David Lawder
WASHINGTON (Reuters) – Donor countries have pledged a record $100 billion in three-year replenishment of the World Bank’s fund for the poorest nations, providing a vital lifeline to their struggles against massive debt, climate disasters, inflation and conflict.
The World Bank made the announcement early Friday in Seoul at a pledging conference of the International Development Association, which provides grants and very low-interest loans to about 78 low-income countries.
The total exceeds the previous IDA top-up of $93 billion announced in December 2021. Countries will contribute about $24 billion directly to IDA, but the fund will issue bonds and use other financial leverage to expand this to a target of $100 billion in grants. funds and loans until the middle of 2028.
But the promising two-day conference fell short of the $120 billion target sought by some developing countries, in part because the strength of the dollar – boosted by Donald Trump’s victory in the US presidential election – reduced the dollar value of a significant increase in foreign exchange contributions from several countries.
At the G20 leaders’ summit in Brazil last month, Norway increased its pledge by 50% from 2021 to 5.024 billion kroner. That’s $455 million at the current exchange rate, but at the start of 2024 it would be worth $496 million.
South Korea increased its pledge by 45% to 846 billion won ($597 million), Britain by 40% to 1.8 billion pounds, while Spain increased its contribution to 400 million euros, pledged $423 million – $10 million less but today it was published in October.
US President Joe Biden pledged a US contribution of $4 billion, up from $3.5 billion in the previous round.
(This story has been corrected to correct South Korea’s dollar pledge to $597 million, not billions, in paragraph 6)
