International Development Association is the "daughter organization" of the World Bank. It was founded on 24 September 1960. This association offers loans and grants to the needy and least developed countries around the globe, particularly for underdeveloped or developing countries.
Headquartered in Washington D.C, the United States, it acts as a treasurer and supporter for poverty-stricken countries at the International level.
The International Development Association has 174 countries as its members. It is one of the largest platforms that explicitly divides and provides resources to its member countries. It uses validating sustainable solutions across the globe to win the fight against poverty.
International Development Association Origin
The International Development Association began after World War II. The consequences of the war on finances put the developing and underdeveloped countries under extreme pressure.
Initially, this organization assisted the International Bank for Reconstruction and Development, which already existed (IBRD). The founding of the International Development Association did more than add to the capabilities of the IBRD. It helped the LDCs (Least Developed Countries) enhance their low national income.
The first country to gain benefits from the International Development Association was the government of France to improve its economic status.
International Development Association Objectives
The objectives of the International Development Association are as follows -
Provides loans at zero or no interest, preventing least developed countries from borrowing from commercial banks at higher interest rates.
Building a Sturdy Economic Structure
The IDA provides countries with sustainable development finance to nations with credit risks.
Boosting Economic Growth
The IDA aims to provide the countries with long-term financial support for economic restoration and stability.
Improve the quality of living
IDA helps enhance a country's economic status, reduce inequality and alleviate poverty. Therefore, they can improve their standards of living significantly.
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Impact of the International Development Association
- The International Development Association provides quality of life, increasing the standards of living.
- The main emphasis of this association is to bring necessities like clean drinking water, electricity, and shelter to people of developing countries.
- In countries like Africa, this association has approximately helped around 66 million Africans since 1987, providing them with electricity and enrolling 15 million children in schools for better education.
- Countries like Indonesia and India are hubs for a lot of foreign Investment.
- On the other hand, 70% of the global poor benefited from the IDA.
- However, in some middle-income countries, the distribution was either uneven or was plagued with corruption and economic mismanagement.
International Development Association Funding
The International Development Association exclusively requires the planning of its resources regularly. Its member countries meet every three years to understand the requirements and make donations.
Most recently, in December 2019, it was refilled with $82 billion, and again in 2020 due to increased usage of resources during the COVID -19 times.
The International Development Association introduced 20 exclusive themes to cover all aspects of existence. It includes pressing issues such as Climate Change, Human Capital, Gender and Development, Human Capital, etc. Currently, IDA is working on 1828 projects across 9,917 locations in 97 countries, spending around $161.48 billion.
FAQs on International Development Association
Q1. What are the recent works of the International Development Association?
In Pakistan, the International Development Association works with the government to provide technology-based education to the students of Pakistan. Across Benin, Malawi, with the support of the World Health Organisation, it provides funds for vaccination drives. Recently, the World Bank offered IDA $93 billion to help the countries with low capital income fight against COVID-19.
Q2. Why is the International Development Association relevant?
International Development Association is a significant organization since it is one of the biggest fund collectors and distributors. It provides to the underdeveloped and developed nations in need of monetary support.
Q3. What is the main aim of the International Development Association?
The International Development Association mainly aims to bring down poverty levels in poverty-stricken countries. They contribute by providing loans at zero or minimal interest rates to help the countries prosper. However, the repayment of loans may extend from 30-40 years, allowing them to recover from their economic losses and is fully capable of repaying their loans.
Q4. Who is the head of the International Development Association?
Headquartered in Washington, D.C. in the United States, the Chief Executive Officer Kristalina Georgieva International Development Association.