FM: Tragedy if World Bank fails to meet members’ capital needs
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India on Saturday said 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 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.
Stressing that investment in infrastructure in developing economies is critical for creating growth and jobs, and for rebalancing global demand, he said that flow of long term finances is extremely important. "During the present crisis, when capital flows have got disrupted and the risk appetite for long term financing is low, the role of multilateral development banks in infrastructure financing has become extremely crucial," he said, adding that the recent crisis has underlined the need for strengthening of surveillance by the IMF.
"We must make sincere efforts to complete the quota formula review by the timeline of January 2013 so that it becomes the basis for the 15th General Review of quotas to be accomplished no later than January 2014," he said.
Chidambaram added that in these meetings, it has been decided that there will be a clear shift of the quota shares in favour of emerging market and developing countries.
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