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World Bank, IMF should reflect rise of developing economies: India

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United Nations: India has called for reforming the World Bank and the International Monetary Fund (IMF) to reflect the rise of the developing and transitional economies and give them more say in governance.

The share of the developing economies in transition in the world gross domestic product has increased from 39 percent in 2008-2010 to 49 percent in 2012-14, but the shareholding patterns at the financial institutions have not kept pace with the change, Amit Narang, a counsellor at the Indian Mission told a session of the General Assembly committee that deals with economic and financial matters Tuesday.

“There is thus an urgent need to take up shareholding realignment in the World Bank to reflect these changes” he said.

“The changing global economic landscape makes it imperative for steps to be taken to increase the credibility and legitimacy of these institutions in response to these changes,” Narang added.

As for the IMF, he said it was facing and “unprecedented situation” having failed to implement the quota of shares set during the last review in 2010 even as the time has come for the next review.

The Republican-controlled US Congress has blocked the implementation of the new quota structure, which would increase the shares of India, Brazil, Russia and China-the BRIC countries-putting them among the 10 largest shareholders of the IMF. The share quotas determine the voting power and access to funding.

“We need to collectively reflect on a constructive way forward so that the IMF continues to be well resourced through quota resources, and also reflects the changing global economy in its governance structure,” Narang said.

He also criticised the Financing for Development Conference for “formalising the status quo which effectively keeps out the voices of a large number of countries” in the Committee of Experts on Sustainable Development.

“It unequivocally weakened multilateralism and undermined the notion of universality,” Narang asserted. “This important notion was exposed to be a convenient rhetoric to weaken differentiation in international relations.”

(IANS)

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World Bank shareholders endorse capital increase plan

Following the capital increase plan announced Saturday, the combined financing arms of the World Bank

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World Bank's prompt decission to pause two seperate projects with India nad Pakistan came after India's objection against it
The Wold Bank Logo Wikimedia

The World Bank has said its shareholders endorsed a capital increase package, a series of internal reforms, and a set of policy measures to strengthen the international lender’s capabilities.

The $13 billion capital increase package includes $7.5 billion of paid-in capital for the International Bank for Reconstruction and Development (IBRD), the group’s primary lending arm, and $5.5 billion for the International Finance Corporation (IFC), the group’s private sector lending arm, said the World Bank in a statement on Saturday, Xinhua reported.

World BAnk shareholders to have better plans.

World Bank shareholders also endorsed a $52.6 billion callable capital increase for IBRD, the statement said.

“Through the historic agreement endorsed today, our shareholders have clearly demonstrated a renewed confidence in global cooperation,” World Bank Group President Jim Yong Kim said.

“This capital package allows for greater responsiveness to risks to global stability and security, particularly in poorer countries and fragile states,” Kim added.

Following the capital increase plan announced Saturday, the combined financing arms of the World Bank are expected to reach an average annual capacity of nearly $100 billion between fiscal year 2019 and fiscal year 2030, said the World Bank. Kim said at a press briefing this week that the capital increase package doesn’t target changes of loans to any specific country.

Also Read: India will become High-Middle Income Country by 2047, says World Bank CEO

“It’s about how we think about income levels and how the World Bank Group can continue to be a partner and to support all of our member countries who are still clients,” he argued. He said that the multilateral lender would increase lending to lower middle-income countries over time. IANS