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Sinha-led panel sees new role for World Bank

The World Bank's development committee has chalked out a new role for the multilateral agency in the face of foreign direct investment increasingly overcrowding development loans from these agencies.

The committee, under the chairmanship of Union Finance Minister Yashwant Sinha, said it was in this context that the World Bank's role should be "selective and strategic" so that the loans act as catalyst for policy and institutional changes.

As in most cases, the bank's loan formed a small share of the overall external financing of a country, the assistance should be mainly for capacity building and pro-poor policies.

This should be besides support from development partners for sustainable and equitable growth of developing countries.

The committee, which ended its deliberations on Monday during the annual IMF-World Bank meeting, also stressed on the importance of trade to economic growth, bank sources said, adding the multilateral agency could help developing countries in increasing their access to global markets.

Finance ministers of various countries agreed at the meeting that money-laundering was a major issue that affected both large and small economies and the issue needed to be tackled effectively.

The development committee is the policy-setting body of the World Bank.

The ministers, however, felt the primary responsibility in dealing with money-laundering lay with the countries affected by it and the specialised institutions that have a mandate and expertise in the area.

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