IGNOU : M.COM : IBO 1 : UNIT 13 : Q - 6. What are the functions and activities of International Development Association? Has the IDA succeeded in its efforts to promote economic development in developing countries ?

 

Ans.   INTERNATIONAL DEVELOPMENT ASSOCIATION

 

International Development Association (IDA), another affiliate of the World Bank, began operations in November 1960. IDA assistance is aimed at the poorest developing countries (i.e. those with an annual per capita gross national product in 1997 of $925 or less. By this criterion, about 70 countries are eligible. Under IDA lending conditions, credits can be given to the countries whose balance of payments could not sustain the burden of repayment required for World Bank loans. Terms are far more favourable than those provided by the World Bank. IDA credits are made only to governments. Credits are for a period of 35 or 40 years, with a grace period of 10 years and carry no interest charges.

IDA'S total financial resources, consisting of member's subscriptions and supplementary resources (additional subscriptions and contributions), are replenished periodically by contributions from the more affluent member countries. In addition, IDA receives transfers from the net earnings of the IBRD and repayments on its credits.

IDA gives priority to the funding for education, an AIDS programme in Africa, the reduction of poverty, economic adjustment and growth, and the protection of the environment. IDA administers a Trust Fund set up as part of World Bank / IMF initiative to assist heavily indebted poor countries.