Canada and the World Bank have finalised an agreement for Canada to provide US$200mn to the IFC’s global trade liquidity programme to support trade in developing countries.
Canada’s minster of finance Jim Flaherty and World Bank Group president Robert Zoellick, signed the agreement authorising the Canadian contribution on June 9.
Canada is the first country to officially participate in the new programme, a World Bank-led initiative that brings together governments, international finance and development institutions, and private sector banks, and will support much-needed trade finance in developing countries.
"By keeping our fiscal house in order long before the global turmoil began, Canada has been recognised as being better placed than many countries to weather the global financial turbulence and worldwide recession," says Flaherty. "Canada has already taken steps to keep our world-leading financial system strong through our extraordinary financing framework. Likewise, this Canadian support to the World Bank's new trade finance programme will help shore up global trade flows – a key element of global economic recovery."
"Supporting the global trade liquidity programme will help get trade moving in developing economies, which is critical for a global turnaround that would benefit all countries," says Zoellick. "Canada's US$200mn will have a multiplier effect by leveraging private sector resources for trade financing, and will help vulnerable countries, hard-hit by the crisis, to get their goods to market."
Canada originally announced the US$200mn contribution at the London G-20 leaders' summit in April. The funding is part of Canada's commitment to provide additional resources to the World Bank and the IMF to help build a more stable global financial system and strengthen the global economic recovery.
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