Asserting that countries in India’s constituency in the World Bank are the fastest growing block in South Asia and the world, Economic Affairs Secretary S C Garg made a case for increase in voting rights at the multilateral lending institution for faster development of the region. While the World Bank Group – IBRD, IFC, IDA, MIGA – has supported the growth and development of this constituency, it will need to continue in the foreseeable future, Economic Affairs Secretary S C Garg said at 97th Meeting of the Development Committee Plenary on the sidelines of Fund Bank spring meeting here yesterday.
He further said countries in India’s constituency in the World Bank – Bangladesh, Bhutan, India and Sri Lanka – now are the highest growing block in South Asia and the world at large. “It (block) will cross USD 3 trillion GDP this year. It attracts close to 100 billion dollars of FDI and Portfolio Investment and will grow around 7.5 per cent this year,” he said. However, these countries have widespread poverty and face enormous developmental challenges, he said, adding this is the reason capital increase has been a matter of critical interest for India.
He expressed happiness that there is now an agreement on the capital increase package and that it is reasonably large – a USD 13 billion capital increase in International Bank for Reconstruction and Development (IBRD) and International Finance Corporation (IFC) together, which from the historical context, is a truly unprecedented expansion of capital. He also expressed “India’s support for the shareholding review, including development of dynamic formula and the capital package.” Garg hoped that increased lending for middle income countries will start flowing soon and single borrower limits would be revised upwards quickly.
He also highlighted that the current capital increase package was due in 2015 and that this has been delivered only in 2018 and the next capital review, as agreed, is due in 2020. Suggesting that next year (2019) will be the right time to start working on capital review, the secretary said the management could look at preparation for the same well in time to deliver it on time. He urged the Bank to become more efficient in its capital management and this would call for having a fresh look soon on IBRD transfers to International Development Association (IDA) and efficient deployment of buffer being created now.
On the sidelines of 2018 Spring Meetings of the World Bank and IMF, Garg held bilateral meeting with the US Under Secretary of Treasury for International Affairs, David Malpass. The discussion centred on the need to restart the dialogue under the Economic and Financial Partnership and for greater cooperation and coordination on issues of common concern especially in the multilateral fora.