Editorial 1: Transforming the bank
Context:
- Recently, In his address to the US Congress, Indian Prime Minister Narendra Modi talked about the relevance of multilateral development banks (MDBs) and the need to reform them.
- The current debate on the reforms of multilateral development banks (MDBs) is a subset of the wider debate on the value, content and scope of multilateralism.
- Therefore, it was logical that under India’s G20 presidency, the Expert Group on Strengthening MDBs comprised finance ministers and central bank governors.
Historical evolution of multilateral development banks (MDBs)
- At the end of WWII, delegates from 44 countries met in Bretton Woods to agree upon a series of new rules for international cooperation and reconstruction. This led to the creation of the IMF and World Bank Group (WBG).
- The latter was responsible for providing financial assistance for the post-war reconstruction and economic development of the less developed countries
- Evolution of groups of World Bank: The role evolved over the years and as of date, the WBG comprises
- International Bank for Reconstruction and Development (IBRD) which lends to low-and middle-income (LICs and MICs) countries,
- the International Development Association (IDA) that lends to LICs,
- the International Finance Corporation (IFC) that lends to the private sector,
- the Multilateral Investment Guarantee Agency (MIGA) that encourages private companies to invest in foreign countries and the International Centre for Settlement of Investment Disputes (ICSID) for dispute settlement.
- While the WBG is the oldest and the largest MDB, over the years, several other MDBs and regional development banks (RDBs) have emerged. Today, there are about 15-16 prominent MDBs and RDBs
Emerging challenges to multilateral development banks:
- MDBs have remained relevant as credible institutions to support the development of both MICs and LICs despite far-reaching geopolitical changes, economic crises and uncertainties.
- Yet, it is widely believed that these institutions are no longer suited in terms of the resources, cultural ethos and methods to address the emerging challenges.
- These relate to global public goods, climate change and pandemics. It is widely believed that MDBs are in a quagmire, trapped in their procedures, approach and methods of work and reticent to structural changes
- Given their technical knowledge, experience and credibility in the financial sphere, they need to rediscover their role and methods.
New areas working for MDBs:
- The two traditional goals shared by all multilateral institutions have been the elimination of poverty and fostering shared prosperity.
- However, Shared prosperity at intra and inter-country levels has also worsened in recent times
- Given their technical knowledge, experience and credibility in the financial sphere, they need to rediscover their role and methods
- Central to these issues is the need for matching the ability of MDBs to finance these larger goals without reducing development financing
- The new challenge is to broaden the mandate and vision to address the challenges of transboundary issues and the opportunities connected with climate change
- The WBG estimates that the average annual spending needed to address global challenges of climate change, conflict, and pandemics is $2.4 trillion per year for developing countries between 2023 and 2030.
Broadening the mandate of MDBs along with traditional priorities
- While broadening the mandate of MDBs is imperative, it should not be at the cost of available funding for traditional priorities addressing poverty and inequality as they remain dominant concerns in LICs and even EMDCs, including India
- Need for finance and importantly:
- The MDBs need to create higher leverage from existing funds and to attract private capital.
- They need to fix annual targets and judge performances by the outcomes secured in this altered framework of accountability.
- The need for enhancing recapitalisation emanates from the broad principle that given the inescapable financial requirements after harnessing resources for balance sheet optimisation as well as private capital, there would still be a need to recapitalise the banks.
Role of MBD in capital mobilisation for private investment:
- Importantly, there is a need to mobilise private capital. The current system has failed to raise sufficient private finance.
- On the demand side, there are concerns of moral hazards associated with private capital. On the supply side, private capital is not immune to risks such as those associated with foreign exchange.
- Many projects, therefore, do not move forward because either the risk is too high or the return too low.
- There is also a need for creating an incentive structure and bring changes to the current operating model of the MDBs.
- MDBs must work in close coordination with each other. Broad and deep changes are required to significantly strengthen performance, such as first loss guarantees, realistic return targets and risk management.
Reforming MDBs would mean advocating the voice of the Global South(conclusion)
- There is need to a multiplicity of efforts and initiatives for strengthening the MDBs.
- The Expert Group is expected to take a holistic approach on a wide range of issues and outline a pragmatic implementable programme.
- Making MDBs more relevant for addressing 21st-century challenges would contribute towards enhancing human welfare. Deeper integration with multiple stakeholders is crucial.
- Therefore, reforming Multilateral Development Banks, advocating for the Global South
Editorial 2: In 10 years of Meitei ST demand, repeated pleas to state, Centre
Recent Context:
- A Manipur High Court order on the demand for ST status for the state’s valley-dwelling Meitei people observed that no action had been taken by the government despite the multiple requests submitted by the community since 2013.
- The order triggered protests by tribal groups in the hill districts on May 3, and started a cycle of ethnic violence that has plunged the state into a deep crisis.
- The demand for Scheduled Tribe status for Manipur’s dominant, mostly Vaishnava Meitei community has run alongside the demand for Inner Line Permit (ILP) restricting the entry of outsiders into the state which was first made in Parliament in 1980. The demand for ST status is more recent.
First demand, 2012
- The Scheduled Tribe Demand Committee of Manipur (STDCM) was set up in November 2012 approached the court.
- Meitei Tribe Union (MTU) , which was formed last year , filed a writ petition in the HC in March 2023, numerous memorandums demanding ST status for Meiteis and submitted to both the state and Union governments for reservation.
- It was argued that before the merger agreement between the Manipur kingdom and the Union of India in 1949, the British had designated the Meiteis as a “tribe amongst tribes”. MTU current demand is as per restoration of tribal status that Meiteis under the British,’’
Union Govt response
- The Ministry of Tribal Affairs wrote to the Manipur government on May 29, 2013, requesting a specific recommendation on the inclusion of Meiteis in the ST list, along with the latest socio-economic survey data and an ethnographic report on the community.
- Neither these documents nor any request to include the Meiteis in the ST list has ever been submitted by any government in Imphal.
- Since the 2013 letter, some 30 different representations have been made to the state government, and another 10 to the Indian government in support of the demand
Current government stand:
- In December 2020, the STDCM sought to submit its memorandum to Home Minister Amit Shah, who was on a visit to the state.
- Thereafter, the Manipur Home Department received a communication from the Union Home Ministry that pointed out that the state had not submitted the requisite documentation to the Centre.
- With the state government silent on the issue, STDCM volunteers stormed the office of Chief Minister N Biren Singh in December 2021. The Chief Minister was not present, and the volunteers left another memorandum.
Old ‘permit’ system
- The first census of Manipur in 1881 reported a total population of 2,21,070 — 1,17,108 Meiteis, 85,288 individuals belonging to the hill tribes, 105 foreigners and Muslims, and 18,569 Mayangs (any non-Manipuri Indian).
- In 1901, the Manipur kingdom devised a “permit” or “passport” system to control the entry of “foreigners” (which was understood to include other Indians as well) and non-Manipuris. The population of Manipur at this time was 2,84,465 (1901 Census).
- Subsequently, “foreigners” who wished to visit Manipur would need permission from the Manipur Durbar, and pay a tax.
Identity, not quota
- According to Meity community representative, “This issue is important to us because it is about preserving Meitei identity and culture. In 1951, the population of Meiteis was 59%, which came down to 44% in 2011.
- It isn’t even about reservation. There are sections of the Meitei community who have SC status. Meiteis were also given OBC status so we do have some reservation,” Keithellakpam said.
- The struggle was about the protection of the Meitei identity and lands. “We occupy only 8% of Manipur’s land despite being the dominant community.
- Tribal groups, on the other hand, argue that they now make up 40% of Manipur’s population, and are underrepresented in the Assembly.
Conclusion:
- As the demand for reservation and representation should be within the domain of constitution and through peace. along with it there is need to form a committee with equal representation of Centre- state government along with concern communities for the redressal of grievances within the framework of constitution
- As, Peace and Harmony is prerequisite for the society and national development.