TOKYO, Dec.15 (Reuters) – Japan has pledged $ 3.4 billion as its largest contribution to the World Bank’s International Development Association (IDA) to secure recovery for low-income countries after the COVID-19 pandemic, finance ministry officials said. Tuesday.
The pledge came as Japan hosted an online meeting on the 20th IDA Replenishment, one-year ahead of the world’s third-largest economy, amid concerns over lack of funds to boost vaccines and medical systems.
The agenda of IDA, the largest provider of concessional aid, ranges from tackling global health, climate change and natural disasters to debt transparency in developing countries.
“The time has come for global solidarity,” Japanese Finance Minister Shunichi Suzuki said at the meeting.
“The world continues to face an unprecedented crisis due to COVID-19. We risk losing the achievements of ending extreme poverty and sharing prosperity. “
The global economy is expected to experience solid growth this year and next, but the gaps between advanced economies and the developing world are widening, undermining efforts to tackle extreme poverty.
In October, the financial chiefs of the Group of 20 economic powers said they looked forward to an ambitious replenishment of IDA.
The World Bank aims to raise more than $ 90 billion for IDA by the end of the year through a capital raising exercise conducted every three years.
Japan’s share, at 13.8% of a total of $ 24.9 billion, in warrants to be redeemed at IDA’s request, is the same ratio as in the replenishment exercise precedent, when its contribution amounted to $ 3.2 billion.
At the time, Japan was the second largest contributor after Great Britain, followed by the United States, Germany, France and China.
The $ 24.9 billion is a critical part of the total replenishment, including repayment of loans offered by IDA in the past as well as bonds it issues to raise funds.
IDA, which provides loans and grants over very long periods at low interest rates, last increased its capital by $ 82 billion in December 2019 (Report by Tetsushi Kajimoto; edited by Clarence Fernandez)