The Hindu Business Line : India calls for re-look at World Bank voting shares

New Delhi, Oct. 22 India has called for a re-look at the variables that are used to calculate voting shares for decision making power in the World Bank even as the new structural options offered 50 per cent of the Bank’s voting power to developing and transition countries (DTCs).

“The criteria which can be used to evaluate the weight and efficacy of any variable, should, in our opinion, be based on the ability to contribute to the World Bank and the potential need for assistance from the World Bank,” Mr P. Chidambaram, Finance Minister, said at the Development Committee meeting of the Bank in Washington on Sunday.

Stating that the GDP (on market and/or exchange rate) would no doubt be relevant, he suggested that the other relevant variables could be depth of poverty (below $ 1 per day and or $2 per day) and quality of infrastructure. “This would provide a better reflection of the need and relevance of the World Bank for a country,” he added. Without recognition of the need to re-examine the variables and the formula for calculation of IBRD shares, he felt that any discussion on the structural options would, in India’s view, be “incomplete and superficial”.

Structural options

Mr Chidambaram said that there was a need to analyse the structural options more deeply. The different possibilities suggested as part of structural options include doubling the basic votes, tripling the basic votes and allocating 50 per cent of the Bank’s voting power to DTCs.

He also urged caution in broadening arrangements for fee-for-service technical expertise, stating that provision for fee-based knowledge services should be strictly demand-based.

Transparency in loans

Meanwhile, in his oral intervention at the meeting, the Finance Minister called for continued simplification and transparency in not only the pricing of loans but also the procedures involved in accessing these loans. He underscored the need for using country systems as well as being more innovative to provide cutting edge solutions in key areas such as infrastructure.

On the Doha Round, the Finance Minister said that it was crucial that all countries return to the negotiations with a firm commitment to resolve the remaining issues.

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