27 countries brace for the worst... Will they seek emergency funding from the World Bank?

An internal document seen by Reuters said that 27 countries have begun, since the outbreak of the Iran war, putting in place crisis mechanisms that would allow them to quickly obtain financing from the World Bank’s existing programs.

The World Bank document did not name the countries or specify the total amount of money that could potentially be requested. The World Bank declined to comment.

The document showed that three countries have approved new instruments since the start of the conflict in the Middle East on February 28, while the other countries are still in the process of completing the procedures.

The war and the resulting disruption in global energy markets have affected global supply chains and hindered shipments of vital fertilizer from reaching developing countries.

Officials in Kenya and Iraq confirmed that they are seeking rapid financial support from the World Bank to deal with the repercussions of the war, such as rising fuel prices in the African country and the sharp decline in Iraq’s oil revenues.

These countries are among 101 nations that had access to some form of pre-arranged financing instruments that they can draw on in times of crisis, including 54 countries that signed up for the rapid response option, which allows countries to use up to 10 percent of their unused financing.

Last month, World Bank President Ajay said the bank’s crisis-response toolkit would allow countries to tap pre-arranged emergency financing, balances from existing projects, and fast-disbursing instruments to access an estimated $20 billion to $25 billion.

He said the bank could also redirect parts of its portfolio to raise the total to $60 billion over six months, with the possibility of other longer-term changes lifting the total to about $100 billion.

At the time, International Monetary Fund Managing Director Kristalina Georgieva said she expected up to a dozen countries to seek short-term assistance of between $20 billion and $50 billion from the fund. But three informed sources said only a few requests had been recorded.

One source, who spoke on condition of anonymity, said: "Countries are definitely in wait-and-see mode."

Kevin Gallagher, director of the Global Development Policy Center at Boston University, said countries are more prepared to request money from the World Bank rather than negotiate with the IMF because the fund’s programs generally require austerity measures that could worsen the social unrest already being experienced by countries such as Kenya.