries can learn from China's experiences in 1990s to cope with crisis.
"China invested in infrastructure, both to create jobs and to build a foundation for powerful growth. We've seen results as investments removed bottlenecks to increased productivity," he said.
A new World Bank Infrastructure Recovery and Assets Platform (INFRA) will provide 45 billion dollars in infrastructure lending over the next 3 years, an increase of 15 billion dollars over the three years preceding the crisis.
In addition, IFC, the World Bank's member focused on private sector investments, set-up an Infrastructure Crisis Facility (ICF),which was developed to bridge the gap in available financing for viable, privately-funded or public private partnership infrastructure projects in emerging markets that are facing financial distress as a result of the financial crisis.
IFC will contribute up to 300 million dollars in equity with other sources expected to bring in at least 2 billion dollars more to co-finance infrastructure projects. This is likely to help mobilize additional funding worth three times that, covering around 10 billion dollar worth of infrastructure projects.
Moreover, the World Bank said that it will increase support to agriculture to boost productivity and production over the next two years to 12 billion dollars, up from 4 billion dollars in 2008.
Increases over this two-year period include a near doubling in agricultural support to Africa from 450 million dollars to 800 million dollars, and to Latin America from 250 million dollars to 400 million dollars, while supporting more than 1 billion dollars in new projects in agriculture and rural development in South Asia, according to the World Bank.