World Bank set to review voice reforms as India seeks greater say
The bank also commits around $18 billion of assistance to India over the next three years
New Delhi: The World Bank will review so-called voice reforms in 2015 amid demands by India and other emerging-market economies for a greater say in the governance of the bank, the institution’s president Jim Yong Kim said on Wednesday. The bank also committed around $18 billion of assistance to India over the next three years.
Kim’s remarks came close on the heels of the Brics (Brazil, Russia, India, China and South Africa) group of nations forming a New Development Bank (NDB) last week in direct competition with the World Bank.
“I do not think anyone can doubt the importance of Brics countries. The voice reforms debate will be reopened in 2015. All the 188 member-countries will have intense discussions on voice reforms," he said at the conclusion of a three-day visit during which he met Prime Minister Narendra Modi and finance minister Arun Jaitley, among others.
At the sixth Brics summit in Fortaleza, Brazil, last week, the five emerging economies agreed to mobilize resources for infrastructure and sustainable development projects in their countries and in other emerging and developing economies through the NDB amid concerns that other international funding agencies may not be able to meet the capital requirements of growing emerging market economies.
Finance minister Arun Jaitley on Tuesday had raised the issue of capital enhancement and voice reforms in the World Bank to reflect the new global economic order.
Kim said he welcomed the setting up of the new bank saying the “infrastructure financing needs are enormous".
Terming his meeting with Prime Minister Narendra Modi as one of the most inspiring, Kim said a host of issues were discussed including the need for generating more jobs, providing energy quickly to all Indians, building more clean, livable cities and the rejuvenation of the Ganga. “We did not discuss specific funding issues but more on how World Bank could collate data and insights from around the world and help India in its task," he said.
“The new government would like India to return to 9% growth rate. It is vital that the country achieves this growth to reduce poverty more quickly and share prosperity among it people," Kim said. “His (Modi’s) intention is to grow the economy and jobs quickly."
The Indian economy has grown at sub-5% levels for the previous two consecutive years. It is expected to grow around 5.4% in the current fiscal.
The World Bank Group will provide financial support worth $15-18 billion over the next three years to India. Of this, the International Development Association will provide $3.4 billion as part of poverty alleviation measures. In addition, the International Finance Corp., which finances privates sector projects in developing economies, will provide around $3.5 billion over the next three years.
World Bank Group assistance to India between July 2013 and June 2014 amounted to $6.4 billion.
Praising the progress made by Gujarat, Modi’s homestate, Kim said India’s rankings in the ease of doing business report would have improved by 50 places if only the state of Gujarat was considered.
Renu Kohli, ex-consultant Professor, G20 project, at the Indian Council for Research and International Economic Relations (ICRIER), said the voice reforms will only take place gradually.
“There are a lot of issues that are in play—funding, capital contributions and political compulsions domestically," she said.
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