A Brief Look at the Role of the International Development Association

The international development association functions as a subsidiary for institutional financing of the World Bank in providing financial aid to some of the world’s poorest countries. The international development association was established in 1960 to reduce poverty in the world by helping with low-interest loans, commonly known as credits, to assist the programs meant to boost financial growth, improve people’s living conditions and reduce inequalities. This article will deliver you a comprehensive knowledge of the role of the International development association in providing financial support to countries in need.

International Development Association

The international development association, also known as IDA, pertains to a financial institution offering concessional and low interest to zero-interest loans and grants to empower some poorest developing countries of the world with its financial aid. IDA is a subsidiary of the World Bank group of the United States. It has its headquarters in Washington DC and complements the existing International Bank for reconstruction and development for providing financial aid to countries with issues like the lowest gross national income, high credits, or a poor financial situation. The International Bank for reconstruction and development with the international development association results in the World Bank. Both these organisations are under the same executive leadership with the same workforce. 

The Mission

The international development association aims for institutional financing to reduce poverty by providing a low-interest rate for affordable development with finance to countries that cannot afford debt or are in huge credit. The international development association helps Nations cope with their poverty and sustain development more effectively and quickly. It stands to be the single fund provider on a large scale for developing countries with a generic need for human and economic development. Statistically speaking, from 2000 to 2010, the International Development association funded projects including 3 million trained teachers, medical support for 310 million children, and a loan of 792 million dollars. 

History of the International development association

It was between 1940 and 1950 when several countries realised they were not in the position to borrow any capital from the International Bank for reconstruction and development due to their low income. The president of The United States arranged an advisory to carry out his Four-point program.

The advisory came up with the recommendation of an international organisation with the opposition between the International Bank for reconstruction and development to capitalise on the gap between strictly granted and strictly loaned funds. This led to the birth of the international development association to function as a subsidiary of the World Bank to sanction zero or low-interest credits for low-income countries to carry out their human and economic development without getting into the thrust of credits with institutional financing.

Operation and governance of the International development association

Now that you have become familiar with the concept of the international development association, the picture of its position as a mediator to sanction financial aid to low-income countries and facilitate their economic and human development.

Let us shed some light on the operation and governance of the international development association. The same board of governors operates the association as the World Bank. The annual meeting consists of one member from each member country, and this member happens to be the Governor or finance minister. The executive directors collectively represent all 187 members of the World Bank, and the board of directors comprises 25 executive directors led by the president of the World Bank group.

List of countries that have the eligibility for IDA lending 

While understanding the role of the International development association, it becomes important to understand the countries that have the green light for IDA Fin aid. Here is the list of countries that get financial support from the international development association and the year they sought their eligibility for institutional financing.

However, these are not the only countries that are landing resources from the International development association. There are plenty of other countries eligible for international development association financial aid.

Conclusion

The International Development Association is a specialised agency of the United Nations that affiliates financially and legally as a distinct organisation from the International Bank for reconstruction and development. The international development organisation was set to motion in September 1960 to work forward as a financial aid provider to countries with poor income and development issues. This article covers the role of the International Development Association and a brief list of the countries that are eligible for the IDA funding.