World Bank Provides Record 142 Trillion Support to Poorest Countries... South Korea Increases by 45%

Securing $100 Billion in Funding Over the Next 3 Years

The World Bank (WB) has decided to secure a record-breaking fund of $100 billion (approximately 142 trillion KRW) over the next three years to support the poorest countries.

WB announced this plan on the 6th at the final replenishment meeting of the 21st International Development Association (IDA) held in Seoul. IDA is an organization that provides long-term, ultra-low-interest concessional loans or grants to 78 low-income countries worldwide, and typically replenishes its funds every three years.

Reuters Yonhap News

Major foreign media reported that the replenishment amount of $100 billion decided on this day is the largest ever, surpassing the previous record of $93 billion announced in December 2021. Donor countries will first deposit $24 billion (approximately 34 trillion KRW) directly into the IDA fund through donations, and plan to raise the targeted funds by mid-2028 through bond issuance and other financial instruments.

Among the countries that pledged contributions to secure the funds, Norway declared it would increase its contribution by 50% from 2021 to 5.024 billion kroner (approximately 640 billion KRW). South Korea will contribute 846 billion KRW, a 45% increase from before; the United Kingdom will provide 1.8 billion pounds (approximately 3.2559 trillion KRW), a 40% increase; and Spain will contribute 400 million euros (approximately 600 billion KRW), a 37% increase. The United States pledged $4 billion (approximately 5.678 trillion KRW), a 14% increase.

WB emphasized that 17 donor countries pledged contributions increased by more than 25% compared to before, and among them, 10 countries increased their contributions by more than 40%. Ajay Banga, WB President, stated in a press release, "Thanks to optimizing IDA’s balance sheet over the past two years, we were able to make new commitments," and added, "We expect to increase lending capacity to about $150 billion over the next 10 years."

However, the replenishment amount decided on this day falls short of the $120 billion requested by Africa, the main recipient region of IDA. Foreign media pointed to the 'strong dollar' following the election victory of former U.S. President Donald Trump as a cause for the relative decline in the value of various countries’ currencies.

Currently, IDA has 78 recipient countries. South Korea is the only case that transitioned from an IDA recipient country in the 1960s and 1970s to a major donor country today.