International Development Association – IDA

#IDA is written in threedimensional capital letters.
Since 1960, IDA has transformed societies and lifted millions out of poverty. © Simone D. McCourtie / World Bank

The International Development Association (IDA) is the part of the World Bank Group (WBG) that helps the world's 75 poorest countries end extreme poverty and build shared prosperity in a sustainable manner. It aims to reduce poverty by providing financial resources that boost economic growth, strengthen governance, reduce inequalities, and improve people’s living conditions. As a donor and through an active participation, Switzerland plays an important role in shaping the IDA’s priorities.

IDA is one of the largest sources of assistance for the world’s poorest countries. It provides support for health and education, infrastructure and agriculture, and economic and institutional development. It advises governments on programmes to achieve these goals. To finance such programmes, it issues loans and grants and provides considerable debt relief. IDA’s operational work is complemented by analytical studies that support the design of policies to reduce poverty.

Donor countries including Switzerland replenish the resources of the IDA every three years. These replenishment negotiations are an opportunity to discuss the strategic and operational orientation of the fund. The negotiations for the 19th replenishment of the IDA are underway in 2019.

Background: Adressing financial needs of developing countries

IDA addresses challenges such as building resilience to climate change, working in fragile and conflict-affected countries, improving gender equality and helping countries prepare for and respond to future crises. It lends money on concessional terms, meaning its loans have a zero or very low interest charge and repayments are stretched over 30 or more years, including a 5 to 10-year grace period.

With regard to development finance, the WBG, and IDA in particular, is the most influential multilateral organization. It has the largest potential to address the need for financial resources demanded by the 2030 Agenda for Sustainable Development. 

IDA’s aims: The five special themes of the IDA18 replenishment

The replenishment negotiations for the current funding cycle 2017-2020, known as IDA18, assembled a record USD 75 billion financing package. This was possible due to an adjustment of the IDA’s financing model. During IDA18, the development bank was allowed for the first time to leverage its balance sheet on the international capital markets. This new business model answers the call of the Addis Ababa Action Agenda for multilateral development banks to maximize their resources and find innovative ways to finance the 2030 Agenda for Sustainable Development. 

IDA18 places a special emphasis on five thematic areas: climate; jobs and economic transformation; fragility, conflict & violence; governance and institutions; and gender. 

The IDA18 financing package includes:

  • Doubling of core resources to fragile countries (USD 14 billion), including for the first time support to countries at-risk of fragility

  • Increased financing for regional programs to expand regional integration and infrastructure (USD 5 billion);

  • A new sub-window for refugees and their IDA host governments (USD 2 billion)

  • Increased financing for crisis response (USD 3 billion)

  • A new Private Sector Window to mobilize private investment in IDA countries (USD 2.5 billion)

  • Increased non-concessional financing for lower risk IDA countries and IDA18 graduates (USD 9 billion) 

The five special themes of IDA18 correspond closely to Switzerland’s development priorities defined in the Swiss Dispatch on International Cooperation 2017-2020.

The IDA’s results: Reducing Fragility, Conflict and Violence

Around half the world’s poor live in fragile or conflict-affected countries. The IDA has provided funds to rebuild states recovering from conflict; make states resilient to threats including conflict, disease and humanitarian emergencies; and develop infrastructure to enable people to resume peaceful and constructive lives. One example is the Central African Republic`s Emergency Public Services Response Project. After the civil war, this project has supported the government of the Central African Republic in re-establishing an operational government payroll and related financial management systems after the civil war. This allowed the government to function again and to provide its citizens with much needed basic public services after the war-torn period.

Switzerland has been a driving force in encouraging the IDA to mainstream fragility and conflict-sensitive programing. For that matter, it has advocated for close partnership between the development bank and other development actors, in particular the UN organisations. Such partnerships allow to elaborate joint regional, country and sector analyses to facilitate joint programming. Switzerland has been an inaugural donor to targeted initiatives such as the UN-World Bank Fragility and Conflict Partnership Trust Fund and the Global Program on Forced Displacement, both of which have been credited with strengthening the Bank’s development response to crises, promoting dialogue, and generating evidence-based knowledge. 

Results of IDA’s activities

Measuring results

IDA has been a leader in holding itself accountable for the aid effectiveness of its operations, placing in the highest category in the Aid Transparency Index for the first time in 2014. The IDA Results Measurement System is a robust accountability and management framework that has contributed significantly to results monitoring and learning at all levels. For IDA18, policy measures and performance targets to support IDA countries have been revised to more closely align with the Sustainable Development Goals. IDA is also committed to strengthening data collection and statistical capacity at the country level in the years ahead.

Switzerland’s commitment

Switzerland has been a member of IDA since 1992. Thanks to IDA’s financial strength and expertise in addressing poverty and other global issues, the Swiss contribution to IDA is an important complement of Swiss bilateral aid. As a donor and through an active participation,  Switzerland has pushed successfully for IDA to make a focused contribution toward the implementation and results monitoring of the 2030 Agenda, improve conditions for the private sector, and cooperate more closely with other development actors, such as the UN, especially in fragile contexts.

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