User:Dmahasin/Anthropology of development

The World Bank and the development regime

The World Bank Group consists of multiple institutions including the International Development Association (IDA), the International Finance Corporation (IFC), the International Bank for Reconstruction and Development(IBRD), and the Multilateral Investment Guarantee Agency (MIGA). IDA credits as well as IBRD loans support both development projects, and structural adjustment programs alike.

The IDA of the World Bank Group was created in 1960, per urgent request of U.S. President Dwight D. Eisenhower. The IDA gave the Bank the resources and mandate it required to address the issues of the poorest countries and their citizens. This institution served as a channel for the more economically stable nations of the world to assist those with less financial stability by providing long-term loans at no interest to the most economically-challenged among developing countries. The IDA’s concessional financing by 138 countries is mainly exclusive to countries that have a per capita income of $400 or less (no more than about $900) and lack the financial means to borrow from the IBRD, the main lending institution of the World Bank. Loans issued by the IDA carry maturity dates of 35 or 40 years from the date of issue, with a 10-year grace period on the principal repayment. In the fiscal year of 1989, total lending for the World Bank was approximately $23.06 billion.

Per present day, more than 2.5 billion people, more than half of the developing world representing 79 countries, have the eligibility to borrow from the IDA. Since its creation in 1960, the IDA remains the single largest source of donor funding for social services at a basic level; including health, clean water, sanitation, education, and infrastructure to the world’s impoverished nations.

In the 1950’s, many of these nations were newly independent from colonial rule, therefore suffering from economic and political instability and an inability to afford development loans on the typical terms offered by the World Bank. Utilizing the same criteria to evaluate loans as the IBRD facility of the World Bank, the IDA’s development regime pursues funding projects that protect the environment and build needed infrastructure. They also aid the betterment of conditions supporting the development of private industries, and support reforms that function to liberalize countries’ economies. Since its establishment in 1960, the IDA has lent $106 billion to 106 countries to fund the basic needs of billions of poverty-stricken peoples.

IDA lending for Fiscal Year 1989 (FY89) totaled at $4.9 billion in credits and broken down by region: 48% to Africa, 44% to Asia, and 8% to Europe, the Middle East, and Latin America.

IDA lending for FY89 by sector approximates as follows: 29% agriculture; 24% structural and sector adjustment lending; 16% transportation and telecommunications; 10% energy; 9% education; 5% population, health, and nutrition; 4% water supply and sewage.

Success of the IDA

On a major scale, the global development community has been impacted by the IDA, with success rates that compare favorably with both public and private sector investments around the world. Thirty-two countries that borrowed from the IDA have resulting growth and development beyond the point where they have lost their eligibility to use IDA funds, granting them “graduate” status from the IDA.

The Concerns of the IDA

Members of the IDA community, including the IDA’s most avid supporters, have raised criticisms concerning IDA policies, effectiveness, and resources. There is much room for improvement in the IDA’s track record, namely for its support in Africa. A number of policy reforms instituted by a number of African countries had failed to obtain desired results. The specific failures lay in the decline in export prices coupled with the emerging restrictions on the import of African goods, done by some of the industrialized countries. The World Bank providing service to Africa by enhancing its pursuit in its current development strategy was insufficient in placing its nations on a secure path of development.