International Development Association (IDA)

IDA helps countries chart their own future. South Korea's journey from poverty to prosperity is a great example of IDA's impact. 

In just six decades, South Korea has transformed from one of the world's poorest countries to a global powerhouse—from a GDP per capita of just $158 in 1960 to $33,121 in 2023.

This transformation required resilience, reinvention, effective public policy, and entrepreneurial spirit.

As the government launched its development plan in the 1960s, which became the blueprint for economic transformation, it needed to increase transport capacity to boost agricultural productivity. South Korea approached IDA to fund a $14 million project to complete a 26-kilometer rail line and over 1,000 freight and passenger cars. With IDA support, more infrastructure, schools, and agriculture projects followed. 

Success Begets Success

With an unparalleled record in global development, IDA’s combination of concessional funding backed by robust project expertise is a game changer in the fight against poverty. And IDA support has sparked a development chain reaction that has transformed the lives of hundreds of millions of people.

In its early years, IDA concentrated on large-scale infrastructure projects. However, it was only a short time before IDA recognized the potential of agriculture to reduce food imports, create jobs, and help countries rise out of poverty. IDA projects in China, India, Indonesia, and Vietnam, for example, not only boosted productivity in those countries but also paved the way for similar progress in others. 

Disclaimer

India

There’s no better example of the powerful impact of IDA support than India’s Green Revolution. In the early 1960s, India’s rapidly growing population faced persistent food shortages. IDA supported the government to help boost agricultural output, with projects focused on expanding irrigation, promoting the adoption of high-yielding seeds, ramping up fertilizer production, and building grain storage silos. IDA support helped propel India’s landmark Green Revolution. This rapid transformation saw India achieve self-sufficiency in food grains and avoid the threat of famine. Today, a country previously dependent on grain imports is a major food grain exporter. 

Indonesia

The Green Revolution sparked worldwide interest, and many IDA countries have adopted some of its principles. In the 1960s, Indonesia had become increasingly reliant on large rice imports, mainly due to inadequate irrigation. In response to the government's request for assistance, IDA's first investment was to fix three irrigation systems in Java and build a new one in South Sumatra. With IDA's support, Indonesia improved its irrigation, fertilizer production, and agricultural extension operations. By 1978, the country had increased food security through rice production. 

(Photo: The repaired irrigation canal to carry water several miles from the Tarum Timor canal in West Java. World Bank. CC BY-NC-SA 4.0 DEED) 

China

China implemented successful erosion control programs with IDA support, resulting in long-term and sustainable development impacts. These programs focused on improving soil conditions in China's Northwest, especially the Loess Plateau, which contributed 90 percent of the Yellow River's sedimentation. China achieved land sustainability by improving the ecological conditions of its watersheds—the afforestation of heavily eroded slopes dramatically reduced sedimentation. The Loess Plateau project significantly increased agricultural production and farmer incomes.

In a single generation, Vietnam transitioned from one of the world’s poorest nations to a competitive middle-income country.

Economic and political reforms in the 1980s increased per capita GDP from $97 in 1990 to $4,346 in 2023. Poverty rates ($3.65/day, 2017 PPP) declined from 14 percent in 2010 to 4.2 percent in 2022.

Health outcomes have improved along with living standards, with infant mortality rates halving between 1993 and 2020. As of 2019, almost 100 percent of the population used electricity as the primary lighting source, up from just 14 percent in 1993.

IDA provided concessional finance to help Vietnam achieve its vision of an inclusive, sustainable, and affluent society.

Greening growth in the Mekong Delta

For generations, Vietnamese farmers have relied on excessive water usage in their rice fields. This overuse of water for irrigation has a hidden cost: it leads to increased methane emissions. Additionally, a heavy dependence on non-organic fertilizers and pesticides to enhance production has escalated costs, compromised food safety, and damaged the environment. Climate change further complicates these issues by subtly transforming once-fertile landscapes.

The dual challenges of climate change and extreme environmental degradation are particularly pronounced in the Mekong Delta—a vital agricultural and aquaculture hub. IDA investments have encouraged flood retention, improved irrigation, and strengthened sustainable water resource management and development. Between 2011 and 2017, some 215,000 farming households benefited from improved irrigation services due to IDA financing.

IDA investments in sustainable rice production have equipped farmers with new methods, enabling them to use water more efficiently, reduce methane emissions, and improve yields, quality, and profitability. IDA funding has helped strengthen infrastructure to manage floodwaters better and capture flood benefits.

Rice farming contributes to three-quarters of methane emissions from Vietnam’s agriculture sector.

Between 2015 and 2024, Mekong Delta farmers reduced their use of water and fertilizer by up to 50 percent and increased their earnings by an average of 30 percent, while reducing carbon emissions by an estimated 1.5 million tons each year.

With the support of IDA, Bosnia and Herzegovina underwent an economic transformation that resulted in increased GDP per capita, a significant reduction in unemployment rates, and the successful rehabilitation of basic infrastructure and essential services.

The journey has come full circle today: Bosnia and Herzegovina has joined IDA's donor family. Together, they exemplify the power of solidarity, partnership, vision, and resilience.

As the country continues its journey towards greater prosperity, it becomes part of the IDA family, helping vulnerable countries just as it was once helped by IDA.

This model of conserving cultural heritage has been applied in various parts of the world to revitalize local economies. Notably, The International Bank for Reconstruction and Development (IBRD) assisted many cultural heritage sites and monuments in China, specifically in Gansu, Guizhou, and Shandong.

Today, 78 countries are eligible to receive IDA resources. In time, many of these countries – like others before them – will graduate from borrower to donor. When recipient countries graduate and later return as donors, it marks an important milestone for IDA, international development, and the fight against poverty. The journey of these countries is a testament to the effectiveness of IDA’s approach. It is also a reminder that achieving sustainable development goals requires a global effort and that IDA is committed to providing the necessary support.

Over the past 60+ years, IDA has leveraged knowledge and partnerships to identify and implement the best-fit solutions for client countries. With expertise in multidisciplinary and multi-sector approaches, IDA financing combines deep analytical skills and hands-on experience spanning the public and private sectors.

As the world recovers from the pandemic and faces ongoing challenges that threaten development, IDA remains committed to ensuring that the world’s poorest countries have the necessary resources to fight poverty, boost economic growth, and improve living conditions for millions of people on a livable planet.

Related Links:

What is IDA?
IDA’s History
IDA Borrowing Countries
IDA Contributor Countries
IDA Graduates

Bolivia: Road Sector Capacity Development Project
India: Terai Seeds Project | Uttar Pradesh Tubewell Irrigation Project | Wheat Storage Project | Karnataka Watershed Development Project
Indonesia: Irrigation Rehabilitation Project
China: Loess Plateau Watershed Rehabilitation Project | Second Loess Plateau Watershed Rehabilitation Project
Vietnam: Sustainable Agriculture Transformation Project
Bosnia and Herzegovina: Cultural Heritage Pilot Project