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Financing

For financing purposes, the International Development Association (IDA) groups fragile states in four categories:

     
  • Countries receiving allocations based on IDA’s Performance Based Allocations (PBA) system
  • Countries receiving exceptional post-conflict allocations
  • Countries receiving exceptional allocations upon re-engaging with IDA after a prolonged period of inactivity, but which did not qualify for post-conflict assistance
  • Countries that do not receive any IDA financing because they are in arrears on IDA repayments

Assistance to FCS through IDA

IDA provides financing primarily through the Performance-Based Allocation system, which emphasizes performance, while factoring in country needs. For fragile and conflict-affected countries, particularly post-conflict countries the Bank takes into account the special circumstances of the country.

     
  • IDA13: IDA provided grants to the poorest countries, debt-distressed poorest countries, post-conflict countries, and for HIV/AIDS and natural disasters. Many of these provisions benefited fragile states.
  • IDA14: IDA provided grants based on a country’s risk of debt distress. IDA established policy-determined debt burden thresholds because generally countries with better policies and institutions can carry more debt. Because fragile states have weak policies and institutions, they also have lower debt-carrying capacity and therefore mainly receive grants.
  • IDA15: The World Bank Management committed to a range of actions related to work in fragile and conflict-affected countries: progress on human resources reforms; cooperation with the UN and other development actors; implementation of good practice principles for engaging in and adapting Country Assistance Strategies to fragile and conflict environments; and strengthening IDA support for state- and peace-building activities.
  • IDA 16: The World Bank Management has committed to several monitorable actions. These include, among others, examining the operational implications of the 2011 World Development Report (WDR) on Conflict, Security and Development, and developing plans for enhanced implementation of UN-World Bank Partnership Agreements in several pilot countries. During the IDA16 discussions, Deputies expressed interest in setting up working groups on four topics, including one on fragile and conflict-affected countries. The working groups will provide a forum for learning and informal discussion on the selected themes.

Because of the Multilateral Debt Relief Initiative (MDRI), IDA, the AfDF and IMF all canceled their debt for countries reaching Heavily Indebted Poor Countries (HIPC) completion point. Cancelling the debt freed resources in these countries to meet their developmental needs. See more under Debt (link to ‘Dept’ page)