Pranab asks World Bank Group to beef up their financial capacity

The Finance Minister, Mr Pranab Mukherjee has suggested a seven point agenda for the World Bank to consider in these current difficult times for the global economy.

The first and foremost of the priorities should be to address the lack of financial capacity of the World Bank and the IFC, Mr Mukherjee said in an intervention at the development committee meeting of the Fund-Bank at Washington on Saturday.

"As we stand at the brink of a recession and continue to hope that we will avert it, we are worried about the lack of adequate financial capacity in the Bank. Our concern is that when a new crisis unfolds, IBRD and IFC will be mute spectators", Mr Mukherjee said.

He said that a level of $ 15 billion of annual lending by the World Bank will be inadequate to meet even the normal needs of development finance of developing countries.

Mr Mukherjee urged the Bank and the IFC to work towards a strong capital base through a capital increase, and find other creative ways to expand lending to and investment in developing countries.

The other immediate focus areas for the World Bank, as suggested by Mr Mukherjee, include the need to put IDA on a more sustained footing; need to tackle food price inflation, need to give priority to the upliftment of the poor without getting diverted by peripheral goals and need to generate additional and new finance for climate change.

Mr Mukherjee also said that meeting the energy access needs of the poor is going to be a severe test for the World Bank.

"While climate concerns are legitimate, providing access to energy for the poor is a priority far more important than sustaining energy intensive lifestyles", he said.

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