Spain has announced an early financial commitment of €400 million to the World Bank’s fund for low-income countries, International Development Association (IDA).
The increase compared to the previous IDA replenishment cycle, brings Spain’s total contribution to over €5 billion since IDA’s creation.
The announcement was made on the sidelines of the World Bank Group (WBG)/International Monetary Fund (IMF) Annual Meetings and comes weeks ahead of the final 21st replenishment (IDA21) meeting in December.
It comes at a time of multiple crises, including high debts and repayment challenges, which are taking a disproportionate toll, particularly on low-income countries.
A new World Bank report shows, the world’s 26 poorest countries are more in debt than at any time since 2006, with an increasing vulnerability to natural disasters and other shocks.
At the announcement of the financial commitment, Mr Carlos Cuerpo, Spain’s Minister of Economy, Trade and Business, expressed the hope of other countries doing the same to bolster much-needed financing to fight poverty and inequality.
“This commitment exemplifies Spain’s resolve and dedication to achieving the Sustainable Development Goals, and our belief in IDA’s ability to move the needle.”
Mr Cuerpo has urged other developed countries to adopt similar pause clauses ahead of the United Nations’ fourth International Financing for Development Conference next year in Seville, Spain.
“IDA is a critical partner for the countries most in need, wielding powerful weapons against poverty: affordable financing and development knowledge,” said World Bank Group President Ajay Banga.
He stated that Spain’s commitment would help IDA continue its work to engender stability, security, investment opportunities, trading potential, and jobs.
In an effort to free up resources to vulnerable economies, Spain added contingency clauses to its official loans earlier this year, enabling them to pause debt service payments in cases of natural disasters, food or health crises.
The year-long IDA21 replenishment process culminates in December with a final pledging meeting in Seoul.
The most recent replenishment, IDA20, yielded a $93 billion package to finance projects that boost economic growth, build resilience, and improve lives in developing countries.
GNA