World Bank Pledges $100 Billion to Support Poorest Nations

December 9, 2024

Donor countries pledged $100 billion to the World Bank’s International Development Association (IDA), which targets 78 low-income nations. It aims to provide grants and low-interest loans and the new total exceeds the previous $93 billion from 2021.

Funding Breakdown

Countries will contribute approximately $24 billion directly, which is slightly higher than the $23.5 billion from 2021. The fund will also issue bonds and employ financial tools. The goal is to reach $100 billion by mid-2028. However, this total is below the $120 billion requested by African leaders.

Contributions by Country

Several nations increased their contributions.

Norway raised its pledge by 50%.
South Korea increased by 45%.
Britain’s contribution grew by 40%,
Spain’s rose by 37%.
U.S. President Joe Biden committed $4 billion, up from $3.5 billion.

In total, 17 countries raised their pledges by over 25%. Ten of these increased by 40% or more.

Strategic Goals of IDA

World Bank President Ajay Banga brought into light the importance of IDA’s financial strategies, will maximise the impact of contributions. They will enhance the bank’s lending capacity. Funds will support investments in infrastructure, education, and healthcare. They will also promote private sector growth. Additionally, the funding will address climate change and global crises.

Over time, 35 countries have shifted from receiving IDA support to becoming donors, includes nations like China, South Korea, and Chile. Banga described IDA as important resource. It helps countries improve their economies and prepare for future challenges.

GKToday Facts for Exams:
IDA: The International Development Association provides financial assistance to low-income countries. It aims to reduce poverty through grants and low-interest loans, encouraging sustainable development and economic growth.
Seoul Conference: The conference in Seoul marked a historic commitment of $100 billion to the IDA. It brought into light international cooperation in addressing the challenges faced by the world’s poorest nations.
Transitioning Countries: Over time, 35 countries have transitioned from IDA support recipients to donors. This shift reflects their improved economic conditions and commitment to global development efforts.

« Previous Post Next Post »