Biden pledges record $4bn to World Bank fund for poorest countries

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US President Joe Biden delivers remarks during an event launching the Global Alliance Against Hunger and Poverty at the G20 Summit at the Museum of Modern Art in Rio de Janeiro, Brazil on Monday on Nov 18. — Reuters
US President Joe Biden delivers remarks during an event launching the Global Alliance Against Hunger and Poverty at the G20 Summit at the Museum of Modern Art in Rio de Janeiro, Brazil on Monday on Nov 18. — Reuters

US President Joe Biden pledged a $4 billion US contribution to the World Bank’s International Development Association fund for the world’s poorest countries, a senior Biden administration official said on Monday.

Biden announced the three-year US pledge during a closed session of the Group of 20 summit in Rio de Janeiro, the official told reporters, adding that the US Treasury was leading negotiations at the World Bank for the IDA replenishment.

The new US pledge is a record and substantially exceeds the $3.5bn Washington committed in the previous IDA fund replenishment round in December 2021.

It is unclear if US President-elect Donald Trump, who has proposed cutting foreign aid in the past, will honour Biden’s pledge as he and billionaire Tesla and SpaceX CEO Elon Musk seek to slash US spending through a new government efficiency panel.

An appropriation by the US Congress to fund the commitment would not likely take place until after Trump takes office in January.

A spokesperson for Trump’s transition team did not respond to a request for comment on the matter.’

‘Historic’ pledge

Earlier in Rio de Janeiro, US Deputy National Security Adviser Jonathan Finer told reporters that Biden would announce a “historic” pledge to the IDA replenishment.

Finer also told reporters at a briefing on the G20 summit that Biden will launch a bilateral clean energy partnership when he meets Brazilian President Luiz Inacio Lula da Silva on Tuesday.

The World Bank’s IDA fund, which provides mainly grants and very low-interest loans to the poorest countries, is replenished every three years, and a pledging conference is scheduled for December 5-6 in Seoul.

World Bank President Ajay Banga is aiming for a record amount exceeding the $93bn refunding in December 2021, amid rising demands from poor nations in Africa and elsewhere that are struggling with crushing debts, climate disasters, conflict and other pressures.

Banga told Reuters in October that a $120bn replenishment is possible, but that goal would require some substantial increases in country commitments.

Biden’s new US commitment is about 14.3 per cent higher than its 2021 contribution. At the IMF-World Bank annual meetings in October, Spain announced plans to boost its contribution by 37pc to $423 million.

Denmark in September announced a 40pc increase in its contribution to about $492m.

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