Switzerland – Multilateral development banks play a central role in supporting the poorest developing countries. Their expertise and size enable them to tackle global challenges such as financial crises, climate change and pandemics.
On 12 April 2017, the Federal Council therefore decided to allocate the necessary resources to participate in replenishing the corresponding funds, namely the International Development Agency (IDA), the World Bank, the African Development Fund (AfDF) and the Asian Development Fund (AsDF).
The multilateral development banks are priority partners in Switzerland’s international cooperation efforts. They coordinate and implement programmes and projects in the partner countries. Their political neutrality allows them privileged access to the beneficiary countries. They are also invaluable partners for Switzerland as, due to their size and know-how, they are able to achieve an impact far beyond that of individual donors. The banks also make an important contribution to implementing the Agenda 2030 for Sustainable Development. Some of the funds will also go towards debt relief measures.
Switzerland is a longstanding member of the World Bank, the African Development Bank and the Asian Development Bank. The funds managed by these banks are used to provide low interest loans and grants to countries with the lowest incomes and thus limited access to capital markets. The funds are regularly replenished by the member states.
Over the next three years, the IDA will invest USD 75 billion in development projects in the poorest countries. It has set itself the aim of encouraging more private investment, expanding its involvement in fragile regions and investing more in climate protection measures. The financial resources of the African Development Fund (USD 5.8 billion) will be used in particular to assist fragile states, particularly against the backdrop of the current migration crisis. In implementing its programme (USD 2.4 billion) the Asian Development Fund will place special emphasis on developing the private sector and strengthening governance in developing countries.
Switzerland has committed itself to contributing a total of CHF 645 million to the 18th replenishment of the IDA (IDA-18), CHF 174 million to the 14th replenishment of the AfDF (AfDF-14) and CHF 28 million to the 12th replenishment of the AsDF (AsDF-12). The payments will be made over a nine-year period.
At the same time Switzerland is continuing its commitment to the Multilateral Debt Relief Initiative. This initiative aims to progressively cancel the debts to the International Development Agency and the African Development Fund of the poorest over indebted developing countries, as long as the countries can demonstrate that they are carrying out specific reforms. The Federal Council approved MDRI contributions to the IDA and the AfDF amounting to around CHF 131 million.
Due to their proven track record the multilateral development banks have become a mainstay of international development cooperation. The importance that Switzerland attaches to these organisations is underlined by its ongoing commitment.
Photo: Didier Burkhalter by (FDFA)