Publish Date : 26-Feb-2018
On February 21, the Japan International Cooperation Agency (JICA) signed a loan agreement with the International Development Association (IDA) in Washington, DC, to provide a Japanese ODA loan of up to 292.38773 billion yen for the Loan for the International Development Association 18 Replenishment. This is the second Japanese ODA loan to IDA, following the Loan for International Development Association 17 Replenishment.
The loan will provide funding to IDA [1], which is part of the World Bank Group (WBG) [2], with the objectives of allowing IDA to secure resources for its activities during the IDA18 period (July 2017 to June 2020) and contributing to development assistance projects implemented by IDA.
With the two goals of ending extreme poverty and promoting shared prosperity, the WBG aims specifically to reduce the rate of extreme poverty (living on less than $1.90 per day) to no more than three percent by 2030 and to promote income growth amongst the bottom 40 percent of income earners. Although the global population living in extreme poverty has greatly decreased due to high economic growth and investments in education, health care and the social safety net in developing countries in recent years, much poverty remains, particularly in Africa and South Asia. The extreme poverty rate has been estimated as being approximately 10 percent of the global population, or approximately 770 million people, in 2015. Such extremely poor people live in environments where they are vulnerable to external shocks, such as climate change, conflict and violence, and support is needed to strengthen resilience against such external shocks in order to reduce extreme poverty.
The scale of the IDA18 replenishment will be the largest ever at $75 billion. The contribution by Japan for the current replenishment will comprise partner contributions (grants) and concessional partner loans, the latter of which will be provided by the loan.
IDA selected "Toward 2030: Investing in Growth, Resilience and Opportunity" as the overarching theme for IDA18, with the special themes of: 1) climate change, 2) gender and development, 3) fragility, conflict and violence, 4) jobs and economic transformation, and 5) governance and institutions. IDA determines the resource allocation for each recipient country after taking into consideration IDAs Country Performance Ratings on policy and institutional assessments, population and gross national income (GNI) per capita. The resources are utilized for projects/programs that contribute to sustainable economic growth and the eradication of poverty in accordance with the World Banks country assistance strategy and the five special themes.
Along with the WBGs International Bank for Reconstruction and Development [3], IDA is an important partner for JICA to carry out development cooperation. To date, JICA and the WBG have provided support to projects contributing to socioeconomic development in developing countries and to improving policies and organization, and have carried out co-financing for projects in many countries. JICA will continue providing such cooperation and promote effective support for developing countries.
1: The International Development Association (IDA) extends concessional (very long-term, low-interest) loans and grant assistance primarily to countries with a low income level (a GNI per capita of less than $1,165) and a higher poverty rate. Seventy-five countries are eligible for IDAs support. IDAs resources are replenished every three years.
2: The World Bank Group consists of five institutions: the International Bank for Reconstruction and Development (IBRD), the International Development Association (IDA), the International Finance Corporation (IFC), the Multilateral Investment Guarantee Agency (MIGA), and the International Center for Settlement of Investment Disputes (ICSID).
3: The International Bank for Reconstruction and Development (IBRD) is an institution that extends loans to the governments of developing countries. IBRD provides assistance to developing countries which enjoy a higher level of income than IDA recipient countries.
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