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What is IDA?

What is IDA?

  • The International Development Association (IDA) is the largest source of concessional financing for the world’s 81 poorest countries (not including the exception cases of Kosovo and Iraq).
  • IDA has 165 member countries, 39 of which are IDA donors.

Who receives IDA resources?

  • In FY07, countries with per capita income of up to $1,025 are eligible for IDA resources.
  • IDA also supports some countries, including several small island economies, which are above the operational cutoff but lack the creditworthiness needed to borrow from IBRD.
  • Some “blend” countries, such as India and Indonesia, are IDA-eligible based on per capita income levels, but are also creditworthy for some IBRD borrowing.

How much has IDA committed?

  • The amount of IDA resources countries receive depends on the quality of their policies to promote growth and reduce poverty, which is assessed annually.
  • IDA has grown significantly in recent years. IDA accounted for 40% of World Bank Group commitments in FY06, up from an average of 28% in the 1990s.
  • IDA12 (FY00-02) provided about $19 billion (SDR 15 billion), averaging $6.5 billion (SDR 5 billion) of new commitments per year.
  • IDA13 (FY03-05) provided about $25 billion (almost SDR 18 billion), averaging about $8.4 billion (about SDR 6 billion) of new commitments per year.
  • IDA14 (FY06-08) provides about $33 billion (SDR 22 billion), averaging about $11 billion (about SDR 7 billion) per year.
  • IDA aims to direct 50% of its resources to Africa subject to performance. In practice, an average of 48% of resources went to Africa in IDA12 and 47% in IDA13. In FY06, Africa received 50% of IDA’s total resources and two thirds of all IDA grants.

Regional shares of IDA commitments

How much debt relief does IDA provide, and what is the impact on IDA15?

  • Under the HIPC Initiative, IDA provides a total of $18 billion of debt relief. The Multilateral Debt Relief Initiative (MDRI), in implementation since July 2006, adds another $36 billion of debt relief by IDA.
  • HIPC and MDRI together cost IDA some $54 billion, equivalent to one third of IDA’s total resources prior to debt relief.
  • IDA’s credit reflows revolve to finance new IDA credits in the future. Debt relief cutsthese reflows by nearly $1 billion per year today, rising to $2 billion per year in 20 years’ time.
  • Donors have committed to fully replace IDA’s forgone credit reflows, on a ‘dollar-for-dollar basis’. This will substantially raise the total donor bill for IDA15 just so as to maintain IDA’s total commitment authority at the IDA14 level.
  • Only if donor financing for debt relief costs is provided in addition to donors’ normal financial support for IDA can poor countries reap the benefits of debt relief. Without additionality, poor countries would not be better off: They would, in effect, finance their own debt relief through lower allocations from IDA. To measure additionality, donors set IDA14 as the baseline for their normal contributions to IDA15, with HIPC and MDRI compensation supposed to be provided ‘on top’.
  • How many countries have graduated from IDA?
  • 32 countries have graduated from IDA throughout its history, ceasing to borrow from the Association. 9 of these countries have since “reverse graduated,” or reentered IDA. (See list of IDA graduates below)

What sectors do IDA resources go to?

October 2, 2006