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The World Bank Group

Danish multilateral aid channelled through the World Bank helps secure financing and advice that can help achieve the Bank's goal of eradicating poverty and reducing inequality in the world.

The World Bank is a multilateral development institution working to reduce poverty, improve living standards for the world's poorest and promote sustainable growth. Looking ahead to 2030, the World Bank has two overarching objectives:

- End extreme poverty by ensuring that no more than 3% live on less than US$1.25 a day.

- Creating a better future by promoting income growth for the poorest 40% in all countries.

The World Bank Group is owned by 188 member countries and has more than 10,000 staff working in over 120 countries. The World Bank Group consists of 5 organisations: the International Bank for Reconstruction and Development (IBRD), the International Development Association (IDA), the International Finance Corporation (IFC), the Multilateral Investment Guarantee Agency (MIGA) and the International Centre for Settlement of Investment Disputes (ICSID). In recent years, the World Bank Group has undergone a number of reforms, with a focus on strengthening the Bank's effectiveness.

The Bank's main tasks are to provide loans and grants as well as technical assistance and advice to developing countries. The World Bank enables countries with low creditworthiness to borrow money at low interest rates, which can be used to foster development and growth. Loans and grants support development in a wide range of areas, including education, health including the fight against HIV/AIDS, the environment, public administration and infrastructure.  The Bank also manages a number of donor funds that channel funds to development in various areas. In addition, the Bank has programmes aimed at generating growth through support to the private sector. Finally, the Bank is a major resource for policy advice and technical assistance to developing countries. This helps to ensure that the loans and grants it provides have maximum impact. The World Bank's size enables economies of scale and its global reach and broad membership enable it to exercise leadership in both public and private investment and partnerships.

The majority of Danish aid funds channelled through the World Bank are channelled through the IDA, which provides loans and grants on special terms to the poorest countries, as well as working on debt relief for the most indebted of these. IDA operates as a fund that is replenished every three years by donations from rich countries such as Denmark. IDA's priorities are very much in line with Danish development policy priorities, with the 18th replenishment (2018-2020) focusing on climate, gender equality, fragile and conflict-affected states, and inclusive growth. For the period 2018-2020, Denmark has committed approximately DKK 2.165 billion to IDA.

Denmark exercises influence in the World Bank through participation in the Bank's Annual Meetings and Spring Meetings, and in the IDA replenishment process, where priorities for IDA's work are set. Denmark is part of the Nordic-Baltic constituency which together has 5.39% of the votes in the IDA. The Organizational Strategy sets the framework and priorities for cooperation with the World Bank.

 

The International Bank for Reconstruction and Development(IBRD)

IBRD offers loans, guarantees and analytical and advisory services to middle-income countries and creditworthy poorer countries in Latin America, Asia, Africa and Eastern Europe. It provides its clients with access to capital on favourable terms in larger volumes, with longer maturities and in a more sustainable manner than the market. IBRD raises most of its funding by selling bonds on the international capital markets. The surplus generated from IBRD lending is to a large extent used to extend grants and loans on very favourable terms to low-income countries through IDA.

Together with Finland, Norway, Sweden, Iceland, Estonia, Latvia and Lithuania Denmark participates in the Nordic-Baltic constituency. The Nordic-Baltic constituency controls 4.71% of the votes in IBRD, of which Denmark holds 0.83%.

The International Development Association (IDA)

IDA provides grants and loans with 40 year maturity and no interest to the poorest countries to help cover the cost of lifting people out of poverty, including the cost of providing essential services in education, health water and sanitation.

IDA credits are granted to developing countries with a GDP per capita of less than $1,135, and which do not – or only to a limited extend – have access to commercial lending and IBRD loans.

In the fiscal year of 2011 IDA made commitments amounting to $16.3 billion for 228 new operations.

Denmark has contributed to IDA since its inception in 1960, with an overall contribution of 1.4 % of total funding. In total, IDA has provided around $207 billion US $ in credits and grants to low-income countries since its start. At the IDA16 replenishment, covering the period from 2011-2014, Denmark pledged approx. 2.2 billion DKK.

The International Finance Corporation (IFC)

IFC aims to stimulate growth through its support to the private sector. IFC facilitates private investment in regions and sectors not otherwise favoured by private investors.

IFC is the largest single publicly funded source of financing of investments in the private sector in developing countries. It invests in and provides loans to private enterprises. It also provides advice on a range of business related topics and counseling to partners on mobilization of capital. IFC invests in projects which are considered commercially sustainable, but cannot obtain financing or technical assistance from other sources.

Multilateral Investment Guarantee Agency (MIGA)

MIGA supports foreign investment in the developing countries by insuring against non-commercial risks, such as political unrest, currency constraints etc.

The Multilateral Investment Guarantee Agency (MIGA) was created in 1988 as a member of the World Bank Group to promote foreign direct investment in emerging economies. Through emission of guarantees, counseling and legal assistance, MIGA helps developing countries to attract and retain private investment.

The International Centre for Settlement of Investment Disputes (ICSID)

ICSID is an international organ for settlement of disputes arising in connection with foreign investments in the member states of the Bank.

ICSID was established in 1966 as an independent international organization under the World Bank Group. It intermediates in investment disputes between a government and a private foreign investor.

Ministry of Foreign Affairs of Denmark
Danida
Asiatisk Plads 2 
DK-1448 Copenhagen K
Tel. +45 33 92 00 00
Fax +45 32 54 05 33
um@um.dk

 

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