International Development Association
International Development Association

The IDA was organized by the World Bank in 1960 to provide additional financial assistance to the poorest developing countries. In order to provide resources on better terms than those that are available from the World Bank, the IDA provides special “credits.” These credits are zero-interest loans that have longer payment periods of 35 to 40 years and a grace period of 10 years. These types of loans are offered to the poorest countries to help them pursue their development goals, sometimes despite disease and conflict.

To help developing countries with these issues, the IDA has established a framework that emphasizes six core principles.

  1. The IDA seeks to promote growth through macroeconomic policy, especially in rural and private sector development.
  2. The IDA concentrates on social issues such as gender equality and public health.
  3. The IDA works to improve governance by assisting in public management and in combating corruption.
  4. The IDA strives for sustainable development projects that help protect the environment.
  5. The IDA fosters recovery efforts in post-conflict countries.
  6. The IDA promotes economic integration through regional trade.

Examples of IDA projects include the following:

  • In Tanzania, since 1995, the IDA has allocated US $3.2 billion, which has caused an annual increase of five and six percent in the GDP, and the GDP per capita has doubled. All of this has greatly improved the standard of living  (IDA and Tanzania, n.d.).   
  • In Bhutan, the IDA gave a 10-year, $31 million credit for construction of rural schools and curricula development (Access to markets and services increases in rural Bhutan, n.d.).
  • 6.5 million people in India’s Andhra Pradesh region gained access to credit, up from less than 500,000 in 2000 (Results at-a-glance, n.d.).

For more on sustainable development, read the Development Issue in Depth (Sustainable Development) and the Environment Issue in Depth  (Is Sustainable Development the Way Forward?).

 

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