Washington: India sought to boost “additional investment flows” to developing countries saying the need to positively impact the lives of the poor should be the “mantra” which should permeate the thinking of the World Bank. (Agencies)
"Be it sectoral or regional strategies; be it design of new instruments or products; be it modernisation or governance reform; the goal should, at all times be, ensuring that all these changes improve the lives and prospects of the poor, wherever they may be," R Gopalan, Secretary at Department of Economic Affairs, said in his address to the Development Committee meeting of the World Bank.
Gopalan said while development challenges remain in large pockets, some countries are facing prospects of reduced Bank flows due to investment limits.
"Several measures are required to sustain Bank investment flows in such cases. We feel that, apart from short and medium term measures, efforts should also aim at increasing
'additional investment flows' through the Bank in these countries," he said.
The current spike in prices has serious ramifications coming as happened in the immediate aftermath of two earlier crises from which the world is yet to fully recover, making it much more difficult to garner resources to reduce its effects, Gopalan said.
"On the other hand, we have a tremendous amount of experience and knowledge on which to base our responses. Price volatility appears to be on the way to becoming a long-term
phenomenon. We need to look closely at disaggregated statistics on the contribution of different factors to food price volatility in order to understand and respond through policy reform," he said.
While linking farms to markets is a thematic area of the World Bank's policy - rather than working in thematic silos, it would be important to integrate programmes across sectors.
"We are yet to see this happening in a big way. The Food Crisis Response Programme has been effective in producing some short term results," Gopalan said.
"However, agricultural investment by the Bank remains small in relative terms and needs to be scaled up if we want to see longer term results on the ground," he said.
Referring to the situation in the Middle East, the Indian official said that this has brought with it certain concerns not only for the countries facing unrest but for the world as a whole.
"The prospect of inflation is looming over these countries and elsewhere. Fiscal deficits are expected to grow. Oil production is projected to decline. The international community needs to help during the period of transition.
WB should raise lending limits
India has said steps should be taken to increase the World Bank's lending limits as
developing countries are facing constraints in using the resources of the multilateral funding agency.
Gopalan said measures needs to be taken to enhance the lending limits which are constraining the ability of India and other developing countries to utilise World Bank resources more.
It also needs to invest more in agriculture.
He said there is need to improve the financial capacity of the Bank further as the world has been "moving from one crisis to the other" - first fuel, then food, then financial and economic, and now the return of fuel and food crises.
While these crises demand global efforts to mitigate adverse effects, the World Bank Group needs to have sufficient financial resources not only to tackle crises, but also to support long-term growth.
"In this regard, we are concerned that Bank lending will decline starting from next year," he argued.
"We need to deliberate now and in future on how we can strengthen the financial base of the Bank further. We need to take steps to ensure that just as it did over the last two years, the Bank has the capacity to respond to crises, play a counter-cyclical role that can make a difference and help in long-term growth," Gopalan said.
On the expansion of the Bank's work into areas like climate change, he said, "The core mandate of the Bank of poverty reduction and support to long-term growth of developing countries requires that the Bank should continue to have larger focus on such global public goods as education, health, financial inclusion and agricultural research rather than climate change alone."
Washington: India sought to boost “additional investment flows” to developing countries saying the need to positively impact the lives of the poor should be the “mantra” which should permeate the thinking of the World Bank.