It would be tragic if World Bank fails to meet members' capital need: P Chidambaram

TOKYO: India on Saturday said it would be a "tragedy" if the World Bank fails to meet capital needs of the member countries when they need it the most.

Appreciating the response of the World Bank Group to 2008-09 financial crisis, Finance Minister P Chidambaram said it is a matter of concern that the World Bank Group is now "constrained in responding in a similar manner".

"The noticeable deterioration in the capital adequacy of the Bank is indicative of the vulnerability of the Bank ... it would be a tragedy if the Bank is handicapped in meeting the requirement of the member countries when they need it the most," he said at the Development Committee meeting of the World Bank here.

He was representing the Constituency consisting of Bangladesh, Bhutan, India and Sri Lanka.

"We do not doubt that the Bank must have taken stock of the situation and decided on an appropriate course of action. We would appreciate if that is shared with us. All options must be considered. We must eschew the temptation to succumb to pre-determined positions," Chidambaram added.

Stressing that investment in infrastructure in developing economies is critical for creating growth and jobs, and for rebalancing global demand, he said that flow of long term finances is extremely important for this.

"Even in normal times, there is a large role for the Multilateral Development Banks ( MDBs) in making long-term development finance available to emerging and other developing economies.

"During the present crisis, when capital flows have got disrupted and the risk appetite for long term financing is low, the role of MDBs in infrastructure financing has become extremely crucial," he said.

He said that the meeting is taking place at a time of continuing crisis and uncertainity in many countries have dimmed the prospects of a quick turn-around.

"The availability of resources for development and the flow of private capital have contracted ... At this juncture, we need a well coordinated, collaborative and bold global effort to address these challenges," Chidambaram said.

Welcoming the ' World Development Report 2013 on Jobs', Chidambaram said,"It is good that the WDR is not prescriptive and it provides space for governments to chart their own course ... We feel that the Bank can be very helpful in providing data and diagnostics".