World Bank want its repayments in Rupees

Loan will be sanctioned in dollars but would be repaid in Rupees
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The World Bank is considering whether to make a huge loan to India in rupees rather than dollars.
The Maharashtra state government is seeking a loan worth some $3.5bn but is concerned about the fluctuations in the value of the dollar.
If approved, it would be the first time the World Bank has agreed to a such a loan in rupees. The bank says the money would be invested in health, water, energy and irrigation projects.

World Bank approval

The loan represents some 60% of total costs for the development project which come to nearly $6bn. The idea is that the loan would be sanctioned in dollars, but would be handed over in rupees. All repayments would be in rupees too. This would prevent any changes in the amount to be repaid caused by fluctuating exchange rates.
The loan still has to get the approval of the World Bank, India's central government and the Maharashtra state government. The loan arrangement was discussed at a meeting between World Bank Country Director for India, Isabel Guerrero, and Maharashtra state government officials on Thursday.

In the last few months, the rupee has appreciated sharply against the dollar from 45 rupees to a dollar to 40 rupees to a dollar. One of the projects Maharashtra wants help with is the Mumbai Metro project, projected to cost $2.5bn. It is hoping to receive loans of $1.5bn. The project would connect south Mumbai (Bombay) to the suburbs. Other projects include rural and urban water supplies, power transmission, technical support for a "vision Mumbai" plan and a possible Public Private Partnership (PPP) in irrigation.

World Bank and Knowledge Production

I have been continuing to wonder how the World Bank manages to strangle developing countries through relatively small amounts of money. We all talk of its role of "knowledge provider" and the power that assumes. In keeping my eyes open for examples I couldn't help but notice that in the recently reported changes to its GDP estimates, China and India have fallen by 40%. This has been widely reported in the media.

Now how can the World Bank change its rankings so drastically without its credibility being called into question? So far not a whisper....


http://economictimes.indiatimes.com/Perspectives/India_shrinking/articleshow/2649557.cms

http://go.worldbank.org/B5PYF93QF0

World Bank grants $ 225 mn loan to Bihar

First Bihar Development Policy Loan to aim for economic growth through reforms in agriculture, investment climate, roads, public service delivery in education and social protection
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The World Bank has approved a $225 million loan to Bihar aimed to support the state in implementing reforms in fiscal policy, public financial management, and governance, in order to boost economic growth.
“While India has emerged as one of the fastest growing countries in the world, it faces the challenge of addressing widening economic disparities. Bihar is the poorest state in India with about 39% of population living in poverty,” The Bank said in a statement.
The First Bihar Development Policy Loan is designed to improve fiscal policy, public financial management and governance.
“It aims to boost economic growth through reforms in agriculture, investment climate, and basic infrastructure, with an emphasis on roads. It will also support improving public service delivery in education and social protection,” it said.
“Bihar is a crucial state for poverty reduction and inclusive growth in India,” said Isabel Guerrero, World Bank Country Director for India.
Bihar registered economic growth of 4% in recent years which is much slower than the rest of the country While the state has 8.5% of India’s population, it accounts for only 1.6% of the country’s GDP.
“It is India’s poorest as well as one of its slowest growing states. But with arable land, water resources, favourable demography, and unexploited tourism potential, Bihar has the necessary preconditions to accelerate development. By focusing on accelerating growth and improving public service delivery, this operation will assist Bihar towards achieving the development goals set out in its Eleventh Plan,” she added.

World Bank and Food Security, by Madhura Swaminathan

"There is enough evidence now that the Structural Adjustment Programs initiated by the World Bank have been associated with severe reduction in food subsidies in a large number of countries."

Madhura Swaminathan shares her concerns about the implications of World Bank and the IMF narrow targeting of food subsidies. By reducing the poverty line to an alarming level, the government, under the influence of international financial institutions, abandons millions of Indians to starvation.

Author of several books, like Financial Liberalization and Rural Credit in India (2005), Madhura Swaminathan is an economics professor in the Indian institute of Statistics, Kolkatta.

Alternative to World Bank launched

The Bank of the South, an initiative spearheaded by Venezuelan President Hugo Chávez, was inaugurated on 9 December 2007. The finance ministers of Venezuela, Brazil, Paraguay, Uruguay, Argentina, Peru and Chile will all sit in the bank’s board of directors.

The new bank is Latin America’s response to years of subservience to the dictates of U.S.-dominated financial institutions. "The Bank of the South is a strategy ... aimed at freeing us from the chains of dependence and underdevelopment," Chávez said.

The Bank of the South will fund projects ranging from infrastructure development to anti-poverty programs without the "strings attached" model of the International Monetary Fund and the World Bank that only seek to further the interests of foreign capital.

It is set to have its headquarters in Caracas, with further offices in Buenos Aires and La Paz. It is scheduled to be operational in early 2008, with an estimated initial capital of 7 billion dollars.

The bank is planned to finance development and integration projects with a low rate of interest.

African Diaspora to fund TNCs and the G8?

A new plan conceived by the Bank, a "Diaspora Remittances Investment Fund", could take the foreign exchange earned by Africans living abroad who send money back home, and leverage it to fund World Bank organized projects.

What does this mean? The Bank would say that this is an effort to improve the economic impact of remittances. If you are among the critics of the Bank who see the Bank as a global institution which influences the policies of Southern governments to the benefit of multinational capital, this new scheme looks like a shameless attempt to co-opt the flow of African remittances to this purpose.

There will have been four Bank publications on remittances this year alone with the upcoming The International Migration of Women (November 2007). The others are:

-Migration and Remittances Factbook (print version December 2007). Online at www.worldbank.org/prospects/migrationandremittances.
-International Migration, Economic Development & Policy (2007)
-South-South Migration and Remittances(2007)

The Bank has published on its web site (in bold no less) that "recorded remittances to developing countries are estimated to reach $240 billion in 2007. The true size of remittances including unrecorded flows is even larger". Bank and the private sector eyes are popping, and the new fund is the first formal plan from the Bank to directly channel this global financial flow.

The plan may be modeled on similar inititatives in Latin America. The Inter-American Development Bank’s Multilateral Investment Fund (MIF) which promotes private sector development in Latin America and the Caribbean, has various programs to manage remittances.

For more information about the "Fund", see:
http://allafrica.com/stories/200712020012.html

European Parliament passes resolution to end taxpayer support for fossil fuel projects

ECA's promotes export in developing countries which contribute to long term green house emission.
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On November 29, the European Parliament overwhelmingly passed a resolution on trade and climate change calling for the “discontinuation of public support, via export credit agencies and public investment banks, for fossil fuel projects.” The resolution asks EU governments to propose legislative mechanisms that would force export credit agencies and the European Investment Bank to “take account of the climate change implications of the funded projects” and to “impose a moratorium on funding until sufficient data are available.”
The resolution also calls on financiers to work harder to transfer public funds to renewable energy and energy efficient technologies. This move was applauded by civil society organizations who argue that government leadership is needed to hold finance and trade agencies accountable for ignoring the effects their activities have on the climate.

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