International Development Association (IDA) 20 – Core Contribution 2022-2025

The WBG is the largest multilateral development finance institution and a global thought leader on development principles and standards. IDA provides low-cost loans and grants as well as technical assistance to the poorest countries. Its comparative advantage is rooted in the WBG’s cross-sectoral development expertise, its policy dialogue and convening power, and a business model that leverages donor resources.

During the Covid-19 crisis, IDA demonstrated its comparative advantage by delivering a swift and comprehensive crisis response to tackle the pandemic’s health and socioeconomic impacts, working overall well in partnership with UN organisations, regional development banks and other relevant partners. The IDA20 replenishment, advanced by one year to respond to the crisis, assembled a record USD 93 billion financing package, building on IDA’s unique financing model to leverage its balance sheet on capital markets. IDA20 will make an important contribution to responding to the Covid 19 crisis in the poorest countries while maintaining a focus on the 2030 Agenda.

The implementation of IDA19 was marked from the outset by the Covid-19 crisis, which delivered a severe set-back to WBG’s Twin Goals of eliminating extreme poverty and promoting shared prosperity. The WBG swiftly delivered scaled-up emergency financing and technical support to tackle the health and socioeconomic impacts and build back better. In its first year, IDA19 delivered USD 36.7 billion (compared to USD 24bn in IDA18’s first year), 53% of which were dedicated to the Covid-19 response. This included operations to strengthen health systems and pandemic response (reaching e.g. nearly 100 million people  with basic health services), expanded social safety nets (reaching 125 million beneficiaries), emergency support to maintain jobs and businesses, and scaled-up support to fragile states.

Despite the Covid-19 impacts, IDA19 has made strong progress. Out of the 44 policy commitments across IDA19’s Special Themes, 40 were on track to be met by June 2022 (targets for 17 were adjusted to reflect the shorter IDA19 period). In its first year, IDA19 has e.g. delivered broadband internet access for 19 million people, 3.4 gigawatts of renewable energy capacity and 13 large-scale education assessments to improve learning. Outcome ratings, including for fragile states, have continued on an upward trend and remain above the corporate target. All WBG financial indicators remain solid.

Swiss achievements 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: Switzerland made substantive contributions to the WBG Climate Change Action Plan negotiations and was a first-mover in adopting a criteria-based position on fossil fuel investments
• Fragility, Conflict & Violence (FCV): Switzerland co-shaped the WBG’s first FCV Strategy, which has strong prevention and partnership pillars, and closely follows implementation in Swiss priority countries
• Jobs & Economic Transformation: Switzerland consistently engaged for a strong jobs and private sector lens in the Covid-19 response and monitored the Private Sector Window roll-out
• Governance & Institutions: Swiss support and interventions strengthened operations, knowledge creation and dialogue notably on public financial management and addressing rising debt vulnerabilities
• Gender: Switzerland consistently advocated for a strong gender lens in the WBG Covid-19 response, co-shaped a gender non-paper in IDA20 negotiations and contributed to evidence generation

As a leader of a constituency of nine member countries, Switzerland continues to enjoy strong and direct influence in the WBG’s governing bodies. 

Switzerland will monitor the IDA/WBG on four broad metrics at the institutional level:

• Poverty Reduction/Inclusive Growth: IDA/WBG achieve progress on the twin goals of ending extreme poverty and promoting shared prosperity in a sustainable manner
• Financial Sustainability: IDA/WBG financial sustainability is ensured, including maintaining net expenses below net revenue and keeping the share of administrative costs low
• Organizational and Operational Effectiveness: IDA/WBG improves its organizational and operational effectiveness and successfully implements the new Environmental and Social Framework. It works in partnership and coordination with the UN and MDB partners at global and country level
• Focus, Selectivity and Balance between Crisis Response and Long-term Development: IDA/WBG implements an effective Covid-19 response that supports the poor and vulnerable, while operationalizing its green, resilient and inclusive development approach, in particular with support to longer-term reforms and institutional strengthening

Swiss engagement priorities are organized along IDA’s 5 Special Themes and the crosscutting issue of governance: 

• Climate Change: The WBG remains a global leader on climate change by implementing its Climate Change Action Plan, including Parisaligning its portfolio, mainstreaming climate change and disaster risk management, and supporting the transition out of fossil fuels
• Fragility, Conflict & Violence: In fragile situations, the WBG addresses drivers of fragility and builds resilience, based on sound diagnostics, UN partnerships and in-country presence; the FCV Strategy is effectively implemented and monitored
• Jobs & Economic Transformation: More and better jobs are created, including for youth and women; IDA/IFC/MIGA collaboration is improved; the Private Sector Window delivers high-quality investments
• Governance & Institutions: Domestic resource mobilization and public financial management in partner countries is improved; illicit financial flows are mitigated; IDA’s debt policy is implemented and monitored
• Gender: Gender gaps are closing and genderbased violence is tackled through WBG operations, mainstreaming and partnerships; gender data and evidence is strengthened and used to enhance impact
• Human Capital: Under this new Special Theme, WBG/IDA contribute to strengthening high-quality, universally accessible health, education and social protection systems and human capital investments

Switzerland remains a top 10 donor (10^th place) thanks to a USD 42 million increase compared to IDA19. The Swiss gross burden share was reduced from 2.12% to 2.10%.

The top 5 IDA20 contributors in order of ranking are the US (previously 3^rd), Japan, United Kingdom (previously 1^st), Germany and France.

Switzerland coordinated closely with other donors to shape the IDA20 package, notably in the EU++ group. Switzerland’s distinct priorities on partnerships and outcome orientation were supported by many like-minded. Coordination in the Executive Board will remain key during implementation.