Goes past Russia, Canada, Australia in voting power.
Emerging countries like India, China, Brazil, Indonesia, Mexico and Turkey, with greater voting power, would now have more say in the day-to-day activities of the World Bank. India has become the seventh-largest shareholder of the bank.
This was decided at a meeting of the World Bank’s development committee that considered making some significant changes in the bank’s voting structure in Washington on Sunday. “While there is an overall shift of 3 per cent vote share to developing countries, bringing their total vote share to 47 per cent, India would now be the seventh-largest shareholder in the bank,” the finance ministry said in a statement today.
While giving more teeth to the developing countries on account of their economic growth, the decades of dominance exercised by the developed countries like UK, France, Germany, the Nordic and Benelux countries, Japan, Australia and Canada would now decrease. As a result of these changes, India has surpassed Russia, Canada, Australia, Italy and Saudi Arabia in terms of more voting powers.
While India’s voting power rose to 2.91 per cent, that of China leaped to 4.42 per cent, making it the third-largest shareholder. The finance ministry also said the changes reflected rapid growth of the Indian economy, which is expected to grow further in the near future, thereby strengthening its position in World Bank.
For the first time in three decades, the bank has also decided to expand its capital base through a General Capital Increase. As a result, India would now be able to secure additional assistance of around $7-10 billion from the bank. India was represented by Finance Secretary Ashok Chawla and other officials.
Developing nations had been lobbying for a long time for an increase in their power in daily operations of the bank and disbursement of funds. “Our decisions will ensure that the World Bank Group continues to play a lead role in eradicating poverty and fostering development globally, so that its storehouse of knowledge and resources is put to best use. By giving the World Bank Group a new sense of purpose and direction with enhanced governance and strength, we will ensure the vision of its founding fathers is fulfilled,” Chawla was quoted as saying in the release.