Despite tough economic times, a global coalition of developed and developing countries Tuesday pledged to accelerate the fight to end extreme poverty by committing a record US$52 billion in financing over the next three years for the World Bank’s fund for the poorest, the International Development Association (IDA). In a meeting a Moscow, World Bank Group president Jim Yong Kim added “this is a success for the global community.” “We are deeply appreciative of the extraordinary efforts made by countries, many of which are facing their own economic challenges, to stretch to help the poorest. We are committed to making the most of every scarce development dollar to create new opportunities and bring about transformational change in the lives of poor people.”
The coalition agreed that increased funding was needed to tackle the toughest issues in fragile and conflict-affected states to help those countries tip the balance toward stability. This IDA replenishment will see an increased focus on the most challenging frontier areas, greater private sector mobilization, and stronger, more targeted investments in climate change and gender equality, as key to shaping the future. A strong commitment to more equitable growth underpins these efforts.
IDA is the World Bank’s main instrument for achieving the goals of ending extreme poverty and boosting shared prosperity in the world’s poorest countries–home to nearly one billion people living on less than $1.25 per day. The funding will allow IDA to deliver customized and innovative solutions to help the poorest countries address their most pressing development challenges.
In line with the IDA17 overarching theme of maximizing development impact, this financing is expected to provide, for example, electricity for an estimated 15-20 million people, life-saving vaccines for 200 million children, microfinance loans for more than 1 million women, and basic health services for 65 million people. Some 32 million people will benefit from access to clean water and another 5.6 million from better sanitation facilities.
IDA17, which runs from July 1, 2014 to June 30, 2017, will span the target date for the MDGs and the launch of the post-2015 agenda—a pivotal crossroad in the global effort to end extreme poverty.
“We have a unique opportunity to harness a changing global economy to help the poorest countries get on a path to sustainable, inclusive growth, lift millions from poverty, and increasingly fund their own development,” said Sri Mulyani Indrawati, World Bank Group Managing Director and Chair of the IDA17 negotiations. “Investing in the future of the poorest countries is an investment in the future prosperity and security of all countries.”
A total of 46 countries pledged to IDA, and the World Bank Group is continuing the tradition of contributing its own resources to IDA. IBRD and IFC are providing close to $3 billion to IDA over the next three years.
While grant contributions remain at the core of IDA’s financing framework, IDA17 is using Concessional Partner Loans as a way for countries to increase their contributions—in recognition of the exceptional circumstances of the current fiscal environment amid strong demand for resources.
“IDA is a unique partnership of developed and developing countries that share a commitment to invest in a better future for the world’s poor and for the global good,” said Joachim Von Amsberg, World Bank Vice President for Concessional Finance and Global Partnerships. “At a time of ongoing economic difficulty, this outcome is a testament to the spirit of global solidarity that underpins IDA.”