**OT** Sanctions on India handicap World Bank
Agencies/Washington
The World Bank has said it wants to resume "higher level" of lendings to India but was "constrained" because of the post-Pokhran sanctions imposed by the United States, bank officials said.
"We have been constrained for the past two years by the imposition of economic sanctions which has limited our lending in certain sectors but we have been able to maintain (the loans and credits) at lower levels between $1 and $1.5 billion a year," World Bank officials said.
Although our current assistance still maintains a high level of lending, it is still not the promised level and "we are very eager to resume higher levels as soon as possible, the officials added.
The bank noted that the Indian government had demanded an increase in the lending level by the bank and IDA two years ago and the same was accepted "at that time".
"We agreed to increase the level of lending by the bank to $3 billion. And, in 1998 (the year of the nuclear tests), we did achieve the level, which was committed before the test, the officials said.
Although the US Congress had passed a legislation authorising President Bill Clinton to exercise his waiver authority not only in the case of Pakistan, but also India but, so far, the president has refused to exercise his authority to make World Bank operations normal in India.
The officials said that the bank is now focusing lending to states which can make the best use of the money.
For instance, the bank is not lending anything to Punjab because the state is giving electricity and water free and "we don't think it is a sustainable policy."
But the officials were very upbeat on India, noting that India has carried out a major shift in economic policy 10 years ago.
Until about the early 90's, India was a pretty closed country and dominated by socialistic economic policies. This led to a very difficult time and in 1991, it ran into both fiscal and trade imbalance that led the country almost to default on the external debt.
But the government's decision to change policies radically and adopt liberal economic policies has led to a faster pace of economic growth.
"India," said the officials, "has really taken off in the last ten years."
-The Pioneer (New Delhi) |
