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UN, World Bank and IMF Need Urgent Reforms: Sitharaman

Institutions such as the United Nations, the World Bank and the International Monetary Fund need urgent reform as they no longer speak for countries whose problems have gone unanswered for decades, said Finance Minister Nirmala Sitharaman . All of these organizations will have to consider reforming, she told Harvard Kennedy School on Tuesday.

During the conversation with Harvard University professor Lawrence Summers at the conference hosted by the Mossavar-Rahmani Center for Business and Government, Sitharaman said that although reforms in countries are taking place at different stages, these global institutions have remained as they were in recent years. several decades. Many of them no longer speak on behalf of countries whose problems have gone unanswered for decades, be it on trade, security, the monetary framework and financing for development, she said.

There is a desperate need for all these institutions to be more transparent, to represent and speak for countries that are not sufficiently represented; and so I think this is something that needs to happen immediately. When these institutions become more representative, she said there would be a more equitable distribution of resources, more concern for equitable development for growth. All this dialogue that was going on – north-south – seemed to be heading towards insignificance.

But the north-south problems remain. Development has not reached many parts of Africa, many parts of the small islands of the Pacific. Many parts of these countries, even within countries, where there is differentiated development. So I think that’s what would have happened if only this reform program had been taken up by these institutions, she said. Sitharaman arrived in the United States on Monday for a week-long trip to attend the annual meeting of the World Bank and the IMF in Washington as well as the meeting of G20 finance ministers and central bank governors (FMCBG). During the official visit to the United States, Sitharaman is expected to meet with US Treasury Secretary Janet Yellen.

She said that joining the G-20 now for India has its own significance. India has joined the trio, which refers to the president of the G-20, and the one before and the president after the current president. India will assume the presidency of the G20 from December 1, 2022, and Sitharaman said that throughout the year India will work to advance the G-20 agenda.

She said the G20 meeting for her will also be a process to learn how the current presidency is moving the agenda forward. More importantly, the OECD has been working on the much talked about global taxation or taxing these huge big multinationals so that this practice which is now prevalent that they end up paying taxes nowhere.

They do not pay the country where they do business and make profit, nor do they pay tax in the country where they are located, she said, adding that each country’s current tax regime for itself gave them an opportunity to end up paying nowhere, which is good for the business, but absolutely unnecessary for the countries where the business is generated. Today, more than 134 countries have come together to impose a global tax on all businesses that operate in multiple countries, making profits between nations in many geographic jurisdictions, but end up paying no tax in both jurisdictions.