International Development Association IDA

International Development Association (IDA)

 

an affiliate of the International Bank for Reconstruction and Development (World Bank).

The IDA was created in 1960 to grant developing countries credits and loans in both freely convertible and nonconvertible currencies on more favorable terms than those offered by the World Bank. In mid-1973 the IDA numbered 112 members. It is headed by a board of governors (the highest organ of management), an executive directorate, and a president. The directorate of the IDA is a permanently functioning executive body. The directors of the World Bank serve as directors of the IDA as well, and the president of the World Bank acts as the president of the IDA. All questions in the board of governors and directorate are resolved by majority vote. Votes are distributed as a function of total subscriptions paid into basic capital. A member country of the IDA has 500 votes plus one additional vote for every $5,000 of its initial subscription. In mid-1973 the basic capital of the IDA totaled $1,061,000,000. The largest sums were $332 million from the United States, $135 million from Great Britain, $55 million from France, $56 million from the Federal Republic of Germany, $42 million from India, and $35 million from Japan. In accord with the procedure for distribution of votes, 17 industrially developed countries in 1972 received 159, 269 votes, or 62.02 percent. The United States had 25.14 percent of the votes; Great Britain, 10.41 percent; the Federal Republic of Germany, 4.32 percent; and Japan, 2.81 percent. The developing nations, which the IDA was established to credit, received 97,523 votes, or 37.98 percent of the total.

Industrially developed countries pay dues in gold or convertible currency. The developing countries pay only 10 percent of their dues in gold or convertible currency, the remaining 90 percent being in the national currency. In order to supplement crediting sources, decisions were adopted in 1964 and 1969 on supplementary subscriptions totaling $1,950,190,000 by the 17 industrially developed countries. IDA loans have noninterest repayment periods, as a rule, of 50 years. Repayment is to begin after ten years, at rates of 1 percent a year for the next ten years and 3 percent a year for the remaining 30. Loans are awarded to the government or, with its guarantee, to bodies of separate administrative units or to private and public organizations. From 1960 to 1971 the IDA agreed to grant 274 loans totaling, $3,340,400,000 to 58 countries. Of this sum the countries of Asia (including the entire Middle East) received $2,374,700,000 (71.1 percent), with $666 million (19.9 percent) going to African countries, $176.7 million (5.2 percent) to Latin America, $11 million (0.5 percent) to Oceania, and $111.8 million (3.3 percent) to the countries of Europe. IDA loans are granted for construction of electric power stations, railroads, and highways and for agriculture.

The IDA pursues the same goals as does the World Bank. It seeks to maintain the developing nations as agricultural appendages to the economies of the industrially developed countries, to create favorable conditions for private foreign capital investments, and to shift to the taxpayers (that is, the working people), the expenditures for the construction of industrial projects that are capital intensive and nonprofitable for private entrepreneurs. This situation attests to the further aggravation of contradictions of the capitalist system, which the ruling circles of imperialist states are attempting to solve at the expense of the developing countries.

REFERENCE

Chizhov, K. Ia. Mezhdunarodnye valiutno-finansovye organizatsii kapitalizma. Moscow, 1968.

G. P. SOLIUS

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