Indian Finance Minister P Chidambaram on Monday (May 05) in Madrid, Spain criticised the Asian Development Bank’s Long Term Strategic Framework (LTSF) plan because of its increasing rely on private sectors as he said while addressing the meeting, “The private sector would have to play a more important role in the development of the Asia and Pacific region; however, it is our belief and experience that the bulk of the resources for infrastructure would still have to be found through the public sector.”
Stressing on LTSF document’s content, FM Chidambaram said that the private sector lending should not be enhanced in the cost of public sector as public sector also plays very crucial roles in development. “The fundamental role of the ADB as a multilateral development bank should not be diluted by its over-emphasis on non-sovereign loans at the cost of sovereign loans,” he added.
Speaking in the annual general meeting of ADB in Madrid, the capital of Spain, Indian Finance Minister P Chidambaram suggested ADB, “A portfolio restructuring plan for the ADB to increase the share of private sector in annual loans to 50 per cent will be consistent with the continued need for a vibrant public sector, and this twin strategy will succeed only if total loan approval and disbursement is enhanced significantly.”
However, he also appreciated the ADB's vision regarding "an Asia and Pacific Region free of poverty" and its mission to help its Developing Member Countries (DMCs) in reducing poverty and improving living conditions and quality of life, Chidambaram welcomed the ‘ADB’s strategy 2020’.
ADB has set a strategy 2020 for eliminating poverty from its member countries by 2020 and to focus on the five core sectors including infrastructure, environment, regional cooperation and integration, financial sector development, and education.
But he added his suggestion as being one of the major partners and beneficiaries of ADB, “we would also like to see more stress on agriculture and irrigation and on health-related infrastructures.”
Stressing over the importance of agricultural sector, Chidambaram added, “It would be both premature and inappropriate for ADB to disengage from agriculture fully. Improvement in irrigation infrastructure is important for increasing food grain production.”
Expressing the need for ‘General Capital Increase’ (GCI), Finance Minister said, “We are deeply concerned with the resource position of ADB. With the planned level of lending in the next three years, the OCR lending headroom will be exhausted in 2010. There is an urgent need to focus attention on resource mobilization.”
While illustrating the India’s point of view, Chidambaram said, “India has stressed the need for augmenting the Capital resources of ADB. Any further delay will be at the cost of ADB’s commitments and its credibility. Unlike the past, where unsubscribed or partially subscribed shares were kept aside for allotment to new members, I suggest that this portion may be offered to the subscribing members.”
Appraising the India’s growth and its enhancing role Asia’s development, Chidambaram quoted, “As one of the largest and fastest growing economies in the region, India looks forward to enhancing the quality of its engagement with ADB and for a larger role for the ADB itself in the development of the entire region.”
India needs USD500-billion for infrastructure development by 2012, and it estimates that out of which only USD150-billion would come from the private sectors. Thus, India is stressing also to strengthening the public sector.
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