Q&A: How IDA20 is an opportunity for health system strengthening

COVID-19 vaccination rates in low-income countries — especially in Africa, where only five of 54 nations reached the year-end target of fully vaccinating 40% of their populations — are a “failure of the international community,” according to Axel van Trotsenburg, the World Bank’s managing director of operations.

In an interview with Devex ahead of the final round of pledging for IDA20 — the 20th replenishment of the bank's International Development Association — taking place this week in Tokyo, he said that the World Bank will step up support for vaccination efforts, including purchasing and deployment, but that the anti-poverty lender wants the increased spending on health to be an opportunity “to prepare against future crises, and that means systematic health system strengthening.”

The fund normally gets replenished every three years, and IDA20 was originally scheduled for 2022. But due to the pandemic, the bank ran through the previous round’s funding ahead of schedule.

“The World Bank said we need to do emergency response, and we also need to keep a focus on the longer-term development agenda,” van Trotsenburg said of the accelerated deployment of IDA19 resources. “That meant that we didn't want to sacrifice the importance of the poverty agenda or, for example, climate change.”

This conversation has been edited for length and clarity.

What would you say are the biggest shifts from IDA19 to IDA20 in terms of priorities?

I think there has been a longer-term change occurring — that IDA has become more Africa-centric than ever. The second thing is a big change to focus on fragile states. Now, 70% of IDA resources are going to Africa. And certainly, in the years to come, the focus will be on areas like the Sahel, the Lake Chad area, the Horn of Africa. I think climate remains very important. African country representatives say that they want to see jobs and economic transformation.

At the end of the day, what is going to be important for the countries is: How can we help them get out of this pandemic crisis? But not only in the health sector, in providing vaccines and helping them in the deployment, but actually to prepare against future crises, and that means systematic health system strengthening.

What has the bank done with IDA19 funds around vaccines?

About 40% of the money provided has gone for the pandemic. This is not only health; it is also social security, helping kids in school. The bank never saw the crisis only as a health crisis, but unfortunately, it is becoming a development crisis. We estimated that because of the crisis, more than 100 million people would fall back into extreme poverty.

People have been losing their jobs. Girls are no longer going to school. How can you deal with the malnutrition problem when many people don't get salaries and they go hungry? And a lot of countries have been confronted by additional calamities. Take the locusts in the Horn of Africa and Yemen. These are the types of things we have been supportive of, in conjunction with the health initiatives.

Right now, we're supporting actively on the vaccine front over 60 countries — not only the purchase, but also the deployment. But ultimately we want to have a permanent strengthening of the health system. This cannot be a World Bank-centric approach. It has to be with the countries within the U.N. [United Nations] system and in Africa with the African Union.

It is clear that the world has not hit the 2021 goals for COVID-19 vaccination. Looking forward, how do you really make sure that the 2022 goals for a 70% vaccination rate in Africa are met?

The World Bank has been loud and clear that we need to ensure fairness in the world. We have been very, very clear about the situation in Africa. We thought it was not acceptable that countries do not have access to the vaccines while the world is proclaiming that we want to have a 40% goal. That is, unfortunately, a failure of the international community.

The whole idea of IDA20 is captured in the “building back better” notion — that we need to look at all the areas where we need to do more, and there is a lot to be done. What we have said is we will do not only financial support, [but] we are also increasing our physical presence in Africa. The test is how we can help in the overall global recovery, to support Africa recover growth rates that give them a chance to reduce poverty.

So what are the barriers to getting more vaccines deployed?

I think that right now it is on the supply side. Over the next couple of months, the situation will likely also change because the projected production of vaccines is going to be doubled, compared to this calendar year. My sense is we need to keep a sharp focus on this and do whatever is necessary to support countries in attaining these objectives of 40% and then ultimately 70% vaccination rates by midyear next year.

The World Bank has said it will be “Paris-aligned” by 2023. How does this climate agenda fit into IDA20?

First, we are going to have at least 35% of our IDA financing related to climate change. Secondly — very important for the low-income countries — we will have a balance between mitigation and adaptation benefits, and it is likely that actually the adaptation benefits will be higher.

We want to have an even more systematic approach. We have created a new diagnostic tool: the Country Climate and Development Report. We are linking climate and development so that we have a very solid basis of analytics that can then support the operations. This is actually a quite exciting way forward because it is then linked to critically important investments, including in the energy area.

At the end of the day, the bank needs to be a delivery machinery. We would like by the end of June to have these reports ready and also get ready for COP 27 [the 27th U.N. Climate Change Conference] in Egypt in October so that we can report how we want to move forward.

Will IDA20 advance the Private Sector Window, and what benefits will this bring for the countries and the investors?

Wherever you are in the developing world, the private sector is always saying that we need to de-risk investment. So you have this very wonderful debate about de-risking, and nobody is providing de-risking instruments. Particularly in low-income countries, this means that there is no investment. We then introduced de-risking instruments for … [International Finance Corporation and Multilateral Investment Guarantee Agency] operations.

This will be a continuous learning experiment. We were very clear about this. There are going to be risks. But what we will need to see is how we can be supportive of private sector development. This is a nice vehicle for reinforcing the concentration of IFC investments in lower-income countries.

There have been concerns from civil society groups that the bank is not fully utilizing the balance sheet of IDA and it is too risk-averse. What are your thoughts?

We created a financial framework that foresees that the deployable strategic capital will be actually worked down to zero over a 10-year period. The rating agencies saw it was actually well done and we got a AAA.

When IDA was created, for every dollar the donors gave in the 1960s or ‘70s, there was $1 of commitment. Once some of the re-flows started in the 2000s, that was 1 to 2. Now, we are proposing 1 to 3.5 or 1 to 3.7, depending. Nowhere in the world has this been done. We have done that prudently and effectively.