By The White House | Created at 2024-11-22 01:21:14 | Updated at 2024-11-22 07:48:09
6 hours ago
This week, President Biden announced the U.S. intent for a substantial increase in the U.S. contribution to the International Development Association (IDA), the arm of the World Bank that supports the poorest and most vulnerable countries. The United States will pledge $4 billion over three years to the ongoing IDA replenishment, subject to Congressional approval, sustaining the U.S. position as the largest historical donor to IDA and joining other countries that are stepping up to assist IDA recipients with critical, sustainable investments in their development.
Just as President Biden has championed a domestic economic agenda built around investing at home, he is determined to unlock the resources needed for developing countries to similarly invest in their futures. High debt burdens, exacerbated by the COVID-19 pandemic and the food insecurity crisis fueled by Russia’s war against Ukraine, have put these critical investments out of reach for too many developing countries. As a result, many countries are facing difficult choices between paying back creditors and making critical investments in their economy and people—like vaccinating children, building more resilient and sustainable food systems, and addressing the damaging effects of climate change. At this moment of need, we need to scale up the amount of concessional finance available to these countries, while all other creditors need to step up to keep money flowing as well.
IDA is a key source of grants and highly concessional lending that provides net positive flows and helps to fill the investment gap. It is the single largest source of concessional finance to the poorest and most vulnerable countries, and a vital provider of financing for countries with heavy debt burdens. IDA offers support for policy reforms in conjunction with financing, with this replenishment sharpening the focus on boosting resilience by addressing the impacts of climate change, pandemics, and fragility and conflict, while continuing to invest in sustainable infrastructure, quality jobs, inclusion, gender equality, good governance, food security and nutrition, and access to basic services. A strong IDA builds on the initiative that the Biden-Harris Administration has spearheaded to equip the multilateral development banks to help countries better address global challenges so that they can accelerate progress on reducing poverty and achieving the Sustainable Development Goals.
In addition to the U.S. pledge, President Biden is urging existing donors to follow his example by stepping up support and calling on new donors to start contributing. The leaders of developing countries have been loud and clear in calling for more concessional financing. IDA represents the most impactful opportunity for the international community to respond to this urgent request.
To complement his support for IDA, President Biden has pursued a bold agenda calling on the international financial institutions, bilateral creditors, and the private sector to step up support for countries with ambitious investment and reform plans that are unable to invest in their own futures due to debt service burdens. President Biden outlined this agenda in the Nairobi-Washington Vision he launched with President Ruto of Kenya in May. At the Rio Summit, he pressed the G20 to take action on this plan so that developing countries’ stepped-up investments supported by IDA and other multilateral assistance providers are not undermined by free-riding creditors. As part of this strategy, the U.S. government is deploying its multilateral and bilateral tools to step up financing for countries with heavy debt burdens, providing a pathway for sustainable growth and development.
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