INTERNATIONAL DEVELOPMENT ASSOCIATION (IDA)

Presented by, Team 2

What is IDA?
y It is the part of the World Bank that helps the worlds poorest

countries.
y It complements the World Bank's other lending arm the

International Bank for Reconstruction and Development (IBRD)

y IDBR which serves middle-income countries with capital

investment and advisory services.

Contd..,
y IBRD raises most of its funds on the world's financial

markets.
y IDA is funded largely by contributions from the governments

of the richer member countries.

History:
y IDA was created on September 24, 1960 and is responsible

for providing long-term, interest-free loans to the world's 80 poorest countries, 39 of which are in Africa.
y IDA provides grants and credits, with repayment periods of

35 to 40 years.
y Since its inception, IDA credits and grants have totalled $161

billion, averaging $7$9 billion a year in recent years and directing the largest share, about 50%, to Africa.

Contd..,
y IDA's Articles of Agreement became effective in 1960. The

first IDA loans, known as credits, were approved in 1961 to Chile, Honduras, India and Sudan.
y IBRD and IDA share the same staff and headquarters, report

to the same president and evaluate projects with the same rigorous standards.
y A country must be a member of IBRD before it can join IDA.

Goal of IDA:
y To reduce inequalities both across and within countries by

allowing more people to participate in the mainstream economy, reducing poverty and promoting more equal access to the opportunities created by economi growth.

Factors that determine countries eligibility for IDA:

y Relative poverty, y Lack of creditworthiness to borrow on market terms and

therefore a need for concessional resources to finance the country's development program.
y Good policy performance, defined as the implementation of

economic and social policies that promote growth and poverty reduction.

IDA loans addresses:

y Primary education, y Basic health services, y Clean water supply and sanitation, y Environmental safeguards, y Business-climate improvements, y Infrastructure and y Institutional reforms

IDA member states:

y Members are: 169 of the UN members and the Kosovo. y Non-members are: Cuba, North Korea, Brunei, Jamaica,

Antigua and Barbuda, Venezuela, Suriname, Uruguay, Cook Islands, Nauru, Niue, Vatican City, San Marino, Monaco, Andorra, Liechtenstein, Malta, Bulgaria, Romania, Belarus, Lithuania, Turkmenistan, Bahrain, Qatar, Uganda, Namibia, Seychelles and the rest of states with limited recognition.

Functions of IDA:
y Promote world development, increase productivity and

standards of leaving in the less developed countries of its membership

y Assist the International Bank for Reconstruction and

Development (Articles of Agreement of the International Development Association, Art. I).

Top Ten IDA Borrowers

($million, includes regional projects) y India 2,578 y Vietnam 1,429 y Tanzania 943 y Ethiopia 890 y Nigeria 890 y Bangladesh 828 y Kenya 614 y Uganda 480 y Dem. Rep. Congo 460 y Ghana 433

IDA Lending by Sector:

y Infrastructure ........................37% y Public Admin and Law...............18% y Social sector...........................29% y Agriculture ............................8% y Industry ................................2% y Finance...................................5%

THANK YOU