Multilateral funding crucial for infrastructure: Chidambaram
Stressing that investment in infrastructure is critical for creating growth and jobs and rebalancing global demand, Finance Minister P. Chidambaram Saturday said it would be a "tragedy" if the World Bank fails to meet capital needs of of member-countries when they need it the most.
Speaking the Development Committee Meeting of the Bank here, Chidambaram said flow of long-term finances is extremely important for addressing the challenges of infrastructure development, rapid urbanization and poverty reduction.
He said the World Bank Group (WBG) had responded to the financial crisis in 2008-09 in an exemplary manner. "It is a matter of concern that, today, the WBG is constrained in responding in a similar manner."
"We are still concerned about the declining capacity of the Bank to respond adequately to the crisis... Considering the pre-eminent position of the World Bank in the arena of development finance, it would be a tragedy if the Bank is handicapped in meeting the requirements of the member countries when they need it the most."
He said during the present crisis, when capital flows have got disrupted and the risk appetite for long-term financing is low, the role of multilateral development banks in infrastructure financing has become "extremely crucial".
Chidambaram said the availability of resources for development and the flow of private capital have contracted and called for ways to augment the finances of the International Finance Corporation.
The finance minister welcomed the 'World Development Report 2013 on Jobs' and said, "It is good that the WDR is not prescriptive and it provides space for governments to chart their own course and in the context of their own development framework."
The WDR 2013 on jobs highlights that there is no magic formula for creating jobs and the mix of job enabling policies will differ between countries. The private sector generates most jobs, but the public sector has an important role to play.
The Committee Saturday agreed that gender equality is smart economics and a key factor in poverty reduction.
Chidambaram appreciated the country-level diagnostics and all the Country Assistance Strategies prepared last year and said gender-informed lending has risen significantly.
"We welcome the launch of the gender portal of the Bank. We recognize that the Bank can play a catalytic role in bringing synergy between institutions for better outcomes."
The next meeting of the Development Committee will be held April 20, 2013, in Washington.