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[KH Finance Forum] World Bank Korea to establish platform for Korean startups to participate in global projects

‘COVID-19 threatens poverty reduction in developing nations’

By Jung Min-kyung

Published : Nov. 4, 2020 - 16:57

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Soh Hoon Sahib, special representative of the World Bank Group Korea office speaks at The Korea Herald Finance Forum held at The Shilla Seoul on Wednesday. (Park Hyun-koo/The Korea Herald) Soh Hoon Sahib, special representative of the World Bank Group Korea office speaks at The Korea Herald Finance Forum held at The Shilla Seoul on Wednesday. (Park Hyun-koo/The Korea Herald)
World Bank Group Korea Office plans to launch a platform that connects local startups with global projects designed and operated by the international financial institution, special representative to World Bank Group Korea Office said Wednesday.

“We plan to establish an ‘Innovation Fund’ to connect global Bank projects and clients with Korean and East Asia Pacific suppliers of innovative and technology enabled solutions,” Soh Hoon Sahib said during the Korea Herald Finance Forum held Wednesday.

The projects would be centered on the World Bank Group Korea’s two key focuses: green growth innovation and technological innovation. It would embark on COVID-19-related projects for the ”next two years,“ Soh explained.

On top of it, Soh expressed concerns on the coronavirus pandemic’s reversal of decades-long “economic progress and poverty reduction in developing countries,” with those in poverty suffering from limited access to healthcare and resources,

Soh said that per capital incomes of 90 percent of emerging and developing economies are expected to contract in 2020, due to coronavirus woes. The crisis is likely to fuel further inequality, he noted.

“For World Bank, the effects of poverty on humanity is one of its key focuses,” Soh said, pointing to a graph that showed the global extreme poverty rate. The figure stood at 10 in 2015 and at some 9.25 in 2017, meaning that extreme poverty was being slowly alleviated. Extreme poverty was measured as the number of people living on less than $1.90 per day.

“For the last 20 to 30 years, poverty was riding on the trend of reduction and if this continued throughout this year it would have dropped below 8.5 percent. But due to the pandemic, it is likely to bounce back to 9.5.”

Soh said the World Bank expects the number to jump to 119 million from the pandemic.

“COVID-19, conflict and climate change have reversed the gains in poverty eradication for the first time in a generation,” said a report tied to Soh’s speech. 

Soh Hoon Sahib, special representative of the World Bank Group Korea (Park Hyun-koo/The Korea Herald) Soh Hoon Sahib, special representative of the World Bank Group Korea (Park Hyun-koo/The Korea Herald)
Besides working as setbacks for poverty alleviation, Soh expressed concerns about the pandemic’s effects on the global financial sector and economy.

“Prolonged conditions of financial stress will have significant spillovers to the real economy through four types of risks -- market, liquidity, credit and earnings,” he said.

“While non-performing loans have remained at manageable level in most Asia Pacific economies, there is still need for close monitoring when heading forward,” headed.

Soh said that the Asia Pacific region has seen a considerable increase in corporate vulnerabilities this year, while credit growth has remained modest for the region.

On growing monetary and fiscal policy support to buoy the economy, Soh cited World Bank Chief Economist Carmen Reinhart’s remarks that “developing countries should take on new debt to help them fight the economic impact of the coronavirus pandemic — but they will later suffer an unprecedented wave of debt crises and restructurings.”

The World Bank Group is currently helping 100 of the poorest countries in every region of the globe -- home to 70 percent of the world’s population -- respond to COVID-19. On top of that, it has invested up to $160 billion over 15 months in global financing tailored to the health, economic and social shocks countries face and $12 billion for developing countries to finance COVID-19 vaccines, tests, and treatments.

By Jung Min-kyung(mkjung@heraldcorp.com)