Biden pledges record $4 billion to World Bank fund for poorest nations

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 $3.5 billion 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 honor 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 Dec. 5-6 in Seoul. 

World Bank President Ajay Banga is aiming for a record amount exceeding the $93 billion 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 $120 billion 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 37 per cent to 400 million euros ($423 million). 

Denmark in September announced a 40 per cent increase in its contribution to about $492 million. 

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)