Finance Minister Arun Jaitley’s speech in Washington

Following is the Text of the Speech of Finance Minister of India Arun Jaitley, representing the Constituency of Bangladesh, Bhutan, India and Sri Lanka, at the 94th Meeting of the Development Committee in Washington, DC yesterday:nnThe global economy faces depressed economic growth. Our constituency countries have displayed resilience and growth in this challenging environment where India is likely to grow at more than its last year?s growth of 7.6%, Bangladesh at 6.3%, Sri Lanka at about 5.3% and Bhutan at 6.8%.nnUnfavourable global scenario has made the achievement of twin goals of the World Bank Group and the ambitious SDGs even more challenging. Achievement of these goals requires trillions of dollars of development financing. This makes the role of the World Bank group even more critical ? both as a provider of finance and knowledge.nnI welcome the ?Forward Look Paper? which explicitly recognises the development challenges the world faces and speaks for all its client segments, especially the LICs and LMICs. The LMICs should rightly remain the mainstay of World Bank Group?s interventions, and therefore the proposal to significantly increase lending to LMICs, including IDA graduates, makes eminent sense. The ?Forward Look? presents a credible policy and action plan for the World Bank Group for achieving the SDGs and its twin goals.nnIn view of the Bank being capital constrained today, there is a need to expand the role of not only IDA, but also IBRD and IFC to enlarge the lending programme of the Bank Group. For instance, in case of India, during the last fiscal year, fresh commitments delivered were only USD 3.8 billion as against the requirement of USD 5 to 7 billion. During the last spring meeting I had called for a $ 100 billion bank. The ?Forward Look Paper? has proposed annual lending of $ 40 Billion per annum by the IBRD. It also proposes doubling of IFC?s annual investment capacity. This is necessary in view of the increasing role which IFC needs to play in ramping up private sector?s capacities in the developing countries. Increased financing measures need to be coupled with renewed efforts to find innovative solutions, active pursuance of knowledge sharing, coordinated responses with private sector, other development partners and international organisations.nnI share the assessment that the Bank should not only be bigger but it should also be better- more agile, efficient and less expensive to do business with. The Bank?s active promotion of South-South cooperation, increased use of Country Systems and a pragmatic implementation of Environmental and Social Standards would help considerably in making it a better Bank.nnThe final outcome of World Bank shareholding must not lose sight of the raison d’être of the realignment – to increase the voice and voting power of developing countries, which we had clearly stated in 2010 and reiterated in 2015 DC Communiqués. The draft report dilutes this laudable goal by merely stating that the voting power of the DTCs should not be reduced. Further, there should be at least 2% increase in voting power of DTCs at the conclusion of the process.nnIDA is the single most important concessional platform to meet the needs of low-income countries. Therefore, we fully support the replenishment effort that aims at a base package of USD 75 Billion for IDA 18 replenishment. I am happy to note that unreasonable burden which ?Acceleration Clause? imposed on the graduates has been recognised and it is proposed to suspend its operation for the present. This should in-fact be done away with entirely. The Global Concessional Financing Facility to tackle FCV crises resonates with my call made during the last spring meeting, and we welcome the same.nnThe World Bank stands at crossroads ? not only it has to reinvent itself as it embraces the challenges but it has to design and execute its projects efficiently, nimbly and innovatively, like never before. As shareholders, let us not shy away, from adequately resourcing the bank, and empowering the bank to enable us meet SDGs and our twin goals?.