The World Bank stated that it had secured $23.7 billion for its International Development Association (IDA), the concessional lending arm, to support the world’s poorest countries. The total amount, which will be disbursed through borrowing mechanisms, would unlock $100 billion in total spending power- higher than the $93 billion that was raised during the last cycle in 2021.
Fundraising
Major Donors: Contributions came from over 50 donor countries and included major pledges from the United States, Japan, Germany, the United Kingdom, and France.
U.S. Contribution:
A record $4 billion commitment, indicating that a growing number of people from the United States support development programs around the world.
Levers Mechanism:
The financing will be multiplied fourfold through market borrowing when invested in developing economies.
Countries to be Funded
78 countries are eligible to access IDA financing.
The bulk of it is going to Sub-Saharan Africa, which absorbs almost two-thirds of IDA’s total financing over the recent past.
- Core Sectors:
- Health and education systems.
Infrastructure projects.
Climate resilience programs.
Economic stability and employment opportunities.Legacy and Impact of IDA
Role Through Time: Since its founding in 1960, IDA has extended low-interest loans and grants to the poorest countries in the world as it addresses systemic global issues.Graduated Recipients:
South Korea, China, and Turkey are examples of graduated recipients who have become donors, thus demonstrating the transformational role of the fund.Sectoral Impact:
Past funding cycles have been more focused on infrastructure development, governance improvement, and public service enhancement.
This record replenishment marks recognition globally of the challenges faced by developing nations, from climate change to economic instability. According to World Bank President Ajay Banga, the funds would be used to fill some of the critical gaps in health, education, and infrastructure while building resilience and fostering sustainable growth.
The IDA21 replenishment will act as a cornerstone for alleviating poverty and driving development over the next three years.
