FROM THE OFFICE OF PUBLIC AFFAIRS

U.S. Treasury Secretary John Snow today announced that he will request an additional $100 million in funding for the World Bank’s International Development Association (IDA).  Last year the United States proposed additional funding as an incentive contribution if IDA satisfactorily initiated work on a results measurement system and had delivered key country diagnostic assessments.  Secretary Snow determined that conditions have been met to allow for the additional contribution.

“The International Development Association is making strong progress toward ensuring that development resources are invested effectively,” said Snow.  “President Bush wants to be certain that assistance will deliver results on the ground and make real improvements in people’s lives.  I am very pleased to announce that I am requesting of this increase today.”

Last year, the United States achieved agreement on sweeping reforms in the MDBs, including a greater focus on measuring results.  For the first time IDA donors are able to link a portion of their contributions to the achievement of results.  The U.S. committed to increase its budgetary request by 18% for IDA.  Of the $2.85 billion U.S contribution to IDA, $300 million is contingent on improving results in a concrete and measurable way.

The contingent contribution was divided into two parts: 

FY04 -- the President’s budget made $100 million contingent on IDA creating a new measurable results system and significantly increasing the number of diagnostic studies, which are vital to increasing assessment and accountability for measuring development results.  Diagnosing the adequacy of existing conditions in the poorest countries – national accountability structures, sources of growth, nature of poverty, investment climate, absorptive capacity, etc. – is critical to informed decisions on lending amounts, appropriate instruments, and priority sectors for assistance.

FY05 -- the United States will link an extra $200 million to quantifiable results in the areas of education, health, and private sector development.  Ultimately, success needs to be measured by what was actually achieved on the ground in borrowing countries.   Productivity growth is the key driver of poverty reduction in all countries around the world, and investments in people and vibrant private sectors are important contributors to increasing productivity. Therefore, the U.S. will provide an additional $200 million if satisfactory progress is made toward achieving the following results:

•           Education: Increase in aggregate (IDA) primary school completion rates across IDA countries as well as an increase in the number of countries that have raised their completion rates.

•           Health: Increase in measles immunization coverage across IDA countries as well as an increase in the number of countries with 80 percent coverage.

•           Private Sector Development: Reductions in both the number of days and the official costs of starting businesses in IDA countries.

The United States will continue working with IDA, the other multilateral development banks, and other donor and recipient partners with a view to more fully integrating and strengthening a results-based approach throughout the development system.