Providing Loans and Grants to Low-Income Countries
Increase of 260.8 Billion Won Compared to Previous Year
President Yoon Suk-yeol, attending the Group of Twenty (G20) summit, announced on the 18th (local time) that South Korea will increase its contribution to the 21st replenishment of the International Development Association (IDA) by 45%. The IDA is a World Bank (WB) institution that provides long-term, low-interest concessional loans or grants to low-income countries.
On the same day, President Yoon attended Session 1 of the G20 summit in Rio de Janeiro, Brazil, themed "Eradicating Poverty and Hunger," where he pledged to increase South Korea's contribution to the IDA replenishment by 45% compared to the previous amount. This amounts to approximately 845.6 billion KRW, an increase of about 260.8 billion KRW from the 584.8 billion KRW contributed during the 20th IDA replenishment in 2021.
The IDA typically replenishes its funds every three years, and at the final meeting of the 21st replenishment scheduled to be held in Seoul next month, each country is expected to announce the scale of its contribution. The Ministry of Economy and Finance stated, "South Korea's proactive announcement to increase its contribution is a measure to demonstrate leadership as a global pivotal country and to encourage active participation from other countries in replenishing funds." It also added, "This is expected to contribute to an increase in South Korea's IDA share and also act as a factor in raising its share in the International Bank for Reconstruction and Development (IBRD)."
The World Bank also said in a press release, "We highly appreciate South Korea's decision to increase its contribution amid the global crisis affecting low-income countries," and added, "At the final meeting in December, South Korea's status in development finance will be further solidified as a 'key player.'"
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