Speech by Second Minister for Finance, Ms Indranee Rajah, for the Motion on the Subscription to the International Development Association

1. Mr Speaker, Sir, I move, 
   

2. “That this Parliament, in accordance with section 4(3) of the International Development Association Act 2002, resolves that an additional subscription of Singapore to the International Development Association, of a sum not exceeding Eighty-Seven Million United States dollars (US$87,000,000), be authorised for the purpose of the Twenty-First Replenishment of the International Development Association”.

Background

3. Mr Speaker, the International Development Association (or “IDA”) is the arm of the World Bank Group that offers concessional loans and grants to its least developed member countries. This includes some ASEAN countries like Lao PDR and Cambodia. 

   1. IDA financing promotes economic and social development and poverty reduction for eligible countries, as well as support for tackling pressing global challenges. 

   2. IDA was started in 1960 and is replenished every three years or so. Singapore has been contributing to IDA replenishments since 2002.

4. The Twenty-First  IDA Replenishment (or “IDA21”), which covers the period from July 2025 to June 2028, occurs against the backdrop of a difficult global environment, compounded by increasingly frequent extreme weather events and health emergencies.

5. While no country has been spared, the effects have been felt much more greatly by the most vulnerable – especially the 78 IDA-eligible low-income countries. Many have yet to even recover from the effects of the COVID-19 pandemic.

   1. According to the World Bank Group, the COVID-19 pandemic erased three years of progress in reducing the extreme poverty rate in IDA countries. 

   2. About 651 million people in IDA countries faced food insecurity in 2023, nearly double the number in 2019. 

IDA21 Subscription

6. In December 2024, IDA donors agreed to expand the IDA21 replenishment envelope to US$100 billion - a historical high.  

7. Apart from domestic development, IDA21 will also enable beneficiaries to address common challenges in areas like health and the environment:

   1. Specifically, 45% of IDA21 commitments will be channelled towards climate mitigation and adaptation efforts. 

   2. IDA21 will also support improvements to crisis-readiness for health emergencies as well as pandemic preparedness, prevention and response.  

8. These have positive spin offs for the international community as a whole.

9. Hence, as a responsible member, Singapore should continue to do our part by supporting the IDA21 replenishment.  

10. The World Bank Group has a good track record as an effective development partner. 

    1. And Singapore had benefited from its loans and technical expertise during our early years. 

    2. These had helped us to develop some key infrastructure, including our water supply, sewage, port, power and telecommunication systems. The Bank also supported the expansion of the then-Development Bank of Singapore and the National University of Singapore. 

    3. As such, it is right that we also support others who are seeking to develop; and pay special attention to the most vulnerable.

11. IDA’s hybrid financing model also has an in-built multiplier of about four. 

    1. This means that for every dollar contributed by Singapore or any other donor, IDA is able to mobilise around $4 in financial support for IDA-eligible countries. 

12. For this motion, we are proposing that Singapore make a subscription of no more than US$87 million to IDA for the purpose of IDA21. 

    1. This represents about a 24% increase in absolute terms from our IDA20 subscription ; or

    2. A corresponding 10% increase in our burden share . 

13. Mr Speaker, Sir, I move this motion.