The World Bank said Saturday it would help poor countries struggling through the severest global economic crisis in decades by providing more than $55 billion for roadbuilding and other infrastructure projects left in limbo because capital investment has dried up.
The initiatives announced by the bank are expected to create jobs and lay the foundation for future economic growth and poverty reduction.
Assistance will be global, the bank said, but Africa is expected to see a large proportion of the investments, given the sizable needs on the continent.
In launching the new initiatives, World Bank President Robert Zoellick said, "As developing countries are facing the trials of the global economic crisis, it is vitally important that economic stimulus packages in the developed world are accompanied by support for those who cannot afford multibillion bailouts."
Zoellick's announcement came as the bank and its sister institution, the International Monetary Fund, were holding their spring meetings.
The bank's Infrastructure and Recovery and Assets Platform will provide $45 billion of the $55 billion total and the Infrastructure Crisis Facility, set up by the bank's private sector arm, will make $10 billion available for lending.
Germany and France are founding partners of the ICF with France contributing $1.3 billion through its development bank Proparco and Germany supplying $660 million through its development bank KfW.
France's Finance Minister Christine Lagarde, who took part in Saturday's signing ceremony, said, "These public-private partnerships in the infrastructure sector are a key component not only of the immediate response to the crisis but also of long-term economic growth."
She said that in addition to providing funds France would also make available its "long-standing expertise" in infrastructure projects.
Germany's Development Minister Heidemarie Wieczorek-Zeul said, "As sources of funding dried up, infrastructure projects have been left high and dry. And yet they are needed as key elements of development. Services such as water, sanitation, energy, transport and telecommunications are vital in the fight against poverty."
The bank said the global financial crisis has depressed investment in infrastructure projects, particularly in developing countries. The total yearly financial gap for infrastructure investments, including maintenance, in developing countries could range from $140 billion to $270 billion depending on their economic growth rate.
Infrastructure projects are widely recognized as key to job creation and laying the ground work for future productivity and growth.
Zoellick estimated that in Latin America, 200,000 to 500,000 jobs could be generated for every $1 billion governments spend on road maintenance projects.
The initiative follows a tripling in lending to $12 billion announced earlier in the week to support health, education and other safety net programs in poor countries. The goal of both World Bank efforts is to ensure "we don't repeat the mistakes of the past," Zoellick said at a news conference Thursday.
During previous financial crises in the 1980s and 1990s, governments in developing countries were forced to cut spending on infrastructure and social programs, he said.
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