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Sweden increases IDA funds

24 October, 2008

STOCKHOLM. The Swedish government has decided to allocate SEK 6.1 billion to the International Development Association (IDA) over the period 2008-2017 - about a 33 percent increase, the Swedish Government Offices announced. IDA is the part of the World Bank that focuses on the poorest countries.

“The World Bank and the IDA is one of the most relevant development actors with regard to policy development and funding globally. From a Swedish perspective, the final result of the IDA15 replenishment should be regarded as having been successful, with a clear breakthrough for Swedish policy priorities,” says Minister for International Development Cooperation Gunilla Carlsson.

The total volume of replenishment and the combined resources for loans and donations from the IDA15 in the next three years amount to USD 41.6 billion, USD 25.1 billion of which consists of donor contributions. The Swedish share of the IDA15 is 2.96 per cent, which makes Sweden the tenth largest donor.

Sweden considers that the IDA is a relevant and effective channel for international development cooperation. The IDA gives a strong focus to results-based management and efficiency issues, which are also priority issues for Sweden.

The IDA’s prioritization of Africa (with more than 52 percent of the resources expected to go to African countries), climate and fragile states is well in line with Swedish priorities in development cooperation. The enhanced focus of the IDA15 on the climate is welcomed by Sweden. The climate issue will be integrated into the IDA’s core activities and initiatives will primarily be directed at adaptation measures in the poorest countries, and also to some extent at clean energy and energy-efficiency. Countries that are affected by conflict, termed ‘fragile states’, is another area that has recently been given greater priority in the IDA, and they are one of the World Bank’s six strategic themes.

Almost half of all the countries receiving funds from the IDA are fragile states. In 2007, a new strategy was adopted to increase the World Bank’s flexibility, speed and effectiveness in the area. The World Bank plays a key role when post-conflict countries seek to normalise their economic relations with the rest of the world. The World Bank’s cooperation with the UN on these issues has also been strengthened.

The focus of the recently concluded World Bank annual meeting was the financial crisis. Subjects of discussion were how the World Bank can protect those who are most vulnerable and what action the international community, the International Monetary Fund and the World Bank should take to deal with the crisis.

The Governors were agreed that the most vulnerable people in the poorest countries must be protected and that rapid measures must be taken to calm the financial unrest. It was important to do this without losing the focus of the Millennium Development Goals. The President of the World Bank Robert Zoellick stressed the need for continued support to poverty reduction and for donor countries to live up to their commitments on the volume of development assistance.