India urges $50-B annual aid for developing nations

Monday, 26 April 2004, 07:00 Hrs
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WASHINGTON: India Sunday made out a strong case at the World Bank for foreign aid of $50 billion annually for developing nations.

Speaking at the Developing Committee, the policy-making body of the World Bank here, Indian Finance Secretary D.C. Gupta reminded it of its Dubai decision that international financial institutions (IFIs) identify volumes and forms of development assistance needed to implement agreed strategies.

"This needs to be done urgently for appropriate bench-marking of current efforts," he said.

"The most conservative estimates are that as much as an incremental $30 billion in official development assistance (ODA) can be effectively utilised by developing countries annually even today, and far more, say $50 billion, as capacity develops," he contended.

Gupta said the current level of ODA as a percentage of gross national income (GNI) of developed countries is at a much lower level than what prevailed in the early 1990s.

Gupta also said that the bulk of incremental resource flows need to be channelled through multilateral agencies such as International Development Association (IDA), the World Bank's concessional lending facility.

Referring to the situation in South Asia, he said the quality of governance in this region was not only relatively better, but also is in the process of improvement, as noted in the Bank's report. In terms of both unmet needs and performance-based allocation criterion, more and more concessional assistance should be flowing to this region, according to him.

"Yet, we find that per capita allocations, and sometimes even absolute levels of such assistance to the countries of this region, are some of the lowest, and substantially less than that for countries with much higher per capita incomes," he held.

The Indian official also expressed concern at the recent trend of net negative flows from the World Bank.

"With efforts to focus on enhanced lending at appropriate terms to middle income countries, we hope that the trend of negative disbursements will be reversed at the earliest."

He wanted the World Bank and other multi-laterals to step up their investment lending to better position the recipient countries to take advantage of growth opportunities.

He welcomed the Bank's renewed commitment to scale up infrastructure financing through a well-crafted Infrastructure Action Plan.

"We eagerly await its implementation in full measure. The success of the plan will depend critically on how the key administrative issues, including streamlining the safeguards compliance framework without defeating their underlying purpose, are addressed," Gupta said.

Source: IANS
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