International-Business-Dr-R-Chandran-E-book

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IDA
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International Business- Dr. R. Chandran
The International Development Asso- ciation (IDA) is the part of the World
Bank that helps the world’s poorest countries. Established in 1960, IDA
aims to reduce poverty by providing interest-free loans and grants for
programs that boost economic growth, reduce inequalities and improve
people’s living conditions.
IDA complements the World Bank’s other lending arm—the International
Bank for Reconstruction and Development (IBRD)—which serves middleincome
countries with capital investment and advisory services. IBRD and
IDA share the same staff and headquarters and evaluate projects with the
same rigorous standards.
IDA is one of the largest sources of assistance for the world’s 80 poorest
countries, 39 of which are in Africa. It is the single largest source of donor
funds for basic social services in the poorest countries.
IDA lends money (known as credits) on concessional terms. This means that
IDA credits have no interest charge and repayments are stretched over 35 to
40 years, including a 10-year grace period.
Eligibility for IDA support depends first and foremost on a country’s relative
poverty, defined as GNI per capita below an established threshold and
updated annually (in fiscal year 2007: US$1,025).
Some countries, such as India, Indonesia and Pakistan, are IDA-eligible
based on per capita income levels, but are also creditworthy for some IBRD
borrowing. They are referred to as “blend” countries.
Eighty-two countries are currently eligible to borrow from IDA. Together,
these countries are home to 2.5 billion people, half of the total population of
the developing world. An estimated 1.5 billion people there survive on
incomes of US$2 or less a day.
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