World Bank seeks stronger partnership with India, China
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World Bank seeks stronger partnership with India, China

Friday, 19 October 2007, 07:00 Hrs
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Washington: The World Bank Group and the International Monetary Fund plan to develop stronger partnerships with emerging economies like India, China and Brazil as a new strategy to tackle issues of the poor as also energy and environment.

"The whole thrust of what I have been trying to set forth as a strategy is that our role should not just be with developed countries and the poorest countries, but there is a critical role for many of the countries in between," World Bank's new President Robert B. Zoellick said here Thursday.

Noting that China, India and middle-income borrowers from the International Bank for Reconstruction and Development (IBRD) still represent 70 percent of the poor, those living on under $2 a day, he wanted the group to develop stronger partnerships with these countries with very large challenges, he told reporters before the WB-IMF annual meetings over the weekend. IBRD is part of the World Bank group.

Finance Minister P. Chidambaram is representing India at the meetings. The group's development committee is meeting here Sunday for an intergovernmental consensus-building exercise on development issues.

"So, if we are going to really get at the issues of the poor, we need to develop partnerships with these countries. Similarly, if we are going to get at issues like energy and the environment, we need to strengthen our partnership," Zoellick said.

Part of these partnerships is to work with countries as clients and understand what they need, and how their needs are changing, he said, adding that sovereign countries should have their choices and the World Bank should try to become a more valued player for them.

In the context of Doha negotiations too, it's important for developed, mid-level developing and poorest countries to come together at the World Trade Organisation (WTO) to move it forward, Zoellick said.

At a separate press conference, International Monetary Fund Managing Director Rodrigo de Rato said the performance of India remains very strong, and it is certainly contributing to declining poverty and rising living standards.

"Monetary policy has been tightening over the past few months and has been useful in bringing inflation down, and that may be also affecting some signs of activity that we see as showing maybe in a slowdown but not at all a dramatic one," he said.

Noting actions taken by India following the rise in the value of the rupee, de Rato said IMF was "certainly sympathetic" to proposals to enhance transparency on the capital inflows in India and understood the concerns not only of India but also of many other countries on this count.

But there is a risk that limited inflows could dampen confidence, investment, and growth, he said suggesting "I think the government in India, like in many other places, has to have a balanced position to enhance transparency but at the same time allow as much investment as possible."

Asked about the recent sharp fall in the Indian stock market, de Rato said, "as you know, there has been some rumours about changes of legislation, so movements in the stock market can happen and then can correct themselves."

Commenting on a report that for the first time China, India, and Russia had contributed 50 percent to the overall growth in the world, he welcomed the increasing role of emerging economies.

This was so because it is not only giving those countries an opportunity to enhance the quality of life of their citizens, but also at the same time making global growth more broad based, de Rato said.

However this welcome change has consequences in terms of relevance and responsibilities too, he said, suggesting that the responsibility of arriving at a positive outcome in the Doha negotiations is not only in the hands of the traditional trade forces, the US and Europe, but also in the hands of others like China, India and Brazil.

"So I think that this new role of emerging economies is a very welcome one for many reasons, and it also requires bigger profiles, bigger responsibilities," de Rato said, noting that at least in the discussions for the new governance of the institution, they understand their new responsibilities very clearly.
Source: IANS
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