The IDA-15 Timeline
The IDA Deputies will have at least four meetings during the negotiations process. the first was held in Paris in early March 2007. Key issues and priorities were identified, based on IDA Deputy position papers that were to have been submitted to IDA-15 Chairman Philippe Hourer. Key issues are: fragile states, IDA effectiveness, and the international aid architecture.
Funding levels for the replenishment were debated at the second meeting, held in Mozambique in June. This meeting also involved civil society representatives (see below).
Priorities and funding will be debated during the third meeting, which will take place during the October WB Annual Meetings in Washington, DC. The fourth meeting, scheduled for the end of the calendar year, is to finalize any outstanding issues. Past replenishments have often required further meetings to iron out differences among IDA Deputies..
June 2007 IDA Deputies meeting in Mozambique
The International Development Association (IDA) had its second meeting June 28-30 to discuss the 15th round of replenishment funds. The meeting held in Maputo, Mozambique focused on the role of IDA in the global aid architecture and IDA's role in fragile states, such as Liberia and Somalia. The African Forum and Network on Debt and Development released a statement on June 27 which called for IDA's attention to debt, aid, and conditionalities as key issues of the African development agenda and the Millenium Development Goals. In a joint statement released immediately before last week’s official meetings, Mozambican CSOs claimed that making aid effective was very much “dependant on reducing conditionality” attached to development aid.
March 2007 IDA Deputies meeting in Paris
IDA Deputies selected the "special themes" that IDA15 discussions will focus on. Of over 75 themes initially proposed by the Deputies, three were selected at the March meeting: the financial architecture; aid effectiveness; and fragile states.
What is IDA?
The International Development Association-the World Bank's "concessional," or low-cost lending arm, provides funding to the poorest member governments of the World Bank.
Since its inception in 1960, IDA has lent over US$142 billion, with over US$100 billion outstanding for repayment. Eighty-one countries are currently considered eligible to borrow from IDA. To be eligible, IDA borrowers must (a) lack sovereign creditworthiness, (b) have a per capita income of less than US$895, and (c) must meet certain "performance" criteria set by the World Bank. IDA is funded through three main sources: reflows from previous loans, transfers from IBRD net income, and contributions from IDA donors.
IDA lending flows to an immense array of programs and projects, from basic health and education provision to economy-wide adjustment operations, from water supply and sanitation to oil, gas, and mining projects. The bulk of IDA lending supports individual investment projects. In recent years IDA has become, according to the Bank, "the single largest source of donor funds for basic social services to the poorest countries."
IDA is often the first donor to provide quick and flexible support to countries in post conflict and post natural disaster circumstances, in addition to supporting African countries over the long haul, with relatively predictable aid flows and sustained advice.
What is replenishment?
The World Bank and other multilateral development banks (MDBs) require assistance from their member governments to finance their operations. Because many of their loans are low-interest or interest-free, and have long grace and repayment periods, the MDBs continually need to have money injected into their coffers. This periodic allocation of funds by donor governments is known as replenishment.
How it works
World Bank IDA replenishments occurs every three years, and includes two phases prior to commencement: donor government negotiations and national level appropriations. During negotiations, representatives from IDA donor governments (the IDA Deputies) meet with World Bank Management to determine appropriate sizes of replenishment, draft policy frameworks for identifying the particular types of projects that will receive replenishment resources, and negotiate equitable contributions from each donor government to the institution during the replenishment period. The US IDA Deputy is Kenneth Peel, Deputy Assistant Secretary of International Development Finance and Debt at the US Treasury.
Following these negotiations, appropriations take place at the national level, as donor governments work within their own legislative frameworks to allocate the necessary funds promised to the Bank during replenishment negotiations.
The United States and Replenishment
The US Treasury Department is the lead federal agency with responsibilities for the MDBs and thus negotiates for the US Government during replenishments. Treasury is also responsible for securing resources from Congress promised to the Bank during replenishment negotiations. Since Congress appropriates funds for foreign operations - including replenishment at the MDBs - during its annual Congressional Budget Cycle, it can influence US policy towards the MDBs.
Congress typically uses various types of legislation and strategies to promote reforms at the MDBs, in part during replenishment: reporting conditions, voting restrictions and policy guidance. Find out more on BIC's US Government Oversight webpage.