The ongoing conflict in Iran has triggered a cascade of economic repercussions worldwide, with 27 countries now seeking crisis instruments to access emergency funding from existing World Bank programs, according to an internal document reviewed by Reuters. The document, which did not disclose the identities of the nations or the total amount sought, highlights the widening impact of the war on global energy markets, supply chains, and food security.
The affected countries are among 101 nations eligible for pre-arranged financing tools designed for crises, including the Rapid Response Option (RRO). The RRO allows countries to draw up to 10% of their undisbursed World Bank funds. However, the exact number of countries that have activated these instruments remains unclear as the bank continues to process requests.
The war’s disruption of energy markets has severely hampered global trade, with vital fertilizer shipments to developing nations facing delays. This has raised concerns about potential food shortages in vulnerable regions. The World Bank has already mobilized its crisis toolkit, which includes contingent financing, project balances, and fast-disbursing instruments. President Ajay Banga recently announced that these measures could provide an estimated $20 billion to $25 billion in immediate relief, with the potential to scale up to $60 billion within six months by reallocating portfolio resources. Longer-term adjustments could bring the total to around $100 billion.
Separately, the International Monetary Fund (IMF) has also been preparing for a surge in demand. Managing Director Kristalina Georgieva had earlier projected that up to a dozen countries might require $20 billion to $50 billion in near-term assistance. However, sources familiar with the matter indicate that relatively few formal requests have been made to the IMF so far, though the situation remains fluid as the conflict persists.
The dual response from the World Bank and IMF underscores the severity of the economic fallout from the Iran war. While the exact list of countries seeking aid remains confidential, the scale of requests suggests that developing nations are particularly vulnerable to rising energy costs and supply chain disruptions. The World Bank has emphasized its commitment to expediting disbursements to eligible countries, but the long-term impact on global economic stability remains uncertain.
For more on the World Bank’s crisis financing mechanisms, see World Bank Crisis Response.
Source: ARY News