The World Bank has pledged to step up the fight against extreme poverty after announcing that the conclusion of tough negotiations with rich countries has left it with a record $75bn for grants and soft loans to its poorest members over the next three years.
Despite budgetary pressures caused by slow growth and austerity, the Washington-based institution said 47 countries had agreed to make donations to the International Development Association (IDA) – its fund for providing assistance to the least developed nations.
The bank said that for the first time in IDA’s 56-year history it would be using its strong credit rating to raise money for the fund from the world’s capital markets. A third of the $75bn will be raised in this way, with a third contributed by donor governments and a third coming from the bank’s own resources. The last IDA round raised just under $52bn.
“This is a pivotal step in the movement to end extreme poverty,” the World Bank Group president, Jim Yong Kim, said. “The commitments made by our partners, combined with IDA’s innovations to crowd in the private sector and raise funds from capital markets, will transform the development trajectory of the world’s poorest countries. We are grateful for our partners’ trust in IDA’s ability to deliver results.”
IDA was set up in 1960 and runs on three-year replenishment cycles. The new round – IDA18 – will run from 2017 to 2020 and is intended to support health and nutrition for 400 million people, access to water for 45 million people, training for 9-10 million teachers and immunisations for 130-180 million children.
The bank will not reveal details of the contributions made by individual countries until the new year. Britain was the biggest single donor to the last round of funding (IDA17) followed by the United States.
“With this innovative package, the world’s poorest countries – especially the most fragile and vulnerable – will get the support they need to grow, create opportunities for people, and make themselves more resilient to shocks and crises,” said Kyle Peters, the World Bank Group’s interim managing director and co-chair of the IDA18 negotiations. “IDA’s focus on issues like climate change, gender equality and preventing conflict and violence will also contribute to greater stability and progress around the world.”
The bank said it had asked donor countries to match the contributions in national currencies that they made to IDA17 and that in the vast majority of cases the call had been heeded.
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