IDA21 policy package disappoints as prospects for IDA countries continue to darken
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Article summary
- IDA21 ‘up to’ $100 billion replenishment falls short of G20’s Independent Experts Group and African aspirations
- Policy package remains deeply flawed, deepening “billions to trillions” agenda and failing to focus on urgently required economic transformation
In April, the World Bank board of governors approved the policy package for the 21st replenishment of the International Development Association (IDA21), the World Bank’s low-income country lending arm. The package confirms IDA21’s five focus areas of people, prosperity, planet, infrastructure and digital transformation; and four lenses of gender, jobs, private investments and fragility, conflict and violence. Whilst donor pledges from the US and UK are pending, the replenishment is set to reach ‘up to’ $100 billion, significantly below the $120 billion sought by African leaders and a far cry from calls in the 30 June 2023 G20 Independent Expert Group’s report for a tripling of IDA resources to $279 billion by 2030.
The document recognises that the replenishment takes place at a pivotal time for IDA countries, noting, “from 2020-24, IDA countries experienced the weakest half-decade of growth since the mid-1990s,” and emphasising that, “IDA countries collectively allocate 7.5 percent of their Gross Domestic Product (GDP) to debt service payments. This is higher, on average, than their combined public spending on health, education and infrastructure.”
Policy package: while worst fears of US intervention fail to materialise, significant concerns remain
While there has been relief that American efforts to reform the policy package on climate and gender were unsuccessful (see Dispatch Springs 2025), the fact remains that civil society organisations’ (CSOs) proposals and detailed input during the consultation period have been largely ignored (see Observer Spring 2024). Instead, the new policy package deepens IDA20’s focus on producing an ‘enabling’ environment for private sector investment with its likely negative consequences for inter alia policy sovereignty, domestic resource mobilisation and worker’s rights. Relatedly, the new package expands the private sector lending window for the International Finance Corporation (IFC), the Bank’s private investment arm, i.e. the contentious and much-criticised Private Sector Window (PSW), from $2.5 to $3.2 billion (see Observer Autumn 2021). María José Romero of the Belgium-based European Network on Debt and Development commented, “The package includes an important commitment to greater transparency in the use of PSW funds and its impact. Yet, the increase in its size risks further diverting resources from where they are most needed, such as for high quality universal public services, and deepening the problematic privatisation path in the most vulnerable countries.” Significantly, the policy package lacks a focus on, and does not have an indicator to measure, IDA’s contribution to desperately needed economic transformation (see Dispatch Springs 2024).
The document also lacks references to human rights, including decent work, in its pivotal jobs theme (see ObserverSummer 2025). Shereen Talaat of Morocco-based CSO MENAfem stressed, “IDA21 continues to ignore calls from civil society, especially feminist movements, for justice-centered development. The package deepens dependence on private finance while neglecting binding commitments to human rights, gender equality, and economic transformation. Without investment in public services, care systems, and redistribution, this approach will only widen inequality and reinforce structural debt and climate vulnerabilities across the Global South.”
While gender is integrated as a lens into the package, the approach is insufficient to meet CSO demands, as outlined in a November 2024 joint letter, to “ensure that the care economy, women’s rights and access to universal high quality public services are foundational priorities of IDA21” (see Observer Autumn 2024), and to alleviate concerns about the reduction of country-specific policy commitments and limited targets related to gender, relative to IDA20.
Jason Braganza of the African Forum and Network on Debt and Development concluded, “IDA21 is a representation of the current global political apathy towards realising ambitious financing commitments for the global development agenda and specifically for developing countries that are facing a quadruple crises of a deepening debt burden; high costs of capital; existential climate threats; and inadequate international financial architecture to address these challenges. The $100 billion will be seen as a victory for some but is a far cry from the $279 billion that was expected. Wealthy countries have yet again fallen short!”
