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World Bank should adopt evidence-based, data-driven approach for global indices, country comparators: Sitharaman
New Delhi
Finance Minister Nirmala Sitharaman has reiterated India’s stand that World Bank’s global indices and country comparators should strictly be based on evidence and data.
She also urged the International Monetary Fund to adequately account for economic fundamentals while assigning sovereign ratings to Emerging Market and Developing Economies (EMDEs) and providing finance.
Sitharaman is attending the annual meeting of World Bank and the International Monetary Fund (IMF) in the US..
According to a social media post by the Finance Ministry, participating in Development Committee Plenary session on ‘A Future-Ready World Bank Group’, she commended the World Bank ’s initiatives over the past year to optimise balance sheet measures to increase its financial capacity, however, given the growing global economic challenges and the pressing need of emerging economies to finance their developmental needs, both new and concessional resources, will be essential.
She sought a more competitive pricing model for the World Bank to foster broader participation, incentivise middle-income countries to borrow more and deepen development impact.
“She reiterated India’s stand that World Bank should adopt a strictly evidence-based and data-driven approach when preparing global indices and country comparators such as the Worldwide Governance Indicators and the new B-Ready index,” the post said while quoting her.
She noted the pivotal contributions of the Global South to the foundations of multilateral development banks at the 1944 Bretton Woods conference and also emphasised on embedding diverse voices in decision-making to ensure a truly inclusive, global development framework. “FM also called for the World Bank to promote a two-way exchange of innovations, drawing from the transformative experiences of the Global South in in areas like digital inclusion and sustainable energy,” the post said.
IMFC session
Meanwhile, participating in in the IMFC Plenary session on ‘MD’s Global Policy Agenda’ she emphasised that the IMF’s surveillance and policy guidance remain vital for countries with debt vulnerabilities.
However, the Fund should remain even-handed in its policy advice. “The Union Finance Minister said that there is need for sovereign ratings to adequately account for EMDEs (Emerging Market and Developing Economies) economic fundamentals to ensure their cost of capital for them and their ability to attract private capital is factored in,” another social media post quoting her said.
The FM also underlined engagement with credit rating agencies and calling for improvements in methodology to ensure that they capture the fundamentals reflecting the ability and willingness to repay.
‘IMF as trusted adviser’
She hoped that the ongoing review of the Transparency Policy and Open Archives Policy will help the IMF to establish itself as a trusted adviser with respect to strengthening multilateral surveillance and enhancing transparency.
“Recognising the evolution of the IMF as a multilateral institution over the last 80 years, the Union Finance Minister said that the current global order warrants governance reforms in major global institutions, including the IMF,” the post mentioned.
Talking about the global economy, she said that in 2024 it has shown remarkable resilience; while output is nearing its potential in some major economies, headline inflation has generally moderated and moved closer to the central banks’ targets.
Still, “FM said that there are several downside risks, including growing geo-political tensions and medium-term global growth prospects, are a concern due to their continued weakness,” the post highlighted.
Against this overall global macroeconomic backdrop, the Union Finance Minister said that the MD’s Global Policy Agenda has rightly prioritised securing a soft landing and breaking from the low growth-high debt path.
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Published on October 26, 2024
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