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Economically, PM Narendra Modi has done well for the country: World Bank President Jim Yong Kim

Author: ET Bureau
Publication: The Economic Times
Date: July 1, 2016
URL:   http://economictimes.indiatimes.com/opinion/interviews/economically-pm-narendra-modi-has-done-well-for-the-country-world-bank-president-jim-yong-kim/articleshow/52999225.cms

Calling Prime Minister Narendra Modi a great leader who has done well for the country on the economic front, World Bank Group President Jim Yong Kim on Thursday said that under his leadership, India's accomplishments have been fantastic. "India is the fastest growing economy in the world. Brexit happened and India proved to be extremely resilient. The inflation rate has been down, growth has been extremely strong, balance of payment is in better shape. Overall, you have to say that economically he has done well," said Kim on a two-day visit to India. The World Bank committed $ 1billion (about Rs 6,750 crore) to support solar energy programme in India.

 Admitting that he is a big fan of the Indian Prime Minister, the president of the multilateral lending agency even went on to say that he thinks Modi's understanding of the World Bank to be more than those at the bank themselves because of his specific demands on priority areas like Swachh Bharat and 24x7 power for all, reports ET Bureau. "I am a big fan of PM Modi and the reason I'm such a big fan is because he does something that all great leaders should do — that is set ambitious targets, set deadlines for those targets and then hold your staff accountable for those targets. That is the tried and proved method of getting results. So we're beginning to see results and it extends to the ease of doing business report."

On RBI & Raghuram Rajan The World Bank President described the outgoing Reserve Bank chief Raghuram Rajan as a "great" central bank governor, a "productive scholar" and someone who is well respected. "I think he has done a great job," he told mediapersons and added that the government will continue with the important principle of having an independent central bank. "There are many things that they (government) have said that... it is not about a single person it is about certain principles, practice that they would adhere to...I don't expect there will be a major shift because of the principles of independent central bank," he said.

On Indian banks' rising NPAs Commenting on its impact on the economy, World Bank's country director in India Onno Ruhl said both the RBI and the government have recognised the problem and the linkages of NPAs in various sectors, especially power. "I think on the domestic banking sector, it is obvious that there are NPA issues. The government has given the right attention, a lot of work has been done by the RBI. Public sector Banks have been adequately provisioned...that process should continue," said Mengistu Alemayehu IFC's Regional Director for South Asia. IFC is member of World Bank Group.

Brexit and Multilateralism The UK's exit from the European Union has led to a period of uncertainty which translates into difficulty for developing countries to get access to capital, Kim said. "India again has been very resilient to what is happening in Brexit. If there is continued uncertainty, if there are more events that create more uncertainty than certainly everyone would be affected, including India," he said.

 However, at a time when doubts have been raised at multilateralism with this exit, Kim said: "I am a very strong believer in multilateralism and European Union is one of the greatest examples of our attempted multilateralism, I believe the key to peace and prosperity, shared prosperity, lies in strengthening multilateralism and not move away from it. That is my very strong belief. "

Voice vote in multilateral institutions Sounding hopeful that in the next one year there could be clarity on voice and quota reform at the Bank, he said: "I hope it is within the next year we are going to know about all those issues." His statement comes in the wake of India seeking voice and quota reforms in multilateral bodies like the International Monetary Fund and the World Bank so that emerging economies can have a greater say in the working of these institutions.

On competition from new banks Stating that that there is "plenty of room available" for the Asian Infrastructure Investment Bank and the New Development Bank by the BRICS which will provide challenges for existing groups like the World Bank, Kim said his bank will now have to now redefine its specific advantages to get better. This is so because the need for infrastructure development for the world is around $1-$1.5 trillion every year.

 However, he added the bank's vast experience and its truly global nature are something that the new ones will not offer.

"It is a matter of having knowledge of all best example of successful developmental projects and bring it to the client because we are the one bank that is truly global. Also we are able to be very creative because 70 years of experience. There is all kind of different things we can do that the New Development Bank will take some time. The most important advantages are the people."
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