World Bank management and representatives of 45 donor and 12 borrowing countries last Friday concluded a three-day review of the performance of the International Development Association (IDA), the World Bank's fund for the 79 poorest countries, that has delivered record support during the global economic crisis.

The three-day review of the 15th replenishment period (IDA15), which covers funding from July 2008 to June 2011, included discussions on IDA's policy and financial framework, the impact of the crisis on low-income countries, and measures to ensure swifter and more effective support to countries affected by crises. In particular, the group advanced a proposal for the creation of a Crisis Response Window in IDA15.

"We are very encouraged by donors' and partners' recognition of IDA's overall performance and effective response to the global economic crisis," said World Bank Group President Robert B. Zoellick. "Although IDA operates under a fixed, three-year financial envelope, we have leaned forward, including through front-loaded and fast-tracked assistance, to scale up support to poor countries severely hit by the crisis. As a result, IDA's lending commitments in the course of IDA15 have hit record levels."

Following recent calls from the G-20 and the Development Committee, the Mid-Term Review of IDA15 advanced a proposal for the creation of a dedicated crisis response window in IDA to assist low income countries mitigate the impact of the global economic crisis.

"The financial gap created by the global crisis not only jeopardizes the progress made by countries, such as Rwanda, whose governments have been working hard to implement important reforms, it also reduces our chances of achieving the Millennium Development Goals by 2015. A crisis response window in IDA15 will help us mitigate the short-term impacts of crises without sacrificing long-term efforts," said James Musoni, Rwanda’s Finance and Economic Planning Minister, who participated in discussions about the impact of the crisis on low-income countries.

"We are delighted by the support of donors and partners for the creation of a crisis window within IDA15," said Zoellick. "We will now be submitting the proposal to the IDA Board of Directors for approval."

"While there are signs of recovery in developed countries, the risk of deepening poverty remains real in IDA countries." said Ngozi Okonjo-Iweala, World Bank Managing Director and Chair of the IDA15 Mid-Term Review. The crisis response window in IDA15 would provide additional funding for the protection of core spending on health, education, safety nets, infrastructure and agriculture in IDA-only countries.

Record lending and effective response to the crisis

In the first 15 months of IDA15 (July 2008-October 2009), IDA commitments reached a record level of US$16.9 billion; a 50 percent increase over the comparable period in IDA14. This reflects a strong IDA15 replenishment size (which increased by 30 percent to US$42 billion) as well as IDA's front-loading and fast-tracking of operations in response to the financial crisis. IDA's disbursements in the same period were close to US$14 billion, with a sharp increase in the first four months of FY10 (July 2009-October 2009) when they reached US$4.6 billion compared to US$2.4 billion a year earlier.

Africa continued to be IDA's largest recipient, with 55 percent of total commitments and 46 percent of total disbursements. South Asia came in second, accounting for about a third of commitments and disbursements.

(China Development Gateway November 23, 2009)