abhishreshthaa
Abhijeet S
Origin and Evolution of IDA
IDA is the World Banks concessional lending window. It provides long-term loans at zero interest to the poorest of the developing countries. IDA helps build the human capital, policies, institutions and physical infrastructure that these countries urgently need to achieve faster, environmentally sustainable growth.
IDA’s goal is to reduce disparities across and within countries especially in access to primary education, basic health and water supply and sanitation and to bring more people into the mainstream by raising their productivity.
When the International Bank for Reconstruction and Development (IBRD), better known as the World Bank, was established in 1944, its first tasks was to help Europe recover from the devastation of World War II.
Once Europe was rebuilt, the bank turned its attention to the developing countries. As the 1950’s progressed, it became clear that the poorest developing countries could not afford to borrow needed capital for development on the terms offered by the Bank. They required easier terms.
With the US taking the initiative, a group of Bank member countries decided to set up an agency that could lend to very poor developing nations on highly concessional terms. They called the agency the ‘International Development Association’ (IDA).
Its founders saw it as a way for the ‘haves’ of the world to help the ‘have-nots’. But they also wanted IDA to be instilled with the discipline of a bank. For this reason, US president Dwight D. Eisenhower proposed, and other countries agreed, that IDA should be part of the World Bank.
IDA’s articles of Agreement became effective in 1960. The first IDA loans (known as credits) were approved in 1961, to Honduras, India, Sudan and Chile. Since 1960, IDA has lent $107 billion to 106 countries. It lends, on average about $ 6 to 7 billion a year for different types of development projects.
IBRD and IDA are run on the same lines. They share the same staff, the same headquarters, report to the same president and use the same rigorous standards when evaluating projects. IDA simply takes money from a different drawer. A country must be a member of IBRD before it can join IDA; 162 countries are IDA members.
IDA lends to countries that have a per capita income in 2000 of less than $885 and lack the financial ability to borrow from IBRD. At present 79 countries are eligible to borrow from IDA.
IDA credits have maturities of 35 to 40 years with a 10-year grace period on repayment of principal. There is no interest charge, but credits do carry a small service charge of 0.75 % on disbursed balances.
IDA is the World Banks concessional lending window. It provides long-term loans at zero interest to the poorest of the developing countries. IDA helps build the human capital, policies, institutions and physical infrastructure that these countries urgently need to achieve faster, environmentally sustainable growth.
IDA’s goal is to reduce disparities across and within countries especially in access to primary education, basic health and water supply and sanitation and to bring more people into the mainstream by raising their productivity.
When the International Bank for Reconstruction and Development (IBRD), better known as the World Bank, was established in 1944, its first tasks was to help Europe recover from the devastation of World War II.
Once Europe was rebuilt, the bank turned its attention to the developing countries. As the 1950’s progressed, it became clear that the poorest developing countries could not afford to borrow needed capital for development on the terms offered by the Bank. They required easier terms.
With the US taking the initiative, a group of Bank member countries decided to set up an agency that could lend to very poor developing nations on highly concessional terms. They called the agency the ‘International Development Association’ (IDA).
Its founders saw it as a way for the ‘haves’ of the world to help the ‘have-nots’. But they also wanted IDA to be instilled with the discipline of a bank. For this reason, US president Dwight D. Eisenhower proposed, and other countries agreed, that IDA should be part of the World Bank.
IDA’s articles of Agreement became effective in 1960. The first IDA loans (known as credits) were approved in 1961, to Honduras, India, Sudan and Chile. Since 1960, IDA has lent $107 billion to 106 countries. It lends, on average about $ 6 to 7 billion a year for different types of development projects.
IBRD and IDA are run on the same lines. They share the same staff, the same headquarters, report to the same president and use the same rigorous standards when evaluating projects. IDA simply takes money from a different drawer. A country must be a member of IBRD before it can join IDA; 162 countries are IDA members.
IDA lends to countries that have a per capita income in 2000 of less than $885 and lack the financial ability to borrow from IBRD. At present 79 countries are eligible to borrow from IDA.
IDA credits have maturities of 35 to 40 years with a 10-year grace period on repayment of principal. There is no interest charge, but credits do carry a small service charge of 0.75 % on disbursed balances.