In view of the World Bank being capital-constrained, Finance Minister Arun Jaitley emphasised on the need for re-capitalising the Bank to enable it to meet Sustainable Development Goals (SDGs) and twin goals of eliminating extreme poverty by 2030 and boosting shared prosperity.
"Unfavourable global scenario has made the achievement of twin goals of the World Bank Group and the ambitious SDGs even more challenging. Achievement of these goals requires trillions of dollars of development financing. This makes the role of the World Bank group even more critical both as a provider of finance and knowledge," he said.
Jaitley was representing the Constituency of Bangladesh, Bhutan, India and Sri Lanka, at the 94th Meeting of the Development Committee (DC), the Ministerial-Level forum of the World Bank Group and IMF for inter-governmental consensus building on development issues, here yesterday.
The meeting focused on the 'Forward Look' exercise carried out by the World Bank and discussion on the Dynamic Formula of Shareholding of member countries in the International Bank for Reconstruction and Development (IBRD), a member institution of the Bank.
"In view of the Bank being capital constrained today, there is a need to expand the role of not only IDA, but also IBRD and IFC to enlarge the lending programme of the Bank Group," he said. For instance, in the case of India, during the last fiscal year, fresh commitments delivered were only $3.8 billion as against the requirement of $5-7 billion. During the last spring meeting, Jaitley had called for a $100 billion bank.
The 'Forward Look Paper' has proposed annual lending of $40 billion per annum by IBRD. It also proposes doubling of IFC's annual investment capacity. This is necessary in view of the increasing role which IFC needs to play in ramping up private sector's capacities in developing countries.
"Increased financing measures need to be coupled with renewed efforts to find innovative solutions, active pursuance of knowledge sharing, coordinated responses with the private sector, other development partners and international organisations," Jaitley said. On growth, the Finance Minister said: "Our constituency countries have displayed resilience and growth in this challenging environment where India is likely to grow at more than its last year's 7.6 percent, Bangladesh at 6.3 percent, Sri Lanka at about 5.3 percent and Bhutan at 6.8 percent."
He shared the assessment that the Bank should not only be bigger but be more agile, efficient and less expensive to do business with. The Bank's active promotion of South-South cooperation, increased use of Country Systems and a pragmatic implementation of environmental and social standards would help considerably in making it a better Bank, he added.