Worrying clouds have developed on horizon: Mukherjee

Washington (PTI) - Observing that the developing
world withstood the economic turmoil of 2008 in a commendable
fashion, Indian Finance Minister Pranab Mukherjee on Saturday
warned that worrying clouds have developed on the horizon even
as countries recover from the crisis.
"The financial crisis in the euro zone, the downgrading of
US sovereign debt, the concerns about fiscal sustainability in
high-income countries, uneven and sluggish global growth,
lower capital flows to developing countries, higher inflation
rates in several emerging economies -- particularly for food
products -- and lastly, the more frequent recurrence of
natural calamities, are all issues that could collectively
snowball into a crisis of significant proportions with dire
consequences for the poor in all countries," Mukherjee said.
Speaking during the World Bank Development Committee lunch
on the current state of the global economy, growth and jobs,
the Finance Minister said that developing countries see the
World Bank as an important partner to help them meet any
foreseen and unforeseen challenges, as well as a strong ally
for their long-term development finance needs.
"But we are faced with a situation where IBRD and IFC are
unable to fulfill even normal client demand and are forced to
be 'selective' as a result of this resource constraint. They
have no headroom to expand lending rapidly in case there is a
spike in demand resulting from another crisis or calamity.
This needs to be addressed immediately," he asserted.
Commenting on the recent World Development Report (WDR),
Mukherjee said it would be useful for it to focus on how
protectionism hurts jobs globally, in both developing and
developed countries.
The report should also cover policies and institutional
mechanisms that would encourage women's participation in "good
jobs".
"From a developing country perspective, jobs require a
massive shift in employment from agriculture to manufacturing.
From the demand side, the WDR should examine the role of the
private sector, MSMEs, self-employment opportunities and
agro-industries in job creation," he said.
"From the supply side, the WDR should come up with the
requirement and strategies for quality skill development on a
very large scale. The WDR should also focus on managing
transition in terms of social protection and reskilling
requirements, as even the best of times would leave large
numbers of people temporarily unemployed," Mukherjee said.
The Finance Minister said India's demographic dividend is
as much of an opportunity as it is a challenge.
Over 70 per cent of Indians will be of working age in
2025.
"In this context, our national strategy focuses on
universalising access to secondary education, increasing the
percentage of scholars in higher education and providing skill
training. The National Policy on Skill development has set a
target of imparting skills to 500 million people by 2020. This
is a huge task," he said.
India is determined to make all-out efforts for achieving
this goal, the Finance Minister said.
"Given our large and youthful population and the looming
demographic dividend, we look forward to the findings of this
WDR with keen interest," he said.