International Development Association IDA lending arm of World Bank and United Nations

International Development Association is one of the lending arms of World Bank Group which is a specialized agency of United Nations. It was on 24th September, 1960 that International Development Association (IDA) was established and ever since it has been giving financial loans and grants to the poorest developing nations to decrease the gap between developed and developing countries and change lives. IDA works under World Bank Group and aims to power its developmental projects. It has been an excellent international finance institution in the last 60+ years helping numerous poor nations to stand up on their own feet. IDA provides loans which have a very long maturity period and has been soft on nations. It is a financial institution but totally committed to development and reasonable and adjusting working.

 

In between 2000 to 2010, IDA financed projects of recruitment and training of 3 million teachers, immunizing 310 million children around the world, funding $792 million in loans to 120,000 small and medium enterprises, building/restoring 118,000 kilometers of paved roads, building/restoring 1,600 bridges, and long-drawn-out access to better quality water to 113 million people and improved sanitation facilities to 5.8 million people. It has issued a total US$238,000,000,000 in loans and grants since its launch in 1960. Thirty-six of the association's borrowing countries have graduated from their eligibility for its concessional lending. However, nine of these countries have relapsed and have not re-graduated. IDA has been a helping hand for millions of people and numerous countries. World Bank Board of Governors which consists of one member from each member state discusses and lays down the plan for the next financial year. They decide the goals to be achieved and all the work to be done by the IDA. These decisions are then conveyed to the Board of Directors which consists of 25 Executive Directors and President of International Development Association who work accordingly and manage operations.

Work of IDA is evaluated by IEG (Independent Evaluation Group) which is a fully autonomous unit of World Bank Group which monitors and evaluated the work of all 5 branches of World Bank Group. Recently, IDA realized the need for prevention of corruption of in implementation of activities and plans supported by IDA lending. IEG recommended in 2011 to increase salaries of staff in IDA so that they do not resort to any corruption to make more money and called in for implementing Paris Declaration on Aid Effectiveness within the organization.

 

 

IDA loans and grants have made significant effects on the progress of every country they have worked with. With time, many countries have been successful in increasing their Gross National Income per Capita such that they become ineligible for any future grants from IDA.

As of now, IDA has 173 member states of which 75 are eligible for grants and loans from since they gave gross national income per capita below $1,145. Most of the beneficiary members here are from Africa. Though it is dependent upon funds from its member states, IDA raises a huge portion of its money from foreign markets. Every three years, member nations of IDA get together to replenish the IDA's capital. These funds come primarily from well-developed countries counting the United States of America, Japan, France, Germany, and the United Kingdom with 58% from the US, 22% from France, and 8% from the UK. As of 2016, there have been 18 IDA replenishment rounds. Fifty one member countries participated in the IDA's 16th replenishment of US$49.3 billion. The IDA's loans and grants are usually not paid in full to the borrower at the outset, but rather disbursed incrementally as needed by the project.