World Bank Group members including India have endorsed boosting its capital by more than $86 billion and giving developing countries a little more voice in running the affairs of the 186-member institution.
The changes announced Sunday bring about a 3.13 percentage-point shift in favour of the developing countries giving them just over 47.19 percent of the total votes, while advanced economies’ share of the total falls to just under 52.81 percent.
India, which has been demanding an “adequate voice in the way this institution is run” for developing countries has expressed satisfaction over the Bank’s new shareholding pattern that “may not be the perfect arrangement” saying “the best cannot become the enemy of the good.”
But Ashok Chawla, secretary, Department of Economic Affairs who represented India, told the Bank’s steering Development Committee that for the future, economic weight must be based on a blend that gives more weight to their output and purchasing power to reflect the changing dynamism of the global economy.
The bulk of the vote increases went to emerging powers, while the world’s poorest nations’ will have to wait till the next review of voting rights in 2015.
China was the biggest gainer, its vote share rising from 2.77 percent to 4.42 percent, making the Asian giant the third most influential member of the World Bank behind the US and Japan. Germany, Europe’s largest economy, fell to fourth place.
Along with this first general capital increase for the World Bank for more than 20 years and shift in voting power to developing countries, the committee also backed the Bank’s new post—crisis strategy, and a comprehensive reform package to make the Bank faster, more flexible, and more accountable.
“We are grateful to our shareholding countries for this strong vote of confidence,” said World Bank Group President Robert B. Zoellick. “The change in voting—power helps us better reflect the realities of a new multi-polar global economy where developing countries are now key global players.”
A key reform endorsed by the members was a new Access to Information Policy, inspired by the Indian and US freedom of information acts, which makes the Bank a world leader among multilateral institutions on information disclosure.
The group’s Post-Crisis Strategy sharpens its strategic focus on targeting the poor and vulnerable, especially in Sub-Saharan Africa; creating opportunities for growth with a special focus on agriculture and infrastructure; promoting global collective action on issues from climate change and trade to agriculture, food security, energy, water and health; strengthening governance and anti—corruption efforts; and preparing for crises.
Operational Reforms will include Investment lending reform to improve the focus on results, increase speed and delivery, and strengthened risk management.
Strengthened governance and anti-corruption efforts are expected to provide more resources for prevention and coordinated sanctions to fight corruption, including the new cross-debarment agreement announced this month with multilateral development banks.