World Bank to step up support for India’s poorest states

World Bank president Jim Yong Kim addresses a press conference in New Delhi yesterday.

Agencies/New Delhi

World Bank president Jim Yong Kim said yesterday the institution will funnel more development support to India’s poorest states as part of its drive to end poverty globally within a generation.

Kim, on his first trip to the nation of 1.2bn people since becoming the bank’s chief last July, said India’s poorest seven states are home to over 200mn who have no access to education, healthcare and other basic services.

“Achieving the World Bank Group’s mission of ending global poverty will require us to step up our support for India’s poorest citizens,” Kim, winding up a three-day visit, told a news conference in New Delhi.

During his visit, Kim held talks with Prime Minister Manmohan Singh and other leaders and said he gained a deeper understanding of the challenges India faces as it seeks faster and “more inclusive” economic growth.

“We have an historic opportunity to accelerate the reduction of poverty in India. The World Bank Group is committed to supporting the Indian people as they pursue this crucial goal,” Kim said.

The Bank said the plan to focus development resources on India’s most deprived states would not mean any increase in the $3.0-5.0bn it lends on average annually to the emerging market giant.

“But over a period of time a higher percentage of the Bank’s support to India would be aimed at the seven low-income states,” said World Bank spokesman Sudip Mozumder.

The seven low-income states represent half of India’s estimated 400mn people living on less than $1.25 a day - the Bank’s definition of dire poverty.

They include two of its most populous states, Uttar Pradesh and Bihar.

“I leave India with a profound admiration for the remarkable development gains this country has achieved in recent decades. India’s experience holds valuable lessons for the World Bank Group and for countries around the world,” he said.

India is among the largest receivers of the World Bank’s assistance. Between 2009 and 2013, the World Bank Group lent around $26bn to India, according to a statement released by the Bank.

In the financial year 2009-10, the World Bank Group’s assistance to India increased to $11bn in the aftermath of the global financial crisis.

The support between 2009 and 2013 includes $12bn from the International Bank for Reconstruction and Development (IBRD); $8.3bn from the International Development Association (IDA); and a further $5.2bn in investments from the International Finance Corporation (IFC).

As of January 2013, total IBRD and IDA net commitments stood at $23bn (IBRD $13bn and IDA $9.9bn) across 77 projects.

At the end of January 2013, IFC’s portfolio contained 219 projects, amounting to committed and disbursed exposure of $4.1bn, according to data released by the World Bank office here.

Since assuming the job of Bank president, Kim has been seeking to recast its image to make fighting poverty a main focus and refashion the institution as “the solutions bank” that dispenses expertise and not only development loans.

He recounted that after he graduated from university in the US he took part in a protest against the Bank’s “proscriptive policies that only focused on growth,” but said things have changed dramatically at the institution.

At the same time, “we have to be smart about fighting poverty - we have to have economic growth because without growth you can’t lift people out of poverty,” Kim said.