Finance Minister Nirmala Sitharaman has assured that assistance will continue to be provided to global South countries. These countries are regarded as having a relatively low level of economic and industrial development and are typically located to the south of more industrialised nations.
“We have extended ‘Line of Credit’ at highly discounted rates to many African countries for building their institutions, bridges, railway stations, ports and secretariats. We will continue to do it because we think the Global South is with us, we want to be with them and help them,” Sitharaman said during the discussion on the ‘Bretton Woods Institutions at 80: Priorities for the Next Decade’, organised by the Center for Global Development on the sidelines of the World Bank and IMF Annual Meetings in Washington DC.
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She was responding to a remark by Larry Summers, President Emeritus, and Charles W. Eliot, University Professor, Harvard University when he said that India has a very high foreign reserve and should be used in investing in various instruments in developed nations. Sitharaman said that money from $700 billion-plus foreign reserves is already being used in different manners. “Much before the IMF reaches some countries in the neighbourhood in times of distress, India has given sums of money, with no conditions attached,” she said, apart from providing help to other countries.
On the issue of ownership of multilateral agencies, she said that it doesn’t only come with a quantum of money being given. “It can also come when decisions are made in consultations when decisions can be transparent, when decisions are made to benefit the recipient and not so uni-focused on the donor. India is willing to take that ownership,” she emphasised.
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Talking about reforms of multilateral development institutions, she reminded what the Prime Minister has been saying since 2015 about how these agencies should look at reforming and readying themselves for the demands of the 21st century. “We see how critical those words were during the Covid-19 pandemic, she said. Also, she mentioned that the G20 Presidency was an opportunity for India on two grounds – reforming the MDBs and raising the voice of the Global South.
“The Bretton Woods institutions should not allow themselves to have a ‘Mission Drift’ and should address it. IMF resources will have to be available for all countries. We need to have a roadmap for concrete reform-based steps that have to be initiated. We started it during our G20 Presidency after a lot of thinking and introspection. A shift in thinking of Bretton Woods institutions to meet the needs of the next decade is absolutely necessary,” she said.
The Minister mentioned that the Prime Minister once said India’s priority is not to impose its dominance. India has followed a policy of strategic and peaceful multilateralism. India has always stood in favour of multilateral institutions. “Multilateral institutions should focus on their core competencies and strengthen themselves for the global good. Shaping the future is one very ambitious goal which we need to follow and we need to have Bretton Woods institutions work on that,” she said.