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Record US$75 billion commitment to end extreme poverty in the Caribbean

World Bank Group President Dr. Jim Yong Kim said this is a Pivotal step in the movement to end extreme poverty World Bank Group President Dr. Jim Yong Kim said this is a Pivotal step in the movement to end extreme poverty
YOGYAKARTA, Indonesia, Dec. 18, CMC – The World Bank says a coalition of more than 60 donor and borrower governments has agreed to ratchet up the fight against extreme poverty in the Caribbean and other places with a record US$75 billion commitment for the International Development Association (IDA) – the World Bank’s fund for the poorest countries.

World Bankk“This is a pivotal step in the movement to end extreme poverty,” World Bank Group President Jim Yong Kim said. “The commitments made by our partners, combined with IDA’s innovations to crowd in the private sector and raise funds from capital markets, will transform the development trajectory of the world’s poorest countries. We are grateful for our partners’ trust in IDA’s ability to deliver results.”

The Washington-based financial institution said the funding will enable IDA to dramatically scale up development interventions to tackle conflict, fragility and violence, forced displacement, climate change, and gender inequality; and promote governance and institution building.

The funding will also address jobs and economic transformation—areas of special focus over the next three years.

The bank said these efforts are underpinned by “an overarching commitment to invest in growth, resilience and opportunity.”

“With this innovative package, the world’s poorest countries – especially the most fragile and vulnerable – will get the support they need to grow, create opportunities for people, and make themselves more resilient to shocks and crises,” said Kyle Peters, World Bank Group Interim Managing Director and Co-Chair of the IDA18 negotiations. “IDA’s focus on issues like climate change, gender equality and preventing conflict and violence will also contribute to greater stability and progress around the world.”

The World Bank said financing during the IDA18 replenishment period, which runs from July 1, 2017 to June 30, 2020, is expected to support essential health and nutrition services for up to 400 million people; provide access to improved water sources for up to 45 million; provide financial services for 4-6 million ; and enable safe childbirth for up to 11 million women, through provision of skilled health personnel.

The financing will also help train for 9-10 million teachers to benefit 300-plus million children; provide immunizations for 130-180 million children; enable better governance in 30 countries through improved statistical capacity; and add 5 GW of renewable energy generation capacity.

“IDA is writing a whole new chapter in the story of development,” said Dede Ekoue, IDA18 co-chair and Togo’s former Minister of Development. “Together with donors, working hand-in-hand with borrower governments, we are putting forward an innovative, ambitious and responsive package of support that gives hope to the poorest. These interventions will help transform the lives of billions of people living in IDA countries.”

To finance this groundbreaking package, the World Bank said the IDA is proposing the most radical transformation in its 56-year history.

For the first time, it said the IDA is seeking to leverage its equity by blending donor contributions with internal resources and funds raised through debt markets.

By blending concessional contributions from donors with its own resources and capital market debt, the World Bank said the IDA will significantly increase the financial support it provides to clients.

“The innovative financing package offers exceptional value for money, with every $1 in partner contributions generating about $3 in spending authority,” said Axel van Trotsenburg, World Bank Vice President for Development Finance. “It is one of the most concrete and significant proposals to date on the Addis Ababa Action Agenda—critical to achieving the (UN) 2030 Sustainable Development Goals.”

The World Bank said the additional financing will enable IDA to double the resources to address fragility, conflict and violence (more than US$14 billion), as well as the root causes of these risks before they escalate, and additional financing for refugees and their host communities (US$2 billion). Increased financing will help strengthen IDA’s support for crisis preparedness and response, pandemic preparedness, disaster risk management, small states and regional integration.

Efforts to stimulate private sector development in the most difficult environments, at the core of job creation and economic transformation, will receive a major push in the form of a new US$2.5 billion Private Sector Window (PSW), the World Bank said.

It said the PSW, being introduced together with the International Finance Corporation (IFC) and Multilateral Investment Guarantee Agency (MIGA), will help mobilize private capital and scale up private sector development in the poorest countries, particularly in fragile situations.

The funds will also help governments strengthen institutions, mobilize resources needed to deliver services, and promote accountability, the World Bank said.

It said a total of 48 countries pledged resources to IDA; additional countries are expected to pledge in the near-term. The World Bank said it is continuing the tradition of contributing its own resources to IDA.

“One of the extraordinary things about IDA is that it brings different countries together to help the poorest. In this replenishment in particular, we’ve really seen that IDA is truly a global coalition,” said van Trotsenburg.

  • Countries: Caribbean

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