Washington, Oct 3: Union Finance Minister P Chidambaram lauded the World Bank Group for realigning its financial strategy to support its mission and its goals, and added that only a financially robust World Bank Group would have the ability to meet the strategic and cyclical challenges that it faces over the medium-term.
Chidambaram said that World Bank Group endorsed the twin goals of ‘ending extreme poverty and promoting shared prosperity’ by 2030.
“I think the proposed Strategy is well thought out, comprehensive and in the right direction. There are many aspects of the Strategy that are attractive and critical to the achievement of the goals: aligning all activities in achieving the twin goals, drawing on comparative advantage to maximize development impact, and working as one World Bank Group and becoming a ‘Solutions Bank’,” he said at the Development Committee Meeting of the World Bank on Saturday.
“We are glad that the World Bank Group is finally realigning its financial strategy to support its mission and its goals. I support the primacy being given to the principle of financial sustainability. I welcome the statement that implementation of the Strategy will require a significant scaling up of financial resources,” he added.
He also expressed happiness over the management’s willingness to look at all options for augmenting revenues, reducing costs, and using its available capital more efficiently.
“These are the right first steps. I would recommend that conversation on augmenting capital should commence immediately,” he added.
Chidambaram said that the lendable resources of the World Bank today are about USD 14 billion a year, and added that this will decline to about USD 12 billion a year, if nothing is done.
Referring to World Bank President, Jim Yong Kim’s earlier statements that there are 1.2 billion people living in extreme poverty, Chidambaram said that if these two numbers are put together, the conclusion is depressing and frightening that only USD 10 per year would be available per individual living in extreme poverty.
He fully endorsed the proposal that the allocation of resources by the World Bank Group should be driven by its Strategy.
“This is the only efficient and effective way of deploying scarce resources in a manner that establishes a clear line of sight between the goals and the activities undertaken by the Bank,” he said.
“We support the proposed Country Partnership Framework. While sound diagnostics and customized ‘solutions’ are important, the development needs and priorities of the countries should be the centre-piece of this process,” he added.
He also said that during the Spring Meeting, he had recommended that intermediate goal-posts be established to ensure better tracking of progress.
“I am glad that President Kim has indicated an intermediate target of 9 per cent by 2020. Without an intermediate goal post, we would find it difficult to evaluate meaningfully the progress being made by the Bank in meeting the twin goals,” he added.
Chidambaram also said that rolling-out a complex Strategy is indeed time consuming, but added that as both the goals and the direction have been established, it should be possible for the Bank to organize its activities in a manner that is more and more aligned to the pursuit of the twin goals.
“The poor of the world are getting increasingly impatient, as we witness every day. The success of the Bank depends, to a large extent, on battling delay and uncertainty and delivering with speed on its promises,” he added. (ANI)