The World Bank unveiled a new strategy aimed at helping small island states and other small countries address structural challenges such as remoteness, high exposure to shocks, and limited economic diversification. Moreover, the approach will place jobs at the centre of efforts to strengthen long-term resilience and economic stability.
World Bank President Ajay Banga discussed the initiative during a closed-door meeting with ministers and central bank governors from 50 small countries held alongside the IMF and World Bank spring meetings. Additionally, he said the strategy will use tailored tools to help small states attract more private investment and accelerate reforms that improve the business environment.
Banga said the strategy aims to support policy and regulatory changes that make it easier for businesses to operate and expand. As a result, the initiative seeks to strengthen growth prospects and generate more employment opportunities.
The strategy will focus on sectors where the World Bank sees the strongest potential for impact. Furthermore, priority areas include healthcare, affordable energy, resilient infrastructure, and micro and small businesses.
The World Bank Group approved a record $3.3bn in new commitments and guarantees for small states last year. Moreover, it noted that these economies face disproportionate pressure from global shocks, including disruptions linked to the Middle East conflict.
“For small businesses, a single hurricane, a sudden surge in imported fuel prices, or a downturn in tourism can undo months of investment and income in a matter of days,” the bank said in a blog released with the new strategy.
