IDA: A Crucial Partnership in a Changing World

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By Kristalina Georgieva, World Bank CEO

We know that the number of people living in extreme poverty around the world continues to decline. In 25 years, extreme poverty was reduced from 36% to 10%. That’s 1.1 billion fewer people living under $1.90 a day. But the pace of progress is slowing due to a concentration of poverty in sub-Saharan Africa and conflict-affected countries.
So, how effective is the global community in helping the poorest countries? And how should we step up our efforts to meet new challenges?

This week in Livingstone, Zambia, representatives from countries around the world will gather to discuss these questions, looking through the lens of IDA, the arm of the World Bank Group that provides financing to the poorest countries.

Over the next decade, the war on poverty is going to be won or lost in Africa. The International Development Association (to use its full name) matters because it is the largest single source of development assistance to the world’s 75 poorest countries. More than half of these countries are in Africa.

Founded nearly 60 years ago, IDA has just reached the halfway point in its current $75 billion, three-year cycle that will see around $45 billion targeted towards Africa. Called IDA18, this is the largest and most ambitious IDA program to date, with a focus on key themes that are so closely linked to overcoming poverty: jobs, economic transformation, climate change, gender, fragility and conflict. Special funding envelopes for crisis response, refugees, and private sector development are also part of the mix. So, at the halfway point what is going well?

The good news is there are strong indications of early success. We have exceeded our midterm target of making $30 billion in commitments to IDA-eligible countries. And IDA has launched its first-ever bond issue, mobilizing the markets in the fight against poverty. It raised $1.5 billion from 110 investors in 30 countries including banks, sovereign wealth funds, and insurance and pension funds.

More importantly, IDA translates funding into impact. For example, in conflict-affected countries over the last four years, IDA provided essential health and nutrition services for 17 million people, immunizations for over 87 million children, and better access to water and sanitation for 1.7 million people. The fund also helped these countries’ social safety nets reach 7.8 million more beneficiaries. In Cameroon, IDA has also committed $130 million to projects helping some 350,000 refugees.

There are good results already on the IDA18 themes and special funding areas. IDA has committed $185 million to 13 private sector projects, mostly in fragile states, enabling $600 million from other parts of the World Bank Group, namely IFC and MIGA. These investments also brought in $800 million from other financiers and helped reduce the risks to private investment.

To help developing countries deliver on their commitments to the Paris Agreement on climate change, IDA helped deliver an additional 5.1 gigawatts of capacity from clean energy sources, notably hydropower, solar, and geothermal. And while poor countries may not be responsible for climate change, many face its most damaging effects.

Climate change is upon us, and together with pandemics, its effects are among the most critical threats to vulnerable people, so it’s vital that IDA invests in climate adaptation and resilient infrastructure, not just climate mitigation. So, as well as stepping up following disastrous storms in Dominica and Tonga, in places like West Africa, IDA is helping coastal areas manage the impact of rising seas, land subsidence, and storm surges.

And in the Democratic Republic of Congo, IDA was the first to respond to a recent Ebola outbreak, working in partnership with the World Bank Group’s Pandemic Emergency Facility. IDA18 also allocated $350 million to address the cholera outbreak in Yemen.

To advance gender equality, IDA is supporting legal changes that help women access credit and jobs, gain more control over assets, and become more protected from violence. In countries like Ethiopia, Malawi, Rwanda, and Yemen, IDA projects are helping women get career training, embrace new technologies, and work with greater flexibility to balance jobs with child care and family responsibilities.

The root causes of poverty, however, remain a persistent threat. As well as climate impacts and natural disasters, ongoing conflict, bad governance and rapid population growth mean that IDA must become more responsive and even more effective. This week, I expect to hear calls to focus even harder on the IDA18 themes while also addressing emerging challenges such as debt sustainability, human capital, and disruptive technology.

But with these challenges comes opportunity, and that never fails to kindle my natural spirit of optimism. Just imagine, for example, the transformative power of a universal digital ID system for Africa that would enable millions of people to access government and financial services and unleash the digital economy. IDA is making this become a reality, as well as promoting transparency through online access to information.

I am confident that IDA can make a difference because it is a strong and time-tested partnership of countries seeking to change people’s lives for the better. We are committed to understanding what works best to defeat poverty, and to applying that knowledge wherever it can help.

Our coalition is open to new ideas and new members, because we know this is the best way to ensure everyone has a chance to reach their potential and make a contribution to society. We will only succeed by working together.

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