$82 billion package agreed on to help end poverty

52 donor countries of the World Bank committed to an $82 billion package recently to replenish funds for the Bank’s fund for the world’s poorest countries. Photo: Image Collab

52 donor countries of the World Bank committed to an $82 billion package to replenish funds for the International Development Association, the World Bank’s fund for the world’s poorest countries on 13 December. This is the 19th replenishment of the IDA and was announced by David Malpass, Group President of the World Bank, from Stockholm, Sweden, during a teleconference concluding policy and financing negotiations for the world’s poorest countries. “Today is a very good day in the fight to help the world's poorest countries. I'm pleased to share with you from Stockholm, that there's been an agreement on the largest ever replenishment of the IDA. A coalition of 52 donors and borrower countries came together today with a common purpose. The donors agreed to a record package of US$82 billion, with US$23.5 billion of new donor contribution. This will support people who depend on IDA in 74 countries,” he says.

Malpass says two thirds of the world's poor, almost 500 million people, live in the 74 countries eligible for IDA and donor countries include six new donor countries, with several more countries expected to add their contributions. He says the new financing announced includes nearly $50 billion in additional commitments for countries in Sub Saharan Africa. "This new funding will allow IDA to work in situations of fragility, conflict and violence, including in the Sahel, the Lake Chad region, and the Horn of Africa. The increase in contributions from countries that were once major IDA recipients and have become major IDA donors is noteworthy,” says Malpass. Nadia Daar, Head of Oxfam International’s Washington DC Office, says they celebrate the successful replenishment of IDA19 and donors’ aid commitments. She says the world’s poorest countries face significant funding gaps to fight poverty and inequality, and cope with economic and climate-related shocks. "Transparent and accountable concessional finance can help poor countries provide inequality-busting public services and build sustainable and equitable tax revenues, critical especially at a time of increasing debt distress,” says Daar. According to Daar, supporting countries to implement climate plans and providing 10 GW of renewable energy is an important step forward on climate action. She says the World Bank should prioritise low-risk technologies and access for the billion people still energy-poor. "In addition to new funds, we hope donors have also approved an ambitious policy package to keep IDA focused on tackling poverty and inequality and away from harmful activities such as support to for-profit schools, which lock girls and the poorest children out of an education,” she says. Malpass says they are committed to using every dollar contributed to achieve the greatest development impact and they will seek good development outcomes that will achieve more growth, poverty alleviation and better outcomes on gender, climate, fragile, conflict and violent states, jobs and economic transformation, good governance and accountable institutions. He says those are the major themes of this IDA19 replenishment. According to Malpass, the generosity of donors around the world gives the World Bank the capacity and credibility to deliver on their mission to help IDA countries achieve good country outcomes for their people. He says the strong and enthusiastic support for IDA comes despite the tight budget environments faced by many of their donors and most of the contributions have increased from IDA18.

“We're extremely grateful to our development partners, both donors and our clients, for their vision, partnership, and expression of confidence in the World Bank's ability to deliver for the world's poorest countries. IDA19 represents a great effort by donors from around the world and showed great generosity,” says Malpass.

The United Nations estimates that low and lower-middle income countries would need more than $2.5 trillion additional financing each year to meet the Sustainable Development Goals (SDG).