One of the priorities outlined in IDA16 and approved by the Executive Directors of IDA on February 15, 2011, is strengthening the capacity of IDA countries to deal with exogenous natural or economic shocks. To address the impact of such crises in a timely, structured and transparent way, and provide additional financing to respond to the crisis, a Crisis Response Window (CRW) was created.
The primary objective of the CRW is to provide IDA countries with additional resources that will help countries to respond to severe economic crises and major natural disasters and return to their long-term development paths. In November 2015, the Executive Directors of IDA expanded the eligibility criteria for accessing the CRW to include public health emergencies and epidemics.
In the case of natural disasters, the CRW targets events that are exceptionally severe. The additional CRW financing would complement UN efforts to provide relief, such as by supporting safety nets for affected populations and restoring basic physical assets that were destroyed by the disaster.
In the case of economic crises, the CRW targets severe economic crises caused by exogenous shocks that affected a significant number of countries. The use of the CRW is considered for a crisis resulting in a widespread or a regional year-on-year projected decline of GDP growth of at least 3 percent points in a significant number of IDA countries, complemented by an analysis of fiscal impact. CRW support may also be provided on an exceptional basis in the event of a severe price shock that might not have resulted in a GDP growth decline of 3 percentage points if: (i) the shock is broad-based and has severe fiscal impact; (ii) there is consensus that a concerted international response is needed; and (iii) the existing IDA allocations of affected countries are deemed insufficient to provide adequate response.
In the case of public health emergencies, the CRW is triggered when an IDA country has declared a national public health emergency, and the World Health Organization (WHO) has also declared that the outbreak is of potential international importance under the WHO’s global alert and response system in accordance with the International Health Regulations, 2005.
Financing from the CRW is meant to be part of a concerted international response and is accessed as a last resort. While all IDA countries could potentially be eligible for CRW support, actual access to CRW resources is linked to country-specific circumstances (e.g., the magnitude of crisis impact, access to alternative financing sources, etc.). Final decisions on CRW financing are made by the World Bank’s Board of Executive Directors based on factors including evidence of the severity of crises and the absence of alternative support mechanisms.
Starting July 1, 2020 in IDA19, the CRW will also provide up to $500 million to support early responses to slower-onset crises, namely disease outbreaks and food insecurity.