World Bank should focus on mobilising greater private capital and creating jobs, says FM Sitharaman

New Delhi, Finance Minister Nirmala Sitharaman on Thursday called for greater mobilisation of private capital to create jobs, boost productivity and reduce poverty, while urging the World Bank to offer competitive financing and strengthen the role of developing countries in its governance.

Speaking at the Development Committee Plenary of the World Bank in Bangkok, Thailand, Sitharaman said productive and better-paid jobs remain the most effective pathway to poverty reduction and shared prosperity amid growing energy market stress, trade fragmentation, climate pressures and rapid technological change.

"We welcome the continued focus on mobilising private capital and creating jobs. At a time of growing energy market stress, trade fragmentation, climate pressures, and rapid technological change, productive and better-paid jobs remain the most effective pathway to poverty reduction and shared prosperity," she said during her intervention.


She outlined six priorities for the World Bank Group, including creating an enabling ecosystem for jobs, placing the private sector at the centre of the development agenda, ensuring affordable financing, addressing market failures, reviewing governance indicators and strengthening the voice of developing countries.

Sitharaman said sustainable job creation requires high-quality and inclusive economic growth, supported by macroeconomic stability, efficient infrastructure, simple and predictable regulations, and wider access to finance and skills.

India's experience shows that last-mile connectivity to energy and job markets, large-scale physical and digital public infrastructure, financial inclusion and regulatory trust in market forces are critical to improving productivity and creating jobs at scale, she said.

Emphasising the role of private enterprises, particularly micro, small and medium enterprises (MSMEs) and startups, the finance minister said mobilising private investment is essential for development.

However, she said success should be measured not by the volume of financing mobilised but by the jobs created and improvements in productivity.

Sitharaman pitched for stronger collaboration among the International Bank for Reconstruction and Development (IBRD), the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA), along with faster operationalisation of the World Bank Group Guarantee Platform.

Developing economies face a shortage of risk capital, and guarantees and risk-mitigation instruments are among the most effective tools to accelerate risk-capital formation and attract private investment, she said.

The World Bank must remain a development partner through competitive pricing, tapping tools like local currency financing, stronger guarantee products, and lower transaction costs, she said, adding that affordable, predictable, and accessible financing must remain at the core of the middle-income strategy.

With regard to the World Bank's knowledge and operational agenda, Sitharaman said it should focus on addressing market failures in areas such as urbanisation, tourism, agricultural exports and critical minerals.

She also called for greater attention to the use of artificial intelligence to strengthen state capacity in developing countries.

On the Worldwide Governance Indicators and similar composite assessments, Sitharaman sought a comprehensive review and revision of existing methodologies to make them transparent, objective, evidence-based and better aligned with current realities and the diverse development experiences of member countries.

Such a review is essential to preserve the integrity of the World Bank's knowledge products, she said.

She said the success of the World Bank's evolution should ultimately be judged by whether its reforms help countries create jobs, raise productivity, reduce poverty and improve living standards.

She emphasised the need to strengthen the voice and representation of developing countries in the Bank's governance architecture. PTI