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Wednesday, 8 August 2012

Write a comprehensive note on IDA






INTERNATIONAL DEVELOPMENT ASSOCIATION :-
International Development Association was set up in 1960. This institution is managed by IBRD International Bank for Reconstruction and development, but it is legally and financially distinct from it. The requirements of capital were increasing in the developing countries and it became difficult for the IBRD to perform its statutory duties. Keeping in view the problems. USA presented the resolution for IDA to co-ordinate with IBRD in annual meeting of IMF in 1959. So in 1960 Article of arrangement for IDA was submitted to the member countries in January, 1960 and it started functioning.

Members :-
IBRD members may be the member of IDA. There are two categories of members. First category includes industrialized nations. Kuwait and UAE second category includes poor and developing countries.

Resources :-
Thirty three industrialized countries of first category provide 90% of the total resources. The remaining 10% is provided by the poor countries. IDA initial subscription was 750 million dollars.
Following are important sources.
1. Transfer of a part of net income of IBRD.
2. Repayment of IDA credits.
3. Net Revenue ans Swiss loan.

Objectives :-
IDA objectives are same as IBRD. Its aid is for the development of poorest countries. Its conditions are more libel. Its aid is for productive purpose and it stimulates economic growth. IDA loans are called credits. Per capita income of the member poor countries is considered the base for the distribution of credit.


FUNCTIONS OF IDA :
1. To provide long term credit to poor countries at soft terms.

2. To co-ordinate with IBRD in co-financing.

3. To create supplementary source of capital for member countries.

4. To increase the productivity.

5. To promote economic growth of member developing countries.

IDA has its own financial resources but it is closely connected with the world bank. Executive Directors of IBRD and IDA are same.

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