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'Global environment inhospitable'

By Sridhar Krishnaswami

Washington SEPT. 28. The declining trend in transferring resources to the developing countries, falling back of private capital flows, the sharp increase in spreads on emerging market benchmark bonds, concentration of foreign direct investment flow and declining net transfers from multilateral institutions are the concerns that will have to be dealt with, the Union Finance and Company Affairs Minister, Jaswant Singh, has said.

"All these factors have made the global environment unjustly inhospitable for developing countries,'' and there was the responsibility of addressing these issues and respond to the challenges, Mr. Singh said in his Statement to the Development Committee.

The Minister, here for the annual meeting of the World Bank and the International Monetary Fund, noted the fresh commitments of the IDA 13 Replenishment. "Given the critical role that the IDA plays in global poverty reduction efforts, we need to substantially increase available IDA resources as well as a longer term replenishment period (say for five years instead of three years) to enhance the certainty of resources available to developing countries,'' Mr. Singh said.

He endorsed the World Bank's pro-active role in the multi-dimensional fight against HIV/AIDS. At the same time, he pointed out that the fight "should not detract against the criticality of other primary health interventions,'' such as the fact that 5,500 children die every day from diseases caused by consuming water and food polluted by bacteria.

On market barriers put up by the developed countries, Mr. Singh said that the World Bank's analytic work should be focussed at further advocating the dismantling of trade-distorted barriers in the developed world and at strengthening the ability of the smaller developing countries in the realm of negotiations.

He called for need-based developmental assistance that focussed solely on economic factors for determination of aid. "Non-economic considerations or strategic purposes have no role in the process of resource allocation,'' he said.

On the World Bank's role in the Initiative for the Heavily Indebted Poor Countries, Mr. Singh said it had been recording progress, although at a slower pace than expected, with one of the worrisome factors being the delayed or even the non-delivery of promised debt relief.

In his Statement to the Development Committee, Mr. Singh reiterated India's support to the initiative of the World Bank and the International Monetary Fund to curb the menace of money- laundering and combat the financing of terrorism. "India's fight against terrorism is almost two decades old,'' Mr. Singh said, welcoming the Bank/Fund emphasis on technical assistance and capacity-building.

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