World Bank split over IDA Funding and Economic Weight Reform: What does this mean for Singapore and ASEAN?

Intan Khairiah Adilah Binte Abdullah | The Business Times

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Tensions rise as Director Michael Krake gives his summary speech on the moderated caucus. 

PREPMUN Headquarters - Negotiations took place at the World Bank Board of Directors meeting this morning, which revealed widening fractures over the balance between International Development Association (IDA) contributions and Economic Weight (EW) in the institution’s shareholding formula. 

Advanced economies pressed for greater emphasis on donor contributions, while emerging economies urged for representation while warning of systemic inequities. 

Several directors, including Naoya Jinda and Katherine Rechicco, argued that increasing IDA weight is essential to sustain the Bank’s development mandate as the number of low-income borrowers rises.

The current negotiation stands at 74:26 split of Economic Weight to International

Development Associate (IDA) contributions. This split rewards big economies such as the G7, those with stable currencies, and the advanced economies with high nominal GDP.

IDA19 Replenishment Contributions
Country	IDA19 Contribution (US$ millions)	Share (%)
United Kingdom	3,893.63	12.07%
Japan	3,226.16	10.00%
United States	3,004.20	9.31%
Germany	1,811.75	5.62%
France	1,631.00	5.06%
China	1,200.00	3.72%
Canada	1,111.54	3.45%
Sweden	973.59	3.02%
Netherlands	944.55	2.93%
Switzerland	683.00	2.12%
Australia	345.80	1.07%
Korea	451.66	1.40%
Singapore	64.52	0.20%
Indonesia	30.00	0.09%
Malaysia	9.00	0.03%
Philippines	5.60	0.02%
Thailand	5.10	0.02%

Annex 14: IDA19 Partner Contributions in US$ by World Bank Group

However, this change penalises Singapore due to lower GDP in comparison to major powers, which leads to lower EW. 

No matter how the ratio is interpreted, the reality is inevitable that any formula that amplifies the weight of either economic size or absolute donor contributions reinforces the dominance of large economies. 

Large economies such as the United States, Japan, and Germany will benefit while smaller economies, namely Singapore, risk being placed at a structural disadvantage despite their fiscal prudence and strong development credentials. 

EW is defined not by income per capita but by absolute GDP, meaning population size and market scale drive representation. As a result, Singapore’s economic sophistication and governance reputation do not compensate for its statutory disadvantage under such a metric. 

The alternative offers little comfort. Should the ratio shift towards greater emphasis on IDA contributions, influence would tilt towards the handful of countries capable of extending multi-billion-dollar replenishments. Singapore contributes proportionately to its size, but not at a scale comparable to the US or Japan. Raising contributions certainly improves Singapore’s absolute voting share, but the relative gain is marginal when others can simply spend more. 

In effect, the system favours states that are either demographically large or financially unbounded. Small, high-income economies sit in neither category. Hence, their developmental success does not translate into shareholding leverage unless accompanied by disproportionate levels of spending. 

This raises a broader governance concern. In the case where representation at the Bank and the ability to pay becomes the overshadowing model, the institution risks reinforcing the perception that global development finance remains a G7-Centric Enterprise. 

Contrarily, if GDP size is tethered to representation, emerging powers may gain power, but smaller states including developed ones lose visibility in decisions that ultimately affect them. 

For ASEAN, the implications are split. Larger regional economies may benefit under an EW-heavy model, but Singapore and other smaller high-income states lose comparative influence regardless of the direction of reform. This divergence could complicate regional coordination within the Bank’s board, particularly if future policy discussions prioritise scale over stability. 

It is essential that global financial institutions derive legitimacy not merely capital adequacy, but from the breadth of representation. A reform process that consolidates authority among few donors may be efficient in the short term but risks eroding the cooperative foundation on which the Bank depends. 

The task ahead is not simply to decide how much is paid and who is paying, but to decide on a fair allocation and concentration of power. 

As the Board of Directors of the World Bank proceeds with its Shareholding Review, we hope that it will pursue a strategic balance that protects financial sustainability without entrenching donor dominance. Alongside, ensuring that the future EW:IDA ratio reflects both genuine economic weight and equitable representation.