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India likely to get $ 3.5b IDA fund

India may get about $ 3.5 billion in a new funding of $ 20.5 billion sanctioned by 39 donor countries for the International Development Association, the concessionary lending agency of the World Bank, for a period of three years, beginning July 1, 1999.

Representatives of the donors, who met in Copenhagen, Denmark, yesterday, endorsed the 12th replenishment of the IDA, the main source of funding for the poor countries.

In the IDA-11, India's share was about $ 3.2 billion in three years, ending on June 30 last. Indications are that India's share in the IDA-12 would be more than the previous one, reaching about $ 3.5 billion, according to World Bank officials.

Since the IDA funding is for schemes falling under the category of basic human needs, it will not come under the economic sanctions that the US had imposed on India after its nuclear tests in May.

The sanctions apply to non-basic human needs projects, according to officials. New contributions from the donor countries to this package will total $ 11.6 billion, with the rest coming mainly from repayments of earlier IDA credits and contributions from the World Bank.

''Despite the global financial crisis, the agreement shows that support to the poorest countries in the world is on the rebound,'' said World Bank's Managing Director Sven Sandstroem.

Sandstroem, who has chaired the IDA negotiations over the past nine months, told the media in Washington that a large share of the credits would be used for social spending, including health and education, particularly the girls education.

The IDA was established in 1960 to provide assistance to poorer developing countries. It is the main source of development financing for the world's poorest countries.

Donors include Australia, Canada, Czech Republic, Denmark, Finland, France, Germany, Italy, Japan, Saudi Arabia, the United States and the United Kingdom.

IDA credits have maturities of 35 to 40 years with a 10-year grace period on repayment of principal. There is no interest charge but credits do carry a small service charge, currently 0.75 per cent.

There are now 80 IDA-eligible countries, which represent 3.3 billion people, or 80 per cent of the population in developing countries. Forty-one IDA borrowers are in sub-Saharan Africa, but most people -- nearly 2.6 billion-- live in Asia. About 1.3 billion of the peolpe in IDA countries survive on income of less than one dollar a day --the poverty-line determined by the World Bank.

In a statement, the representatives of the donors said, ''The IDA's 12th replenishment will contribute significantly towards a brighter future for the world's poorest people as they enter the 21st century.''

They said, ''IDA, working together with the strong efforts and commitment of recipients and other donors, will help accelerate the pace of human development at this critically important time.''

They agreed that all IDA activities should revolve around the objective of poverty reduction as a key element of support for the borrowing countries' own efforts. Progress on poverty reduction should be measured and monitored in the context of international development targets for the 21st century.

UNI

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