Upcoming Fora for Influencing the Aid Debate: IDA 15 Replenishment Negotiations
Author: Ajoy Datta
The International Development Association (IDA) was established in 1960 and is part of the World Bank Group. It is the world’s single largest provider of concessional resources (such as interest free loans and grants) for poor countries. Annual IDA commitments to the world’s 81 poorest countries have increased steadily and have averaged about $8.4 billion – almost £5 billion – over the past three years. The IDA has provided resources to 39 countries in Africa, 13 countries in East Asia, 10 in Europe and Central Asia, nine in Latin America and the Caribbean and eight in South Asia, two in the Middle East and North Africa.
IDA replenishment negotiations take place every three years and provide an opportunity to agree the framework within which the World Bank will operate in poor countries over that period. Negotiations on the 14th replenishment – for IDA 14 – were concluded in February 2005. Click here for the final report and here for an analysis of this produced by the Bretton Woods Project. It was agreed to make an increase in IDA funds and major improvements in IDA’s effectiveness. The replenishment negotiations resulted in $33 billion or about £19.5 billion being made available for development assistance during the IDA 14 period from 2005 to June 30 2008.
The largest pledges to IDA 14 were made by the United States, the United Kingdom, Japan, Germany, France, Italy and Canada, but less wealthy nations also contribute to IDA. Turkey and Korea, for example, once IDA borrowers, are now donors. Countries currently eligible to borrow from International Bank for Reconstruction and Development (IBRD - the World Bank’s non-concessional lending arm), but not from IDA such as Brazil, the Czech Republic, Hungary, Mexico, Poland, Russia, the Slovak Republic, and South Africa are also IDA14 donors.
IDA’s 40 donor countries agreed to contribute £9.9 billion. The rest will come from transfers from the IBRD and from IDA’s international resources which will be furnished mainly through repayment of IDA loans. The IDA replenishment represents a 23 percent increase over IDA 13 and the largest expansion of IDA resources in two decades. However, the targeted increased was originally thirty percent.
A mid-term review meeting of IDA 14 was held in November 2006, which provided an opportunity for member states to review the World Banks performance. To increase openness and help ensure that IDA’s policies are responsive to country needs and circumstances, representatives of borrower countries from each IDA region have been invited to take part in the replenishment negotiations since IDA 13. The number of borrower representatives was expanded – to a total of nine – during the IDA 14 negotiations. In addition, since IDA 13 background policy papers are publicly released, as well as drafts of the replenishment reports prior to their finalisation.
IDA 15 replenishment negotiations also provide an opportunity for governments in the North and the South to develop a shared strategy for action in 2007/08 to reform the aid delivery system. The Bank Information Centre has produced an article called Demystifying International Development Association (IDA) replenishment with more useful information about the IDA replenishment negotiations.