Rio De Janeiro (TDI): US President Joe Biden pledged a record $4 billion contribution to the World Bank’s International Development Association (IDA) fund, aimed at supporting the world’s poorest countries.
The announcement was made during a closed session at the Group of 20 (G20) summit in Rio de Janeiro, according to a senior Biden administration official, Reuters reported.
This new commitment, spanning three years, surpasses the previous $3.5 billion contribution made by Washington in December 2021.
The US Treasury is leading the negotiations for the fund’s replenishment, with the pledging conference scheduled for December 5-6 in Seoul.
The IDA, which provides grants and low-interest loans to impoverished nations, faces increased demand amid mounting challenges such as crippling debt, climate disasters, and conflicts, particularly in Africa.
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World Bank President Ajay Banga has set an ambitious target of exceeding the $93 billion replenishment achieved in 2021, with hopes for a record $120 billion funding round.
However, Biden’s pledge raises questions about its continuity under President-elect Donald Trump.
Known for advocating spending cuts, Trump, alongside Tesla and SpaceX CEO Elon Musk, has proposed a government efficiency panel to review expenditures, including foreign aid.
A decision by Congress to appropriate funds for the IDA contribution may not occur until after Trump assumes office in January.
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US Deputy National Security Adviser Jonathan Finer described the pledge as “historic” during a briefing at the G20 summit.
Finer also announced plans for a bilateral clean energy partnership, which Biden will launch during his meeting with Brazilian President Luiz Inacio Lula da Silva.
Biden’s $4 billion commitment represents a 14.3% increase over the 2021 pledge.
Spain and Denmark have also announced significant increases in their contributions to the IDA fund, with Spain committing $423 million, a 37% rise, and Denmark boosting its contribution by 40% to $492 million.
As the December pledging conference approaches, the focus remains on whether global donors will meet the ambitious targets set by Banga to address the escalating needs of vulnerable nations worldwide.
