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WB, IMF say ties with India are 'terrific' despite sanctions

World Bank president James Wolfensohn appears sympathetic to India, saying that the bank has made available to the country credit worth $ 1.3 billion since May, when India conducted nuclear tests, attracting economic sanctions.

Speaking at a media conference in Washington yesterday in connection with the Bank-International Monetary Fund annual meeting beginning next week, he said he was proud of what the bank had done in India.

In the past, the World Bank's denial of loans for infrastructure projects in India after the nuclear tests, it was alleged by some Indian leaders, amounted to violation of his lending agency's charter. The charter favours decisions purely on economic and not political considerations. Asked about this, 'Wolfensohn said, "We cannot make political decisions at the management level, but our board is capable of making political decisions.''

He, however, said what the World Bank had done for India ''actually is pretty damn good". ''It had managed to keep up the funding for the 'essential programmes,'' he added.

To drive his point home that relations between the World Bank and India had been ''terrific,'' in spite of the economic sanctions, Wolfensohn said Finance Minister Yashwant Sinha could certify this fact.

''I think we've been able to follow a pretty fine line on India, and we're very proud of it," he added.

He said the World Bank had worked out a basic human needs category. The projects falling under this category were beyond the scope of the sanctions.

The bank has put off discussions on India's infrastructure projects after the May nuclear tests, apparently under the US pressure, with the bare exception of an Andhra Pradesh power project.

''We have put in a power project, which we regarded as a basic human need, and we got it through the board,'' he said referring to the Andhra project.

At a separate media conference on Wednesday, IMF managing director Michel Camdessus said that in spite of the current slow-down, the country's economy had the potential of returning to an annual growth of 7 or 8 per cent while maintaining stability.

He promised the IMF's assistance to help India to achieve higher rate of growth. The IMF's growth projections for 1999 and 2000 are less than 5 per cent.

He said that ''political instability is not the best frame-work for bold (economic) reforms and stimulation of private investment and then growth. I hope that the political situation will stabilise soon.''

UNI

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