Recently, the World Bank’s International Development Association (IDA) released their plans for IDA21, including for the Window for Host Communities and Refugees (WHR), now placed under a new umbrella: the Global Regional and Operational Window (GROW).
By way of background, in 2016, the World Bank launched the $2 billion Regional Sub-Window for Refugees and Host Communities (RSW) under IDA18. It was redesigned as the $2.2 billion WHR under IDA19, and it continued under IDA20 with $2.4 billion available. Negotiations over IDA21 have taken place over the past year and some of the plans are still tentative (for example, the UK’s pledge amount is “under review”), but the overall framework is now available.
Countries are eligible for WHR funding if they host refugees (at least 25,000 or 0.1 percent of the population), have an “adequate protection framework,” and have “a strategy or action plan… that describes the concrete steps, including possible policy reforms, that the country will undertake toward long-term development solutions that benefit refugees and host communities.” To date, 19 countries have access to WHR funding.
We at CGD have long engaged with the WHR. We have consistently argued that the World Bank has a unique role to play in supporting medium- to long-term development interventions in refugee-hosting countries, encouraging the integration of refugees into national systems, and pushing for de jure and de facto changes. As large bilateral development donors such as the US and UK scale back their support to refugee-hosting countries, the funding provided by the World Bank is becoming increasingly important.
It was therefore worrying to be involved in replenishment discussions ahead of IDA21 about dismantling the WHR. Under “SimplifIDA”—the World Bank’s push to reduce the complexity of IDA—there was a risk that the WHR would be consumed within a wider regional window, losing its ring-fenced allocation and focus on refugees and host populations.
So, what do the new IDA21 plans lay out? Overall, it’s effectively the same as the draft released in November, which we commented on at the time.
The Good
The WHR retains its allocation of at least $2.4 billion, its eligibility criteria, and its focus on refugees and host populations. The terms remain generous: half of the funding for WHR projects comes from grants, and the other half uses the same concessionary terms as other IDA projects. These were our recommendations, and we are heartened to see them taken up.
The WHR is a sub-window again, under the broader “Global Regional and Operational Window” (GROW). This sub-window status could be positive: $2.4 billion is ring-fenced for WHR projects, and additionally, the WHR could draw on GROW’s remaining $13.5 billion. Maintaining the nominal allocation, with the opportunity for more, will give the World Bank more leverage in their negotiations with client governments.
The Bad
The WHR has lost two important elements. First, under IDA20, the WHR committed that at least 60 percent of eligible countries would make “significant policy reforms.” This focus on policy change is critical: of the 17 WHR-eligible countries we scored, 13 significantly restricted refugees’ labor market access in 2022. It was dropped, along with commitments in other areas, as part of “SimplifIDA.”
Instead, an indicator in the IDA scorecard is “millions of displaced people and people in host communities provided with services and livelihoods.” It is unclear how this will be measured: will refugees and host communities be disaggregated; and what is the target to benchmark success? The requirement for a development-oriented action plan remains, but our interviews with stakeholders suggest these carry little weight. Hopefully, the WHR will continue to push for inclusive policies, but the absence of an explicit commitment raises significant concerns that progress will stall.
Second, in previous IDA cycles, host countries were required to finance 10 percent of WHR projects with their performance-based allocation. Refugee integration is almost always a low priority or point of contention; the contribution was a modest screening mechanism to demonstrate the host country’s commitment to the project’s goal. At the request of host countries, this requirement was also scrapped. We worry that with no “skin in the game,” some countries will take the money but not fully engage with the refugee-facing elements of WHR-funded projects.
Going Forward
As IDA faces a tougher financing climate, it will be imperative for the WHR to demonstrate impact on refugees’ well-being and justify its continued ring-fenced existence under the GROW window. To do this, it must deploy the tools at its disposal to link financing to policy change and hire more dedicated staff to drive forward an agenda that improves outcomes for refugees and host communities alike. These recommendations (and many more!) are contained in our forthcoming report on the WHR.
