World Bank Group
The World Bank Group is Australia's largest multilateral partner and is the world's largest development organisation. The World Bank Group consists of five:
- the International Bank for Reconstruction and Development (IBRD) lends to governments of middle-income and creditworthy low-income and most vulnerable countries
- the International Development Association (IDA) provides interest-free loans – called credits – and grants to governments of the world's poorest countries
- the International Finance Corporation (IFC) provides loans, equity and advisory services to stimulate private sector investment in developing countries
- the Multilateral Investment Guarantee Agency (MIGA) offers political risk insurance (guarantees) to investors and lenders
- the International Centre for Settlement of Investment Disputes (ICSID) provides international facilities for conciliation and arbitration of investment disputes.
The World Bank Group is able to leverage significant financial resources and expertise for sustainable development and poverty reduction. The World Bank Group is an unparalleled source of development analysis and specialist program implementation, and a leading forum for global development policy.
Australia's membership of, and financial contributions to, the World Bank Group provide Australia with the opportunity to influence policies and priorities. An ongoing objective of our relationship is to ensure that the activities of the World Bank Group recognise and actively target key development priorities in the Indo–Pacific region.
The Australian Government supports economic development in the Indo-Pacific region through contributions to the World Bank's International Development Association (IDA). The IDA fund is the largest pool of concessional finance in the world, providing grants and highly concessional loans to 76 low-income countries, including 21 in Indo-Pacific. It is closely aligned with Australia's aid program priorities: promoting private sector development; boosting women's economic empowerment; effective governance; supporting fragile states; and tackling climate change.
Negotiations for the 19th replenishment of IDA (2020-21 to 2022-23) concluded in December 2019. USD82 billion will be available to client countries, through highly concessional loans and grants, to advance sustainable economic development and reduce poverty. The IDA replenishment will help countries in our region meet the Sustainable Development Goals, agreed by the international community in 2015.
Australia will contribute AUD613.36 million to the IDA19 replenishment, which will be drawn from Australia's aid program over a nine-year period. This contribution includes updated obligations to World Bank-managed debt relief schemes (the Heavily Indebted Poor Countries Initiative and Multilateral Debt Relief Initiative).
The IDA19 package is well aligned with Australia’s priorities: maintaining strong financial allocations to the Pacific; measures to incentivise better debt management in IDA countries; engaging the private sector; and stronger commitments on gender equality and disability inclusion, which will ensure a steady supply of multilateral concessional finance to 21 eligible Indo-Pacific countries over the next three years. This will complement our bilateral aid spend.
Australia also partners with the World Bank Group on specific development programs which support Australia's aid policy priorities. On average, Australia co-finances $222m worth of activities with the World Bank Group annually through these partnerships.
In May 2020, the Australian Government published Partnerships for Recovery: Australia's COVID-19 Development Response (2020), which focusses on Australia's COVID-19 Development Response. The Government's shared strategic priorities with the World Bank Group emphasise:
- reducing poverty and promoting prosperity through sustainable economic/income growth
- DFAT's focus on the Pacific region and the Bank's attention to the needs of small and island states
- strengthening private sector development
- prioritising investments and interventions related to good governance, gender equality, innovation, health, education, and infrastructure
- strengthening interventions in fragile and conflict affected states
- ensuring a stronger focus on results and value for money.