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IDA15 Mid-Term Review Meeting

IDA Replenishments
IDA15 Replenishment Mid-Term
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November 24, 2009 – In the recently concluded three-day Mid-Term review of the 15th replenishment period of the International Development Association (IDA), World Bank management and representatives from 45 donor and 7 borrowing countries advanced a proposal for the creation of a Crisis Response Window in IDA 15 (July 2008 to June 2011).

The new window would help hard-hit governments maintain core spending on health, education, safety nets, infrastructure, and agriculture in the face of short-term shocks that bring declining revenues and budget gaps. The proposal has been gaining momentum following recent calls by G20 and the Development Committee to the Bank to look at alternatives for providing crisis response financing.

“The financial gap created by the global crisis not only jeopardizes the progress made by countries, such as Rwanda, whose governments have been working hard to implement important reforms, it also reduces our chances of achieving the Millennium Development Goals by 2015. A crisis response window in IDA15 will help us mitigate the short-term impacts of crises without sacrificing long-term efforts,” said James Musoni, Rwanda’s Finance and Economic Planning Minister, who participated in discussions about the impact of the crisis on low-income countries.

“We are delighted by the support of donors and partners for the creation of a crisis window within IDA15,” said World Bank Group President Robert B. Zoellick. “We will now be submitting the proposal to the IDA Board of Directors for approval.”

Timely help boosts Zambia’s malaria recovery plan

The need for such a window is essential given how countries, especially from the Africa and South Asia regions, rely on donor contributions to maintain spending on critical programs. For instance, Zambia is a classic example of how IDA’s timely financing helped curtail malarial deaths and mitigate the effects of the disease.

Malaria has been the country’s leading cause of morbidity and the second-highest cause of mortality, with an estimated 4.3 million cases and 50,000 deaths a year. The disease also accounts for 40% of under-5 deaths and is estimated to cost Zambia US$100 million in productivity.

In 2006, the IDA-financed Zambia Malaria Booster Plan was launched. It worked to strengthen the national health system to improve service delivery, increase community demand-driven interventions, and build institutional capacity in the Ministry of Health.

Once the program was implemented, deaths due to malaria plunged by 66 percent. Zambia reached the 2010 Roll Back Malaria target of more than 50 percent reduction in malaria mortality compared to 2000. The malaria prevention coverage increased from 1.2 million to 3.5 million people. Children under-5 suffering from malaria and the disease-related child deaths declined 29 and 33 percent respectively.

“We had very serious problems with malaria until we received assistance from the Ministry of Health,” said Thomas Mpwapwa, Headman, Lubemba Village. “They came and sprayed in all the homes and brought us mosquito nets. Now we enjoy good health, free from Malaria.”

Zambia is one of 18 countries receiving support through the World Bank’s Malaria Booster Program. More than US$460 million have been committed for Phase I of the Government’s Booster Program (2005-2008) — a nine-fold increase from what IDA committed between 2000 and 2005. Of this amount, US$20 million has been marked for the four-year Zambia Malaria Booster Project.

IDA supports several such critical projects and the advancement of the proposal to create a Crisis Response Window is set to protect programs that improve the quality of life in the low-income countries.

Apart from the decision on creating a Crisis Response Window in IDA15, the Mid-Term review evaluated the performance of IDA, which has delivered record support in the current economic crisis. The meeting included discussions on IDA’s policy and financial framework, the impact of the crisis on low-income countries, and measures to ensure swifter and more effective support to countries affected by crises.

The meeting witnessed 15 papers being presented on progress made in some key areas such as increasing climate change activities, boosting infrastructure investment, and providing greater support to post-conflict countries, notably in Africa.

According to Axel van Trotsenburg, Vice President for Concessional Finance and Global Partnerships at the World Bank, progress toward global development goals have been put at risk due to the successive food, fuel, and economic crises affecting the world for the last two years, which also formed some of the major talking points during the Mid-Term review.

“The World Bank has been trying to lean forward and fast-track resources to these countries,” said van Trotsenburg. “The problem is that we still need to do more. We need to mobilize substantial resources on a long term basis to better position our partner countries in Africa and elsewhere to achieve the Millennium Development Goals.”

Record lending and immediate response to crisis

In the first 15 months of IDA15 (July 2008-October 2009), IDA commitments reached a record level of $16.9 billion; a 50 percent increase over the comparable period in IDA14. This reflects a strong IDA15 replenishment size (which increased by 30 percent to $42 billion) as well as IDA’s front-loading and fast-tracking of operations in response to the financial crisis. IDA’s disbursements in the same period were close to $14 billion, with a sharp increase in the first four months of FY10 (July 2009-October 2009) when they reached $4.6 billion compared to $2.4 billion a year earlier.

Africa continued to be IDA’s largest recipient, with 55 percent of total commitments and 46 percent of total disbursements. South Asia came in second, accounting for about a third of commitments and disbursements.

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