Article Of Agreement Ida

Until the end of January 1960, fifteen countries signed the articles of the Treaty establishing the International Development Association. The association started in September of the same year with an initial budget of $913 million ($7.1 billion in 2012). [14] [15] Over the next eight months after its introduction, IDA increased to 51 Member States and provided $101 million to four developing countries ($784.2 million in 2012). [10] Each organization of the World Bank Group operates according to procedures defined in its contractual articles or according to an equivalent government document. These documents describe the terms of membership and the general principles of organization, management and operations. Developing countries were increasingly frustrated at not being able to afford IBRD loans and saw the Marshall Plan as a relatively generous gift to European nations. In the late 1940s and early 1950s, developing countries began calling on the United Nations to create a development agency that would provide technical assistance and concessional financing, with a particular desire for the Agency to comply with the Convention of other UN bodies in each country that has a voice, not a weighted voice. However, the United States ultimately rejected such proposals. Increasingly concerned about the growth of the Cold War, the United States made a concession in 1954, at the request of its Department of Foreign Affairs, by supporting the design of the International Finance Corporation (IFC). Despite the introduction of the IFC in 1956, developing countries continued to call for the creation of a new funding mechanism and the idea intensified within the IRD. [11] IBRD President Eugene R. Black, Sr. began spreading the idea of an International Development Association, contrary to the idea of a united Nations-run concessionaire called the Special United Nations Fund for Economic Development (SUNFED).

[12] Paul Hoffman, the former administrator of the Marshall Plan, proposed the idea of an interest facility within the World Bank, where the United States would have a casting vote in the granting of such loans. Democratic Senator Mike Monroney of Oklahoma supported the idea. [12] As chairman of the Senate Subcommittee on International Finance, Monroney proposed a resolution recommending a study on the possible creation of an International Development Association to be attached to the I IBRD. [10] Monroney`s proposal was more preferred in the United States than SUNFED. [11] The resolution was passed in 1958 by the Senate and then by the United States. Finance Minister Robert B. Anderson encouraged other countries to conduct similar studies. In 1959, the World Bank`s Board of Governors approved a U.S.-born resolution calling for the drafting of the statutes. [10] SUNFED then became a special fund and merged with the Expanded Technical Assistance Programme for the United Nations Development Programme. The ICSID Convention came into force through a multilateral agreement and came into force on 14 October 1966. IDA provides loans to countries to finance projects to develop infrastructure and improve education, health care, access to clean water and sanitation, and environmental responsibility. [32] [41] It is considered the World Bank`s soft window of credit, while the IBRD is seen as the hard window of credit.

[42] [43] The association proposes grants and loans lasting 25 to 40 years, maturities of 5 to 10 years and interest rates of 2.8% or 1.25%, depending on whether the borrower is a mixed country and to what extent it is eligible. Regular borrowers eligible for IDA can benefit from non-interest-related loans. [44] Financial resources are allocated to eligible countries on the basis of their success in implementing domestic policies that promote growth and poverty reduction.