India has demanded governance reform of the World Bank (WB) by raising the shareholding by the developing countries at the Plenary Meeting of the WB-IMF Development Committee.
The World Bank is facing fund shortages to implement its ambitious development programmes including climate financing and realizing the Sustainable Development Goals.
Development Committee is the ministerial-level forum or decision making body of the World Bank Group and the IMF together, for intergovernmental consensus-building on development issues. India has a multi country representation as the Finance Minister represented a constituency consisting of — Sri Lanka, Bangladesh and Bhutan besides India.
Finance Minister Arun Jaitley raised strong case for raising the shareholding of the developing nations. Such an increase in shareholding will help the WB to raise additional funds as it is facing resource scarcity amidst demand for additional finance.
Pointing out the need to raise the shareholding of the developing countries in the WB, Jaitley indicated that the developing and transition economies’ GDP share has increased from 39 % to 49 % in 2015 compared to five years ago. The shareholding should be realigned and completed by 2017.
Mr Jaitley observed that the WB needs big resources to give the usual development loans after 2018. Similarly, the institution has to mobilize additional funds to give $100 bn loans for climate financing. The Sustainable Development Goals (SDG) of the WB itself is a big development responsibility.
Sustainable Development Goals are prepared by the WB to give development assistance promoting environmental sustainability. Finance Minister has termed the SDG as ambitious and reminded that ambitious revenue mobilization should be done by the Bank to realize the programme.
India expects a new dynamic formula will be designed and implemented by 2016 so that the developing world will get more say in the administration of the WB.
Already, India has strong complaints about the non-implementation of the IMF quota reforms. The 14th quota reform of the IMF that was proposed in 2010 was vetoed by the US. The quota revision envisaged more voting share to India and other developing countries in the IMF.