Denmark has announced a significant increase in its contribution to the World Bank's International Development Association (IDA), almost doubling its financial aid pledge to DKK 3,300m (€442.5m). This represents a 40% increase compared to its previous commitment. Denmark is one of 52 countries funding development projects through this initiative, which provides grants and low-interest loans to the world's poorest countries.
The announcement comes ahead of the IDA's final 21st replenishment (IDA21) meeting in December 2024, scheduled to be held in Seoul, South Korea. Prime Minister Mette Frederiksen emphasized the urgency of addressing global development and climate challenges, encouraging other nations to follow Denmark’s lead in supporting the most vulnerable regions, particularly in Africa.
What is the IDA?
The International Development Association (IDA) complements the World Bank's International Bank for Reconstruction and Development (IBRD) by focusing on poverty reduction and sustainable development in low-income countries. Around half of the funding IDA provides is in the form of grants, meaning these countries are not required to repay them.
Global Context and Previous Contributions
Denmark's increased pledge comes after calls from African leaders in April 2024 for ambitious replenishment of the IDA fund, highlighting the role of international cooperation in global recovery and development. The previous IDA replenishment in December 2022 raised $93bn (€83.5bn), aiding 77 low-income countries in their recovery from the COVID-19 pandemic.
World Bank President Ajay Banga praised Denmark’s new commitment, noting that donor contributions are multiplied four times through capital raised in the markets. Former IDA recipient countries like China, Indonesia, and Turkey have since transitioned to donor status, showing the long-term success of the program in fostering development.
Denmark's decision to almost double its contribution underscores the country's continued commitment to achieving the Sustainable Development Goals (SDGs) and meeting the demands of global climate action. As Frederiksen stated, international cooperation is essential to tackle today’s most pressing challenges, with Denmark aiming to lead by example in its approach to global development.
Source: Euronews
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