IDA – World Bank angling for increased funding

29 November 2010

The World Bank used its October annual meetings to lobby donors to increase funding to the International Development Association (IDA), the Bank’s low-income country arm, but official papers suggest that most additional cash will come from its own coffers, while NGOs remain sceptical.

The background paper for the Bank’s October development committee meeting does not contain a balanced or independent review of progress, but instead seeks to prove that IDA programmes “deliver results” and mean  “value for money.” In October, the third meeting was held of IDA deputies, the donor officials who negotiate the funding package and associated reforms for the 16th replenishment of IDA (see Update 70, 69). The options have been narrowed down to three, ranging from a 4.3 per cent to a 15.5 per cent increase in real terms compared to the previous replenishment (see Update 59).  In the Bank’s preferred option, almost three-quarters of the increase is expected to come from transfers from the Bank’s own resources, indicating that cash-strapped donors are unlikely to provide any significant increase from their own budgets. The final IDA deputies meeting is slated for mid December in Brussels.

Meanwhile, NGOs continue to be sceptical over whether the Bank should be the recipient of scarce donor resources. In a November meeting with a minister of development from the UK, currently the largest IDA donor, NGOs argued that “allocation of additional money to IDA should depend on substantial institutional reforms; beside climate, energy, and education spending, reform is also needed in regard to loan conditionalities.”