NEW DELHI: The World Bank welcomed a $100 billion development bank founded by the BRICS nations and is ready to provide it with technical assistance, the World Bank president said on Wednesday after a meeting with India’s new prime minister, Narendra Modi.
The BRICS developing nations – Brazil, Russia, India, China and South Africa – announced the bank last week, saying it would fund infrastructure projects in developing nations – a reflection of their growing importance in the world economy.
The new bank was created in part as a challenge to the global financial order created by Western powers after World War Two, which revolved around the International Monetary Fund and the World Bank. But World Bank President Jim Yong Kim, who is on a three-day visit to India, played down the challenge.
“The only competition we have is with poverty,” he told reporters. “Any bank or any group of institutions that try to tackle the problem of infrastructure investment to fight poverty, we welcome.”
The World Bank group was ready to increase its financial support to support job-oriented skills and infrastructure development in India to $15 billion to $18 billion over the next three years, Kim said, from $13.4 billion in the previous three years.
After meeting Kim, Modi said India was interested in the World Bank’s knowledge and expertise “rather than dollars” and called on the Washington-based institution to speed up project execution.
“We live in a world where speed matters. Quick execution is essential,” Modi said on his Twitter account.
The emerging powers represented by BRICS feel their newfound economic weight is not reflected in their decision-making power at the World Bank and the International Monetary Fund.
Meanwhile, the World Bank on Wednesday said it will provide financial support of $15-18 billion to India over the next three years to help accelerate economic growth and reduce poverty.
World Bank group president Jim Yong Kim said the Indian government has outlined a comprehensive plan to reduce poverty and return to over nine percent economic growth trajectory.
“The new government would like India to return to growth rate of nine percent a year. The World Bank group fully supports this goal,” he said.
“It is vital that India achieve these levels of growth to reduce poverty more quickly and to boost shared prosperity among its people.”
Kim said the World Bank was impressed by the Modi government’s commitment to accelerate growth.
Kim, who is on a visit to India July 21-25, also met Finance Minister Arun Jaitley and several other ministers and senior government officials.
“From my discussions with Prime Minister Modi and minister Jaitley, it is clear that they are committed to increasing India’s economic growth,” he said.
“I assured them that the World Bank Group will bring to bear all possible knowledge and financing to help them in this task. A large proportion of the world’s poor live in India and we will give all our support to the government as it strives to create jobs and build prosperity for its people.”
On his talks with Modi and other ministers and officials, Kim said discussions focused on the government’s plans to re-ignite growth by investing in infrastructure to create jobs, providing quality education and skills training to eight million young people who enter the labour force each year, and better equipping the 10 million people who leave rural areas for towns and cities each year for jobs.
“The government is committed to introducing key reforms, which are critical to India achieving its full economic potential,” he said.
“They have identified infrastructure development and job-oriented skill development as the deep drivers of growth. The World Bank Group is ready to support these development initiatives with financing, as well as knowledge and capacity building,” he added.
Kim also apprised the government of recent collaborative efforts between the Government of India and the World Bank Group to ensure that India continues to receive high levels of financial assistance from its various units.
