‘A tragedy if WB fails to meet capital needs of members’

India said on Saturday it would be a "tragedy" if the World Bank fails to meet capital needs of the member countries when they need it the most.

Appreciating the response of the World Bank Group to the 2008-09 financial crisis, finance minister P Chidambaram said it is a matter of concern that the World Bank Group is now "constrained in responding in a similar manner".

"The noticeable deterioration in the capital adequacy of the Bank is indicative of the vulnerability of the Bank ... it would be a tragedy if the Bank is handicapped in meeting the requirement of the member countries when they need it the most," he said at the development committee meeting of the World Bank here. He was representing the constituency consisting of Bangladesh, Bhutan, India and Sri Lanka.

"We do not doubt that the Bank must have taken stock of the situation and decided on an appropriate course of action. We would appreciate if that is shared with us. All options must be considered. We must eschew the temptation to succumb to pre-determined positions," Chidambaram added.

At a meeting of International Monetary and Financial Committee (IMFC), Chidambaram said high commodity prices, particularly energy prices, pose a major risk to India's growth and inflation.

He said capital flows to emerging economies remain volatile and global commodity prices have remained elevated. "The sharp rise in global food prices is another major challenge that many emerging economies may have to contend with," said Chidambaram, who is in Tokyo to participate in the IMF-World Bank annual meet.

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