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World Bank raises record $75bn to help poorest members www.theguardian.com
The World Bank has pledged to step up the fight against extreme poverty after announcing that tough negotiations with rich countries have left it with a record $75bn (£60bn) 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 – 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 US.
The Department for International Development will maintain funding for IDA at its previous sterling level but, at a time when government aid spending has come under attack, will insist on reforms at the bank to ensure the money is well spent. The development secretary, Priti Patel, has made it clear to Kim that he should be able to explain why, where and how the bank is spending UK taxpayers’ money.
Kyle Peters, the World Bank Group’s interim managing director and co-chair of the IDA18 negotiations, said: “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.
“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.”
Peters added that the commitment was a “decisive and inspiring” response to the challenge of achieving the ambitious sustainable development goals for poverty reduction adopted by the international community in 2015.
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.
Kim believes the extra money will help achieve the two key goals he has set for the bank: eradicating extreme poverty by 2030 and raising the living standards of the bottom 40% of the population in developing countries. The bank says IDA will be able to double the resources to address fragility, conflict and violence as well as additional financing for refugees and countries that host them.
Some of the extra funding will be channelled through the bank’s private sector arm, the International Finance Corporation, a decision that drew criticism from the development charity Oxfam. Nick Galasso, head of Oxfam’s World Bank office, said: “This is great and sorely needed news, when the world faces the crises of inequality and climate change.
“The World Bank is also proposing to dramatically increase the money it gives via the private sector, which would be a bad idea. The bank has a very poor track record in this area, bankrolling corporations that make active use of tax havens and others that have been involved in murderous land grabs. We urge the bank to significantly increase their oversight and protections before a single dollar is invested in this way.”
Jamie Drummond, executive director for global strategy at the One Campaign, said: “We expect more than half of the $75bn committed during this replenishment to flow to Africa over the next three years. Such robust backing for the bank is a real boon for the fight against extreme poverty, hunger, deadly diseases, and the other root causes of forced displacement. It offers an important opportunity as we partner to help countries like Nigeria and Mali tackle extreme poverty, extreme climate, and extreme ideology.”
Published Date:2016-12-16
