MR. DONNELLY: Thank you very much. And thank you everyone for joining the call. My name is John Donnelly. I'm the Communications Advisor for Jim Kim, President of the World Bank Group.
We'll set this up first with a statement from Dr. Kim here in Washington. Also on the line though, in Moscow, just after the IDA Replenishment Conference, is Sri Mulyani Indrawati who is chair of the replenishment negotiations, and also the Managing Director and Chief Operating Officer of the World Bank, as well as Joachim von Amsberg, the Vice President for Concessional Finance.
They'll be available for questions after Dr. Kim gives his statement. Over to Dr. Kim.
DR. KIM: Thank you, John. I'm extraordinarily pleased to announce that, at our IDA replenishment conference in Moscow just a few hours ago, countries pledged a record $52 billion dollars for IDA, the World Bank's fund for the poorest countries. This pledge is a historic commitment to the poor.
The fact that this generosity came during a very difficult economic period makes this pledge all the more significant. This represents a 5 percent increase from our IDA replenishment three years ago.
The international community, from the richest countries to the emerging powers, came together to support our goals of ending extreme poverty by 2030 and boosting shared prosperity for the poorest 40 percent of the population in developing countries.
They also bonded to make a statement that this period of economic constraint at home is not the time to look away from the people who are living in extreme poverty, and who need evidence-based and successfully delivered development programs to help lift them out of poverty.
This pledge also comes during a major internal change process at the World Bank Group, which is designed to make us more effective and more efficient. We ourselves have pledged to cut our administrative cost by $400 million dollars in the next three years.
We're making sweeping changes for several reasons, but chief among them is a pledge to our donors to make the most efficient use of every dollar that is entrusted to us.
With this new IDA replenishment pledge today, we now will move forward to increase our efforts in fragile and conflict-affected states in working toward gender equality, in fighting climate change, and in making growth more inclusive and equitable.
If you want to understand what we'll do with this pledge, our blueprint for action already is beginning to take shape. In the last year, for instance, we pledged a combined $2.5 billion dollars to help the Great Lakes region and the Sahel region in Africa.
These pledges, made during joint trips with the U.N. Secretary General Ban Ki-moon, were specifically designed to help those regions move forward with critical development projects that will attract private sector investment, as well as improve the livelihoods of millions of poor people.
I'm personally deeply gratified and humbled by the support of governments and the civil society organizations. We will now get to work with urgency and purpose to help those most in need.
Thank you very much, and I'm now happy to take your questions.
OPERATOR: Thank you. If you'd like to ask a question please dial star one. Once again, please dial star one for questions.
Anna, your line is open. Please tell us your first and last name, and your organization. Thank you.
MS. YUKHANANOV: Hi. Thanks for taking my question. This is Anna Yukhananov from Reuters. Just a really quick -- just to confirm, I think in the past we've said IDA is the world's largest fund for the poorest countries. Just wanted to make sure that's still true.
And then, can you tell me a bit more about the concessional loans, and whether IDA has included concessional loans before, and, kind of, what made you decide that this time it would be a good idea to do that? And what percentage of the $52 billion dollars comes in the form of concessional loan? Thank you.
DR. KIM: Anna, I can confirm that, yes, this is the largest concessional loan window for development for the poorest countries. And I'm going to ask Joachim to give you a brief primer on sort of the details of the IDA process. Joachim?
MS. YUKHANANOV: Thanks.
MR. VON AMSBERG: Yeah. We have constantly tried to build new financial innovation into IDA over the years. We're sure that we could maximize the resources that we're making available to our partner countries.
Now, there are a number of circumstances that have made it particularly attractive to include concessional financing to IDA, meaning concessional loans to IDA in the financing package, and then the option, which our contributing partners can use to contribute to IDA.
Now, these special reasons are the particular fiscal pressures that many of our contributing countries are enduring in many parts of the world. They include the fact that there is an increasing number of recipient countries that are receiving loans at relatively harder terms because they’re relatively more advanced than other countries.
And the global low interest rate environment that makes it possible that concessional loans are made available to IDA that we can then pass on at highly concessional terms to our borrowing countries.
So, we have offered these options to the countries contributing to IDA, and we have seen a significant take-up of those loans. And in fact, out of the $52 billion dollars -- of the total replenishment that Dr. Kim mentioned - a little more than $4 billion has been contributed in the terms of concessional loans to IDA.
So, this means at first that the grand contributions to IDA remain the poor and the most important part of our financing. But it also means that the concessional loans have allowed several contributing countries to scale up their contributions significantly, and has been a critical element in the success of this replenishment, because 4$4 billion out of the 52 is 8 percent, so it's a significant component of the overall funding framework that really allows us to bring more resources to our client countries.
MS. YUKHANANOV: Okay. Thank you. And this is the first time that concessional loans have been part of IDA?
MR. VON AMSBERG: That is correct.
MS. YUKHANANOV: Okay.
MR. VON AMSBERG: It is the first time we've done it. And it has allowed both traditional contributing countries as well as emerging countries to scale up their support.
MS. YUKHANANOV: Okay. Thank you.
OPERATOR: The next comes from Patrick. Again, your first and last name, and your company please.
MR. WELTER: Hi, this is Patrick Welter with German newspaper, Frankfurter Allgemeine Zeitung. I have two questions, President Kim. Maybe you might answer them.
I wonder, last year -- no, not last year, but three years ago, the World Bank made a lot out of the fact that China contributed quite an amount of money to IDA in repaying earlier some debts. And I'm just wondering what is the contribution China and other of the big emerging markets this year to IDA?
And my second question is, in the press release it is mentioned that IBRD and IFC are contributing close to $3 billion dollars to IDA, and I'm just wondering what the amount of money IBRD and IFC gave three years ago to IDA?
DR. KIM: First of all, I can tell you now that the emerging market countries played a very large role this time around. Because we have to take these results and these pledges and present them to the Board first, we won't be able to announce exactly who contributed what until the end of March, but you will have those numbers at the end of March. But I can tell you now that we were extremely pleased with the participation of the emerging market countries.
And I will ask Joachim also to give the details on the IFC and IBRD contribution. But the point I'd like to make is that we -- in other words, with any of the margins that we're making in IFC and IBRD, a significant chunk of those go right back into supporting this concessional loan window.
In other words, we are supporting directly the concessional loan windows with the other parts of our business that are producing margins.
Joachim, can you talk a little bit about the details?
MR. VON AMSBERG: The details are actually very simple. This replenishment was really under the overall guidelines that all partners are to at least maintain the contribution if they want IDA to succeed. In a sense, making a very strong effort to protect the investment for the poorest in very difficult economic and fiscal times.
So, in line with that overall direction of this IDA replenishment, the transfers that have been committed from IBRD and IFC have been held steady, meaning it's the same amount of contributions that were made under IDA16 that are now again foreseen for IDA17.
MR. WELTER: Okay. Thank you.
OPERATOR: Once again to ask a question please dial star one. Anna, your line is open.
MS. YUKHANANOV: Hi. Thanks for taking another question from me. I saw from our storyline in 2010 that 51 countries contributed and this year it was 46. Is that correct? And I don't know if you're able to share which five countries decided not to contribute or if there's any donors that you're particularly excited about this year. Thank you.
DR. KIM: Well, the final tally, Anna, of who contributed and who did not and in what amounts, again, we can't share that until March, because we have to take this through our Board. But you will know that in a few months.
MS. YUKHANANOV: Okay. But is that correct that five fewer countries contributed this year than in 2010?
DR. KIM: I think that's correct. Joachim, is that correct?
MR. VON AMSBERG: That is correct. However, it is well possible that over the next days some of the other contributors still announce contributions, and the number may still change until the March finalization of the document. So I wouldn't take it as a final tally.
MS. YUKHANANOV: Okay. Thank you.
OPERATOR: The next comes from Robin. Your first name, last name, and your organization please?
MR. HARDING: It's Robin Harding of the Financial Times. Thank you for taking the question. Just wondering, given that we've had three years of inflation, and also that part of the replenishment this time is in the form of concessional loans rather than outright grants, is this actually a real terms decline in the resources available to IDA this time? Thank you.
DR. KIM: You know, Robin, we feel that the concessional loans were made in a way that this is -- and the entire $52 billion, of course, of IDA goes directly to the countries. And, so, all of the administrative costs go directly to the countries.
Also, there were some countries who graduated from IDA, Bosnia Herzegovina, Georgia, Armenia, and over time India will transition into graduation. And so we are absolutely delighted because this represents a real increase, and we'll be able to do things, for example, increase our contributions to fragile and conflict-affected states by 50 percent. So, this is a real increase.
MR. HARDING: So there's a real turn of increase in the resources available?
DR. KIM: Absolutely. Yeah.
MR. HARDING: Great. Thank you.
OPERATOR: The next comes from Diana. Your line is open.
DIANA: Hi, yes, Dr. Kim, you said twice now that it will be until March before you can announce the actual countries that are pledging money, but is it fair to assume that the United States is still the largest contributor to IDA, or is there any reason to think that might have changed from the previous replenishment?
DR. KIM: We can't reveal any of this until the end of March. But what we can say is that each of the major donors really stretched to do the best they possibly could in contributing to IDA. This is what’s exciting.
You know, I think -- I want to make the point that it was not at all a foregone conclusion that we'd reach this level. This is an extremely, extremely positive outcome, and I think if you talk to each of the member countries, they will all agree with that assessment.
OPERATOR: The next comes from Marina. Again, your name and your organization.
MS. YUDOGANA: Tatyana Edovina, Kommersant Daily. (Translated from Russian) And here is the question, out of the three possible scenarios which one has been selected? What is the IDA envelope for the coming year, and which programs received more financing? Thank you.
DR. KIM: So, the envelope was the highest one. It was the one that we had all hoped for. We were hoping for a package of $50.5 billion and the fact that we reached 52 is an indication not only did we reach the highest preferred scenario, but we went over it by $1.5 billion in these very difficult times.
And, again, exactly which countries will get what is not clear, but again, the thing to focus on is the policy package here. There were clear priorities in this particular package. One, of course, is the fragile and conflict-affected states.
The other one is gender equality. We're going to build into IDA very specific programs that move us towards creating greater gender equality in the poorest countries.
Climate change adaptation is also another major part of this effort. And all of this will be underpinned by an effort to drive more inclusive growth that will allow us to see real improvement in the incomes of the bottom 40 percent.
So, country by country, the specifics aren't there yet, but the, all groups of countries -- fragile and conflicted-affected states, non-fragile state -- because of this extremely generous commitment will get more dollars.
MS. EDOVINA: Thank you very much.
OPERATOR: Once again, please, to ask a question dial star one. Please dial star one for questions.
Sir, there are no more questions.
DR. KIM: Thank you so much for joining the call and we are extremely grateful for really just the remarkable generosity of both the developed donor countries, traditional developed donor countries, and also the emerging market countries. And, we feel that this statement to us and to the world will allow us to move even more quickly and effectively in both our change process and in our expenditure review and reduction process. Thank you very much.
MR. DONNELLY: Thank you. And this is John Donnelly. We'll send all those on the call a transcript of the call later today. Thank you very much.