Briefs
A Proposal for IDA-17: Instead of an Income Transfer, Direct the IFC to Invest Its Time, Resources, and Expertise in IDA Countries
3/14/13
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<> VIEW FULL HTMLWhen shareholders meet in spring 2013 for preliminary negotiations for a new replenishment of the World Bank’s International Development Association (IDA), they are likely to ask that the International Finance Corporation (IFC) continue to transfer a portion of its “profits” to IDA.
This practice—a subsidy from the bank’s private-sector lending arm to its concessional sovereign lending window—served its purpose, but it is not the best way for the IFC to contribute to economic growth in IDA-eligible countries.
Instead, IDA’s shareholders should insist that the IFC provide financing and its expertise in a way that fits what it does best—investing in the private sector—while giving the IFC incentives to accelerate what it should do even better—taking greater risks in poorer countries.
