International Development Association (IDA) 19 – Core Contribution 2020-2023

The WBG (including IDA) is one of 15 priority multilateral organizations according to the Strategy for International Cooperation 2021-2024. The five special themes of IDA19 correspond closely to those of Switzerland outlined in the Strategy. During the replenishment negotiations, Switzerland strongly pushed for IDA to make a focused contribution toward the delivery of the 2030 Agenda, adopt ambitious climate and gender commitments, strengthen crisis prevention and migration aspects, and further improve collaboration with partners, especially the UN and in fragile contexts. By expanding its innovative financing model with market capital leverage, IDA19 responds to the Addis Ababa Action Agenda call for development banks to find innovative ways to maximize finance for the 2030 Agenda.

As part of the Bretton Woods Institutions, the WBG has systemic relevance for economic and financial stability, and is a key institution for Switzerland’s foreign policy.

Two years into IDA18 (07/2017-06/2020), IDA has been making solid progress, with 16 out of 46 policy commitments delivered and the rest on track. IDA18 already delivered its renewable energy capacity target, supported 41 countries to institutionalize disaster risk reduction, reached 35m beneficiaries with social safety nets and enabled 27.5m deliveries to be attended by skilled health staff. 66% of IDA operations, including all education projects, now include specific actions to close gender gaps. WB programs also address migration issues more systematically.

76.3% of IDA operations are rated satisfactory and above, exceeding the 75% performance standard, though with lower ratings in fragile contexts and room for improvement in external ratings by clients.

IDA18 committed USD 46.5b or 63% of the envelope in the first two years, a marked increase compared to IDA17, reflecting continued strong demand for IDA’s support. Commitments in fragile countries increased by 153%. All IDA/IBRD financial indicators remain solid.

·       Climate change: Climate change and disaster risk management are mainstreamed into country diagnostics, strategies and relevant operations; IDA resources used for climate change are monitored and reported and show consistent progress towards IDA19 Policy Commitments; the WBG remains an ambitious global leader on the climate agenda.

·       Fragility, Conflict and Violence (FCV): WBG operations in FCS address drivers of fragility and build institutional resilience, based on the Bank’s comparative advantage, sound diagnostics, partnerships with other actors (especially UN), and enhanced in-country presence; the WBG FCV Strategy is operationalized.

·       Jobs and Economic Transformation (JET): More and better jobs that ensure inclusion of youth and women are created; collaboration between IDA and IFC/MIGA is improved and the Private Sector Window is monitored with focus on quality and additionality.

·       Governance and Institutions: Domestic resource mobilization, public expenditure, financial management and procurement in partner countries is improved; illicit financial flows are mitigated; statistical capacities are strengthened; IDA’s Sustainable Development Financing Policy is implemented and monitored.

·       Gender and Development: The WB’s focus on closing gaps between women and men, girls and boys in country strategies and operations is sharpened; data and evidence base to enhance impact towards gender equality is strengthened and utilized.

IDA19 includes major innovations on FCV, debt sustainability and regional programming, which will be closely followed.

For the IDA19 period, Switzerland will monitor the WBG on three broad metrics at the institutional level:

·       Inclusive Growth: IDA/WBG achieve progress on the twin goals of ending extreme poverty (reducing the share of the global population living in extreme poverty to 3 percent by the year 2030), and promoting shared prosperity (increasing the income of the bottom 40 percent of the population in each country) in a sustainable manner.

·       Financial Sustainability: IDA/WBG financial sustainability is ensured, including maintaining net expenses below net revenue and keeping general administrative costs (as a share of lending portfolio) as low as possible.

·       Organizational and Operational Effectiveness: IDA/WBG improves its effectiveness and efficiency at the organizational and operational levels, and successfully implements the new Environmental and Social Framework (ESF) policies. The WBG trust fund system becomes more results-focused, efficient and less fragmented.

Reporting on progress under IDA’s Special Themes, with a particular focus on Switzerland’s direct engagement, will be tracked under Management Level 2 (see below).  

Achievements at the Swiss level have largely been satisfactory, thanks to a continued use of well-informed Board interventions and targeted support to WB initiatives on priority themes.

·     Climate change: Climate change and disaster risk management are mainstreamed into country diagnostics, strategies and relevant operations; IDA resources used for climate change are monitored and reported and show consistent progress towards IDA19 Policy Commitments; the WBG remains an ambitious global leader on the climate agenda.

·     Fragility, Conflict and Violence (FCV): WBG operations in FCS address drivers of fragility and build institutional resilience, based on the Bank’s comparative advantage, sound diagnostics, partnerships with other actors (especially UN), and enhanced in-country presence; the WBG FCV Strategy is operationalized.

·     Jobs and Economic Transformation (JET): More and better jobs that ensure inclusion of youth and women are created; collaboration between IDA and IFC/MIGA is improved and the Private Sector Window is monitored with focus on quality and additionality.

·     Governance and Institutions: Domestic resource mobilization, public expenditure, financial management and procurement in partner countries is improved; illicit financial flows are mitigated; statistical capacities are strengthened; IDA’s Sustainable Development Financing Policy is implemented and monitored.

·    Gender: Swiss support to the Bank’s Umbrella Facility for Gender Equality mobilized more funding for gender operations and better mainstreaming. The collaboration with UN-Women remains little systematic.

Thanks to a CHF 38 million increase compared to IDA18, Switzerland remains a top 10 donor at 10^th place (down from 9^th due to China’s leap to 6^th place). The Swiss burden share is reduced from 2.14% to 2.12%.

The top 5 IDA19 contributors in order of ranking are the United Kingdom, Japan, US (previously 2^nd), Germany and France. China doubled its contribution and is now 6^th biggest IDA donor.

Switzerland collaborated closely with other donors to influence the IDA19 package, especially through EU++ coordination meetings, which allowed for strong messaging vis-à-vis Bank management. Switzerland particularly co-shaped the Bank’s approach to addressing fragility and contributed to joint inputs on governance, climate change and biodiversity. Switzerland successfully led the way to launch a review of the outdated IDA Voting Rights system.