NEW DELHI:
Former US treasury secretary Larry Summers Saturday said India needs to grow at 8% to bring about “transformative changes” in the lives of millions, while seeking more capital and a bigger mandate for multilateral development banks (MBDs), such as the World Bank. Summers said he expected the Indian economy to see an eight-fold jump until the middle of the century.
Delivering a lecture organised by the department of economic affairs and industry body Confederation of Indian Industry (CII), Summers, who is co-chair of the independent export group on MBD reforms, identified climate change and pandemics among the biggest challenges facing the globe and said more money needed to flow to poor countries, which in the current scenario would only be raising money to repay their loans to MDBs.
While he complimented agencies such as the World Bank for leveraging the capital base, he said the institutions need to be “transformed” and their mandate needs to be expanded to deal with new challenges such as climate change and global public goods, while retaining poverty reduction as a key priority.
He said unlike building bridges or stadiums where the actual cost was always higher than the initial estimate, when it came to environment policies, the cost always turned out to be lower and cited the example of cost of renewable energy. In line with the recommendations of the independent expert group, he reiterated the need for a triple agenda for MBDs, trebling their lending flows, and use of innovative finance and use of the private sector to deliver results better.
“These institutions need to be quantitatively bigger and qualitatively better,” Larry said, while calling for the MDBs to adjust to the 21st century requirements.
