The COVID-19 pandemic is painfully exposing the world's many interconnected fragilities. On the one hand, it has triggered a major health emergency that is sweeping the globe. On the other, it is massively disrupting everything from employment to remittances and threatens to erase decades of poverty reduction and undermine progress on the Sustainable Development Goals.
The economic downturn will be significantly worse than the Great Depression. Simultaneous supply- and demand-side shocks mean that food prices will surge. Tension, unrest, and even conflict will escalate unless release valves are found to manage rising grievances. The result is that many more people could die from hunger and violence than infections.
Signs of popular discontent are already evident. Demonstrations and protests, some of them violent, are flaring up from Brazil to India, and armed protesters marched in the U.S. last week to denounce the lockdown. Police are reportedly repressing people from Kenya to the Philippines, and there is a global crackdown by authoritarian states on journalists and freedom of the press. Extremists and organized crime are taking advantage of the crisis, including by expanding their activities online.
The World Bank's shareholders met recently to discuss the institution's role in COVID-19 response and recovery. Some experts were hoping for stronger signs of support.
The impacts of the pandemic are felt most acutely by the poorest segments of society — the least prepared to deal with it. The imposition of stay-at-home orders is impossible to sustain in most of the world's slums and informal settlements, which are home to roughly 1 billion people. Their simmering frustrations are not captured in global market data or national statistics. Yet it is precisely those most disenfranchised and marginalized who are being forced to choose between being left behind and forcibly resisting.
The lack of global cooperation to address the pandemic is not helping. The G-20 and G-7 have yet to set out a real recovery plan. Deepening geopolitical rivalries — principally between the U.S. and China — also threaten to make a bad situation much worse. The United Nations and the Bretton Woods Institutions have taken several positive steps — including calling for a global cease-fire, an end to sexual and domestic violence, and debt reduction and funding for the poorest countries. Yet these efforts are incommensurate with the gravity of the situation.
There is also the danger that major development agencies such as the World Bank are overly reliant on processes designed for “normal” times to address rapidly growing fragilities. They will need to change their approach if they are going to get the cash, services, and expertise to the most vulnerable, disenfranchised, and disconnected. The expectation that national government partners will be able or willing to deliver the goods is not always justified. This would not only be wasteful, but could be destructive since it can perpetuate elite capture, corruption, inequality, and protest.
The World Bank has the mandate and capacity to proactively and significantly reduce the potential for violent instability. The organization has worked on issues of fragility for decades, including ways to help countries exit risky conflict traps. Over the past month, the bank has made important policy moves, such as calling for debt relief, fast-tracking $14 billion in support, and promising $160 billion more over the next 15 months. It is also urging national counterparts to avoid introducing food export bans, which would shut down borders and food distribution.
What else can the World Bank do to avoid a spike in social unrest and disorder during and after the pandemic?
First, the institution's own fragility, conflict, and violence agenda should be put front and center in planning and operations right now to have impacts later. The new FCV agenda and the pressing development concerns of fragility are even more relevant than they were a month ago. This is not a “nice-to-have” feature but an essential service that the bank can scale rapidly. Bank personnel and partners must recognize, as some do, that the risk of spiraling violence is hardly restricted to poorer, highly indebted countries; it extends to middle- and upper-income ones as well.
Second, the bank should expand disbursement on fragility, conflict, and violence priorities. The establishment of the Fast Track COVID-19 Facility is an important and necessary first step. It is critical that financing go toward promoting social cohesion, strengthening national and subnational governance, and integrating peace-building and violence-prevention innovations. Recent mechanisms such as the Global Concessional Financing Facility were successful precisely because of how they responded to a clearly defined need.
Third, the World Bank's country offices need to dramatically shore up the capacity of their national and subnational counterparts, especially those in the most vulnerable countries. Roughly 2.7 billion people — equal to about 80% of the global workforce — are currently in lockdown. Around 60% of the global labor force works in the informal sector, which means they can rely on few, if any, safety nets.
Notwithstanding real obstacles to travel, the bank's talented staff members need to work with partners on the ground to quickly ramp up essential service provision and income support. This means reviewing programs and projects to see which ones should be extended, scaled, repurposed, or scuttled, using exemptions allowed for under the Fast Track COVID-19 Facility.
Fourth, recipients of World Bank assistance must show the necessary will and ability to take rapid action on behalf of the most vulnerable to the direct and indirect impacts of COVID-19. Anything less means that funds will likely languish in allocations and delayed investments. It can also increase the perception of impropriety and corruption.
Overcoming these kinds of political challenges is a familiar dilemma for the World Bank: What to do with clients who are not committed to pro-poor outcomes? Naming and shaming rarely works. The trick is to provide concessional finance and support to partners that present a higher risk but also a track record of success. Including an additional layer of transparency is more pressing then ever.
Fifth, when national governments are not a viable option, the World Bank can explore moving down to the next level. Can the bank work directly with state governors and metropolitan mayors who are on the front line, especially in times of crisis? The answer is that it already is, but much more can be done.
There is a real opportunity for the bank to make a tangible difference by expediting and scaling up its work in metropolitan areas, where over half of the world's population already lives. In some cases, the bank should also consider increasing support to relief and development agencies and local implementing partners who can reach at-risk populations.
None of this will be easy or straightforward. It entails more work, more staffers, and different ways of working. The focus will need to shift from how much money is moved to how many effective projects were adapted to pandemic response. Even more importantly, performance indicators should reflect how many projects were — rightly — canceled, how that money was repurposed, and how many of the most vulnerable people were reached with expanded safety nets. All of this implies stretching the notion of "clients" beyond national governments — something the World Bank has been doing, albeit slowly.
The World Bank was born in the aftermath of one of the most dramatic crises the world has ever experienced: the Second World War. The organization knows a thing or two about how to rebuild and reconstruct in the wake of emergencies. It has the expertise and reach to help bend the future toward greater peace and prosperity and away from violence and conflict.
To do so, it will need to learn from decades of experience working on fragility and pivot its business model — not just in the poorest states, but around the world. If it can update its vision, it can be a model for how other actors, both multilateral and bilateral, adapt — precisely at a time when we desperately need good models of global cooperation.