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World Bank warns Israel-Gaza conflict may surge commodity prices

In Gaza, the impact of the conflict on employment has been catastrophic, with a staggering loss of 61% of jobs since hostilities began…reports Asian Lite News

The ongoing conflict between Israel and Hamas, with its roots extending back over seven decades, continues to cast a long shadow across the Middle East. Recently, hostilities have intensified, with both sides experiencing significant casualties. On October 7 , Hamas initiated a series of assaults on Israeli towns, prompting a robust military response from Israel. With many casualties on both sides, the devastation is obvious. But, the impacts of the conflict have rippled throughout the world, with protests in many western nations and significant economic implications.

World Bank warns that oil prices may reach unprecedented levels

The World Bank has raised alarms that the escalation of the Israel-Gaza conflict could significantly disrupt crude supply, potentially driving oil prices to a peak of $157 a barrel. This dire prediction echoes the crisis of the 1973 Arab oil embargo, suggesting a potential shrinkage in global supply by six to eight million barrels per day. The repercussions of such a supply cut could send prices skyrocketing, affecting economies worldwide.

Under a less severe yet substantial “medium disruption” scenario, which mirrors the 2003 Iraq war’s impact, the supply reduction could range from three million to five million barrels per day, pushing prices to hover between $109 and $121 a barrel.

Despite these concerning scenarios, the World Bank’s baseline forecast is somewhat more optimistic. It projects oil prices to average $90 a barrel in the current quarter, with a decline to $81 next year, assuming a global economic downturn. Investment banks like Goldman Sachs and UBS anticipate a stable oil price around $90 to $100 per barrel over the next twelve months.

Of course, it’s not just oil, but most commodities. Gold, being a safe-haven, appears to be appealing in such conflicts. Gold trading , of course, seeks to capitalise on this, despite the inherent riskiness of CFD trading. But, when the safe-haven assets become the subject of traders’ attention, they can increase in volatility, making them less of a safe-haven.

In Gaza, the impact of the conflict on employment has been catastrophic, with a staggering loss of 61% of jobs since hostilities began. This equates to about 182,000 lost jobs, as reported by the International Labour Organization (ILO). The economic fallout from this crisis extends to the occupied West Bank, which has seen a 24% loss in employment, or roughly 208,000 jobs, due to the war’s spillover effects. Daily income losses for the two Palestinian territories are estimated at $16 million. The ILO’s assessment paints a grim future for the local economy, which will likely struggle with the repercussions of this crisis for many years. Gaza’s pre-war economic conditions, marked by severe deprivation and one of the world’s highest unemployment rates, only exacerbate the situation .

Conversely, in the Israeli town of Sderot, close to the Gaza Strip, businesses persevere despite the conflict. Factory owners, among many other sectors, face the burden of repairing war damages and safeguarding their workforce. While both economies will take a hit, the suffocation of Gaza has resulted in greater economic damage.

How Russia’s invasion impacted commodity prices

Russia’s invasion of Ukraine in early 2022 set off a chain reaction in global commodity markets, significantly influencing prices across the board. The war caused immediate disruptions in the supply of oil and gas, particularly affecting Europe, which had been heavily reliant on Russian energy. The situation exacerbated existing tensions in energy markets, pushing prices upwards as countries scrambled to find alternative sources.

It’s useful to draw comparisons here of how conflicts impact commodities, because these two large conflicts are in such close succession to one another. While Europe isn’t dependent on Israeli or Palestinian energy like it was with Russia, global prices are still impacted.

ALSO READ-World Bank: Half of Afghan Population Living in Poverty

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World Bank: Half of Afghan Population Living in Poverty

The Ministry of Economy emphasised the necessity for the international community to remove the restrictions imposed on the economic sector for economic progress in the country…reports Asian Lite News

In its latest monthly report known as the “Afghanistan Economic Monitor,” the World Bank has noted that half of all Afghans are living in poverty, as reported by Tolo News on Thursday.

According to the report, total exports amounted to USD 1.3 billion from January to September 2023, marking a slight decrease of 0.5 per cent compared to the same period in 2022. Pakistan remains Afghanistan’s largest export market, accounting for 55 per cent of total exports, followed by India at 29 per cent.

The report further reveals that imports reached USD 5.7 billion, showing a 27 per cent growth. Khairuddin Maiel, deputy of the Afghanistan Chamber of Commerce and Investment, commented, “Certainly, in these nine months, our exports have decreased, and the reason for the decrease is that we did not export coal from the country, and secondly, we had these problems at the borders with our neighbours.”

Simultaneously, the Food and Agriculture Organisation of the United Nations (FAO) and the c (WFP) issued a joint statement warning that acute food insecurity is likely to deteriorate further in 18 hunger hotspots, comprising a total of 22 countries, Tolo News reported.

Economist Sayar Qurishi highlighted, “One of the main reasons why Afghanistan’s economy is in the current situation is that after the fall of the republic and the suspension of international aid, unfortunately, the economy has shrunk by 25% in the last two years.”

The Food and Agriculture Organisation of the United Nations and the World Food Programme issued a joint statement warning that acute food insecurity is likely to deteriorate further in 18 hunger hotspots, comprising a total of 22 countries, Tolo News reported.

The Ministry of Economy emphasised the necessity for the international community to remove the restrictions imposed on the economic sector for economic progress in the country. Abdul Latif Nazari, deputy of the Ministry of Economy, stated, “Our demand from the international community is not to make the people of Afghanistan suffer and for the economic progress and development of Afghanistan. The removal of restrictions and obstacles is a necessity.”

Previously, the World Bank had reported that Afghanistan’s economy had stagnated and the unemployment rate in the country had doubled after the establishment of the Islamic Emirates, Tolo News reported. (ANI)

ALSO READ: Taliban to Build Shelters for Returning Afghan Refugees

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World Bank Grants $210M to Bangladesh For Women, Children

The project will contribute to early childhood development by supporting the expansion and strengthening of the government’s existing social protection program…reports Asian Lite News

The World Bank has approved 210 million U.S. dollars for a Bangladeshi project to provide cash transfers and counseling services to improve nutrition and directly benefit about 1.7 million pregnant women and mothers of children under four years in vulnerable households.

Under current education and health systems, a child born in Bangladesh would only be 46 percent as productive as they could potentially be, Abdoulaye Seck, World Bank country director for Bangladesh and Bhutan, said in a statement Wednesday, Xinhua news agency reported.

“But this can be changed. Ensuring adequate nutrition prenatally and in the first 1,000 days of life, and responsive caregiving throughout childhood, help maximize a child’s brain development and health. This enables them to be more productive and earn more when they grow up. The project will help poor mothers be informed on timely and appropriate care for their children and provide income support to act on that learning to improve their children’s health and wellbeing,” said Seck.

Despite significant gains in human development, poor nutrition and learning poverty among children remain a pressing challenge in Bangladesh and were exacerbated during COVID-19 lockdowns.

This has long-term implications for children’s cognitive development and their future productivity. The project will contribute to early childhood development by supporting the expansion and strengthening of the government’s existing social protection program, the Mother and Child Benefit Program.

Local currency card

Bangladesh on Wednesday launched a local currency card, Taka Pay, the first of its kind in the country, as part of its efforts to build a cashless society.

Prime Minister Sheikh Hasina on Wednesday inaugurated Taka Pay from her official residence Ganabhaban in capital Dhaka, reports Xinhua news agency.

The card will be issued by the state-owned Sonali Bank and the privately-owned City Bank and Brac Bank in collaboration with the central bank of Bangladesh.

Speaking at the inauguration ceremony, Hasina said this card will be a groundbreaking step for building a cashless society in Bangladesh.

She said as an independent and sovereign country, Bangladesh’s financial system has to be independent and sovereign to reduce dependency on others.

“We must not be dependent on any single hard currency,” she said.

The Prime Minister also stressed the need for data security for every holder of the newly introduced debit card.

ALSO READ: Bangladesh rejects OHCHR’s statement on violence

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UAE President, World Bank Chief Discuss Global Economic Situation

The President welcomed Banga and discussed cooperation between the UAE and the World Bank…reports Asian Lite News

UAE President His Highness Sheikh Mohamed bin Zayed Al Nahyan received Ajay Banga, President of the World Bank Group, at Qasr Al Shati in Abu Dhabi.

The President welcomed Banga and discussed cooperation between the UAE and the World Bank. The meeting also addressed global economic conditions, the economic impact of crises, and the contributions of the World Bank in supporting regional and global development.

The meeting touched upon the upcoming UN Climate Change Conference (COP28), which the UAE will host later this year. The importance of climate financing in bolstering the global response to climate change and achieving sustainability goals was highlighted, as well as the role of the World Bank in this regard.

Later, H.H. Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, First Deputy Ruler of Dubai, Deputy Prime Minister and Minister of Finance, met with Banga and discussed recent socio-economic developments in the UAE and ways to strengthen ties between the UAE and the WBG.

Sheikh Maktoum highlighted the importance of enhancing collaboration to achieve the global agenda for overcoming challenges. He noted the WBG’s role in supporting the 2023 United Nations Climate Change Conference (COP28) in areas related to food, water and climate financing.

Sheikh Maktoum also highlighted the UAE’s commitment to creating a hub for excellence and innovation in sustainable technologies and the country’s efforts to make significant contributions to mitigating climate change at both global and regional levels.

He congratulated Banga on the successful Annual Meetings of the World Bank recently held in Marrakech, which saw the announcement of the new vision and mission of the organisation that underscore its commitment to finding innovative solutions for global challenges including the crises of climate change and food insecurity.

Sheikh Maktoum was briefed on the new WBG playbook, which emphasises the pivotal role of the knowledge bank and the imperative of capacity building across various sectors. These sectors include People, which touches on aspects like education, healthcare, and social benefits; Prosperity, focusing on areas such as jobs, financial inclusion, local currency markets, credit availability, and economic and trade policies; Planet, which centres on preserving drinking water and biodiversity; Infrastructure, a foundational element for progress; and Digital, which highlight the importance of governance, transparency, and digital access.

ALSO READ: UAE Sends 68 Tonnes of Food Aid to Gaza

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‘India Backs World Bank’s Vision to End Extreme Poverty’

India supports it’s new vision to create a world free of poverty on a liveable planet and to end extreme poverty, says Nirmala Sitharaman

Finance Minister Nirmala Sitharaman on Thursday participated in the 108th meeting of the development committee plenary of the World Bank in Marrakech, Morocco.

She said that India supports it’s new vision to create a world free of poverty on a liveable planet and to end extreme poverty.

During the meeting, Sitharaman encouraged World Bank to take lead in aligning processes and procedures with other multilateral development banks (MDBs) to benefit client countries that deal with multiple MDBs.

Further work is needed beyond Marrakech to increase World Bank’s capacity to realise our enhanced ambition, Sitharaman stated.

Also, while engaging in climate action in line with the principle of “common but differentiated responsibilities and respective capabilities,” we encourage the World Bank to be more ambitious in its commitment to adaptation finance, she added.

Sitharaman further said that enabling private capital mobilisation at scale will require an enhanced ‘One World Bank’ approach.

“At the same time, we must be realistic in our assessment of the potential of private capital mobilisation, given the global economic outlook,” she added.

Appetite for the proposed pilot Global Challenge Programmes (GCPs) will depend on strong country demand and ownership, access to new and additional finance, as well as provision of concessional finance, for both Low-Income Countries (LICs) and Middle-Income Countries (MICs), she said.

“We fully agree with the conclusion that significantly more could be done for clients by mobilising new, additional resources for the World Bank,” Sitharaman said.

Sitharaman on Wednesday met World Bank president Ajay Banga, on the sidelines of the annual meeting of IMF-WB in Marrakech, Morocco.

They discussed several issues related to India’s development priorities and global challenges – in the context of bigger, better and more effective World Bank. 

Highlighting the ‘One Sun, One World, One Grid’ initiative articulated by Prime Minister Narendra Modi, the Finance Minister encouraged the World Bank’s active involvement in taking it forward. 

She emphasised that India has delivered on its commitments towards Nationally Determined Contributions (NDCs) and this rich experience can be used by the World Bank in its engagement with other countries. 

Citing India’s rich and varied development experience, the finance minister said India can become a strong partner for ‘Sandboxing’ the eight global challenge programmes proposed to be taken up by the World Bank. 

Inflation levels may remain elevated

On the day when India’s September retail inflation fell to 5.02 per cent from 6.83 per cent in August, Finance Minister Nirmala Sitharaman on Thursday said that domestic disruptions along with global uncertainties may keep inflation at elevated levels in the coming months.

The ongoing Israel-Palestine conflict coupled with the Ukraine-Russia war are a double whammy for global economy. Domestic consumption and investment demand will continue to drive India’s growth, Sitharaman said while speaking at the 108th Meeting of the Development Committee Plenary in Marrakech, Morocco. 

The agenda for the meeting was “Ending Poverty on a Liveable Planet – Report to Governors on World Bank Evolution”.

She said that the Indian government has already taken pre-emptive measures to restrain food inflation, which is likely to subside price pressure in the market soon. 

India Ranks 111th on Hunger Index, Slams Report

India has ranked 111th out of the 125 countries on the 2023 Global Hunger Index (GHI), slipping four places since last year. However, the government has rejected the report calling it “flawed” and “erroneous”.

“With a score of 28.7 in the 2023 Global Hunger Index, India has a level of hunger that is serious,” said the global report released on Thursday by Concern Worldwide and Welt Hunger Hilfe, Non-Government Organisations from Ireland and Germany respectively.

In 2022, India ranked 107 out of the 125 countries.

The Union Ministry of Women and Child Development, in a statement, refuted the claims and said that the index “continues to be a flawed measure of ‘Hunger’ and does not reflect India’s true position”. 

The GHI report ranked Pakistan at 102, Bangladesh at 81, Nepal at 69 and Sri Lanka at 60. South Asia and Sub-Saharan Africa were the regions with the highest hunger levels.

“The index is an erroneous measure of hunger and suffers from serious methodological issues. Three out of the four indicators used for calculation of the index are related to the health of children and cannot be representative of the entire population,” the ministry said.

“The fourth and most important indicator ‘Proportion of Undernourished (PoU) population’ is based on an opinion poll conducted on a very small sample size of 3,000,” it added.

Meanwhile, the report also counted India with the world’s highest child wasting rate of 18.7 per cent, indicating acute undernutrition.

The rate of undernourishment in India stood at 16.6 per cent and under-five mortality at 3.1 per cent.

The report also said that the prevalence of anaemia in women aged between 15 and 24 years stood at 58.1 per cent

“Two other indicators, namely, Stunting and Wasting are outcomes of complex interactions of various other factors like sanitation, genetics, environment and utilisation of food intake apart from hunger which is taken as the causative/outcome factor for stunting and wasting in the GHI,” the ministry said.

It noted that there is hardly any evidence that the fourth indicator, namely, child mortality is an outcome of hunger.

The ministry said that since April 2023, the measurement data of children under five years uploaded on the Poshan Tracker has consistently increased – from 6.34 crore in April 2023 to 7.24 crore in September 2023.

“The percentage of child wasting, as seen on the Poshan Tracker, has been consistently below 7.2 per cent, month-on-month, as compared to the value of 18.7 per cent used for child wasting in the Global Hunger Index 2023,” the ministry said in the statement.

ALSO READ: Operation Ajay: First Flight Brings 212 Indian Citizens Home

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World Bank criticises UK for cutting aid to poorest

Absolute poverty, where people live on less than $2 (£1.6) a day, affects nearly 100 million more people now than before the pandemic. …reports Asian Lite News

The World Bank, the globe’s top anti-poverty institution, has told the BBC that recent cuts to the UK foreign aid budget “caused real pain”. The Bank added it wanted the UK “back at higher levels” of funding.

The UK government was until recently the biggest single donor to the Bank’s fund for the poorest countries in the world. Since 2020 ministers have cut back on aid, temporarily, until Britain’s public finances are back in shape.

The UK has halved its funding to the World Bank’s International Development Association fund to £500m a year. The World Bank faces further challenges as it struggles to raise finances for a new crisis response fund aimed at helping countries respond to higher poverty levels.

“Every dollar counts, every dollar that we get saved lives. The way I look at this fund is how you actually save lives… so this caused real pain,” said Axel van Trotsenberg, senior managing director at the World Bank. Trotsenberg, the second-in-command at the Bank, said that donor contributions had been largely “flat”.

He added: “We want to build on it. And we want the UK back at higher levels.” Three years of crisis have abruptly ended decades of progress in reducing global poverty.

Absolute poverty, where people live on less than $2 (£1.6) a day, affects nearly 100 million more people now than before the pandemic. Against this backdrop the World Bank says it needs more funds to deal with crisis-afflicted poorer nations as soon as this December.

But as more funds get diverted into refugee spending other aid flows are impacted. Money going to sub-Saharan Africa, for example, are down more than 7% in real terms. In response to Trotsenberg’s comments, a government spokesperson said: “The UK is one of the largest aid donors in the world – we have spent nearly £12.8 billion on aid in 2022 – which is more than many other G7 countries and is helping to reduce poverty, alleviate the devastating impacts of climate change and protect the world’s most vulnerable people.

“Our Overseas Development Assistance is supporting people across the world, and last year responded to drought in East Africa, food shortages in Afghanistan and flooding in Pakistan. “Last year, a report by the Independent Commission for Aid Impact found that – despite us contributing £10 billion to the International Development Association in the past decade – our influence goes far beyond funding.” Chancellor Jeremy Hunt arrives at the summit on Thursday to “showcase the UK’s leadership on international development” and meet with world finance ministers.

ALSO READ-Sitharaman: India a Strong Partner for World Bank Initiatives

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World Bank Stays At 6.3% for India’s 2023-24 GDP

India economy.(photo:Pixabay.com)

The World Bank in its April report had cut India’s growth forecast for 2023-24 to 6.3 per cent from the earlier 6.6 per cent….reports Asian Lite News

The World Bank has retained India’s GDP growth forecast for the financial year 2023-24 at 6.3 per cent and noted that the country continued to show resilience against the backdrop of a challenging global environment.

The World Bank in its April report had cut India’s growth forecast for 2023-24 to 6.3 per cent from the earlier 6.6 per cent.

According to the World Bank’s latest India Development Update (IDU) released Tuesday, the international financial institution’s flagship half-yearly report on the Indian economy, observed that despite significant global challenges, India was one of the fastest-growing major economies in 2022-23 at 7.2 per cent.

“India’s growth rate was the second highest among G20 countries and almost twice the average for emerging market economies. This resilience was underpinned by robust domestic demand, strong public infrastructure investment and a strengthening financial sector,” World Bank said.

This fiscal, bank credit in India grew 15.8 per cent in the first quarter compared with 13.3 per cent in the first quarter of previous fiscal.

India’s service sector activity is expected to remain strong with growth of 7.4 per cent and investment growth is also projected to remain robust at 8.9 per cent.

“An adverse global environment will continue to pose challenges in the short-term, ” said Auguste Tano Kouame, World Bank’s Country Director in India.

“Tapping public spending that crowds in more private investments will create more favourable conditions for India to seize global opportunities in the future and thus achieve higher growth.”

The World Bank expects that global headwinds will continue to persist and intensify due to high global interest rates, geopolitical tensions, and sluggish global demand and as a result, global economic growth is also set to slow down over the medium term.

About adverse weather conditions in India that contributed to a spike in inflation in recent months, World Bank in the report said the price rise is expected to decrease gradually as food prices normalize and government measures increase the supply of key commodities.

“While the spike in headline inflation may temporarily constrain consumption, we project a moderation. Overall conditions will remain conducive for private investment,” said Dhruv Sharma, Senior Economist, at the World Bank, and lead author of the report.

“The volume of foreign direct investment is also likely to grow in India as rebalancing of the global value chain continues.”

Headline inflation in India rose to 7.8 per cent in July due to a surge in prices of food items like wheat and rice, to later fall to 6.8 per cent in August.

Further, the World Bank expects fiscal consolidation to continue in 2023-24 with the central government fiscal deficit projected to continue to decline from 6.4 per cent to 5.9 per cent of GDP.

Public debt is expected to stabilize at 83 per cent of GDP. On the external front, the current account deficit is expected to narrow to 1.4 per cent of GDP, and it will be adequately financed by foreign investment flows and supported by large foreign reserves. (ANI)

ALSO READ: World Bank approves $365 mn for Western, Central Africa

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Ajay Banga: From India to World Bank’s Helm

Gandhinagar, July 16 (ANI): World Bank President Ajay Banga interacts with students, parents and teachers at Vidya Samiksha Kendra, in Gandhinagar on Sunday. (ANI Photo)

While acknowledging the significance of luck in one’s journey, he emphasized that the majority of success is built on relentless effort and the ability to seize opportunities as they present themselves…writes Dr. Jasneet Bedi/ Khalsa Vox

“I embody the essence of ‘Make in India’,” proclaimed Ajay Banga, the current Chief of the World Bank, during a recent interview. His statement not only encapsulates his remarkable personal journey but also serves as an inspiring tale of a young Indian educated entirely within the country’s borders who has risen to one of the most influential positions in the global financial arena. Banga’s roots run deep in India, where he spent his formative years and received his education exclusively from Indian institutions. Astonishingly, he proudly declared that he had not pursued a single course abroad. This declaration underscores the quality and competence of education available within India, proving that with dedication and hard work, one can scale great heights, regardless of their starting point.

In the interview, Banga underscored the role of luck, diligent effort, and the ability to seize opportunities in achieving success. While acknowledging the significance of luck in one’s journey, he emphasized that the majority of success is built on relentless effort and the ability to seize opportunities as they present themselves, reports Khalsa Vox

Banga’s appointment as the head of the World Bank arrived at a crucial juncture in global finance. During India’s G-20 Presidency, the focus was on reforming multilateral development banks. President Biden entrusted Banga with the task of adapting the World Bank to address China’s growing influence in the traditional Washington-led global financial order. Banga’s unique perspective as an Indian-educated professional adds a fresh dimension to this challenge, highlighting the global significance of Indian talent and expertise.

Furthermore, the World Bank Chief challenged the idea of a ‘Washington-dominated world.’ He pointed out that more than half of the World Bank’s workforce is located outside the United States, emphasizing the institution’s global nature and the importance of diverse voices in shaping its future.

Banga’s vision for the World Bank is crystal clear: he aims to redefine its mission and make it more inclusive. His recent interactions with world leaders and finance ministers from numerous countries have provided valuable insights into this transformation. Key elements of his strategy include establishing a clear vision, effective communication, efficient management, and setting measurable goals with transparent scorecards.

Regarding geopolitics and China, Banga exhibited a pragmatic approach. He acknowledged the challenges faced by the world but stressed that addressing these challenges should not rely on a single institution. Despite geopolitical complexities, he noted that China is a shareholder in the World Bank, and their financial contributions have evolved over time.

Additionally, Banga emphasized the pressing global issues of climate change and healthcare as pivotal areas for the World Bank’s focus in the coming years. These are domains where international collaboration and financial support are paramount, and under his leadership, the World Bank aims to play a significant role.

Lastly, Banga’s discussions with US President Joe Biden underscored the importance of American contributions to the World Bank, enhancing the institution’s capacity to make a global impact. This partnership reaffirms the World Bank’s relevance in addressing global challenges.

Ajay Banga’s journey from an Indian youth to the helm of the World Bank stands as a testament to the potential that Indian education and talent hold on the global stage. His vision for the institution, combined with his pragmatic approach to geopolitics, promises to bring a fresh perspective to the world of global finance and development. As an inspirational figure, he exemplifies how dedication, hard work, and seizing opportunities can lead to extraordinary achievements.

ALSO READ-Ajay Banga named in 2023 list of ‘Great Immigrants’

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World Bank Hails India’s Digital Leap in Financial Inclusion

The document further highlighted the groundbreaking measures undertaken by the NDA government and the crucial role of government policy and regulation in shaping the DPI landscape…reports Asian Lite News

Indian Prime Minister Shri Narendra Modi took to social media platform X to share a remarkable achievement on the global stage. The World Bank’s recent G20 document has recognized India’s astounding progress in the field of financial inclusion, revealing that the nation accomplished its financial inclusion targets in just six years, a feat that would have otherwise taken a staggering 47 years to achieve.

The Prime Minister expressed his elation, emphasizing how India’s leap in financial inclusion has been powered by its robust Digital Public Infrastructure (DPI). He commended the country’s digital payment infrastructure and the determination of its people for this momentous achievement. Moreover, he hailed it as a testament to India’s rapid progress and innovation.

The World Bank’s document shed light on the pivotal role of India’s Jan Dhan-Aadhaar-Mobile (JAM) trinity in propelling the financial inclusion rate from a mere 25 percent in 2008 to over 80 percent of adults in just the past six years. This journey was effectively shortened by up to 47 years, thanks to the digital public infrastructure.

The document further highlighted the groundbreaking measures undertaken by the NDA government and the crucial role of government policy and regulation in shaping the DPI landscape.

The document emphasized, “While DPIs’ role in this leapfrogging is undoubtable, other ecosystem variables and policies that build on the availability of DPIs were critical. These included interventions to create a more enabling legal and regulatory framework, national policies to expand account ownership, and leveraging Aadhaar for identity verification.”

Notably, since its inception, the number of PM Jan Dhan Yojana (PMJDY) accounts opened has tripled, reaching a staggering 462 million by June 2022. Women hold the majority share of these accounts, accounting for 56 percent, which is more than 260 million accounts.

The Jan Dhan Plus program, aimed at encouraging low-income women to save, has resulted in over 12 million women customers as of April 2023 and a 50 percent increase in average balances in just five months.

Furthermore, the document estimates that by engaging 100 million low-income women in savings activities, public sector banks in India can attract approximately Rs 25,000 crore ($3.1 billion) in deposits.

The document also highlighted the monumental success of Government-to-Person (G2P) payments in India, leveraging DPI. Over the last decade, India has built one of the world’s largest digital G2P architectures, supporting transfers amounting to about $361 billion directly to beneficiaries through 312 key schemes.

As of March 2022, these efforts resulted in total savings of $33 billion, equivalent to nearly 1.14 percent of GDP.

The United Payments Interface (UPI) system has also seen phenomenal success, with more than 9.41 billion transactions valued at about Rs 14.89 trillion in May 2023 alone. In the fiscal year 2022–23, the total value of UPI transactions accounted for nearly 50 percent of India’s nominal GDP.

The DPI in India has not only fueled government initiatives but also enhanced efficiency for private organizations. Reductions in complexity, cost, and time for business operations have been observed across the board. For instance, some non-banking financial companies (NBFCs) have reported an 8 percent higher conversion rate in SME lending, a 65 percent savings in depreciation costs, and a 66 percent reduction in costs related to fraud detection.

Industry estimates show that banks’ costs for onboarding customers in India have plummeted from $23 to just $0.1 with the utilization of DPI.

UPI.

The World Bank also noted that India Stack has streamlined and digitized Know Your Customer (KYC) procedures, leading to lower costs. Banks employing e-KYC have reduced their compliance costs from $0.12 to $0.06. These cost reductions have made lower-income clients more attractive to service and generated profits for developing new products.

Furthermore, the UPI-PayNow interlinking between India and Singapore, operationalized in February 2023, aligns with the G20’s financial inclusion priorities, facilitating faster, cheaper, and more transparent cross-border payments.

India’s Account Aggregator (AA) Framework, regulated by the RBI, aims to strengthen India’s data infrastructure. It enables consumers and enterprises to share their data only with their consent through an electronic consent framework. As of June 2023, a total of 1.13 billion cumulative accounts have been enabled for data sharing, with 13.46 million cumulative consents raised.

India’s rapid advancements in financial inclusion and digital infrastructure have undoubtedly set a global benchmark, earning praise and admiration from international organizations like the World Bank. This achievement not only signifies economic progress but also demonstrates the power of digital innovation in transforming lives and enabling financial access for all.

ALSO READ-India lists key financial inclusion measures  

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Biden to Bat For ‘Reshaping’ World Bank, IMF At G20

Biden will leave for New Delhi on Thursday, National Security Adviser Jake Sullivan said on Tuesday at a news briefing to preview the visit. …reports Yaswant Raj

US President Joe Biden will focus on “fundamentally reshaping and scaling up the multilateral development banks” during his upcoming visit this week to New Delhi for the G20 leaders’ meeting, the White House said.

Biden’s other priorities for the summit will include debt relief for countries, climate, health, digital technology, including commitments with respect to a more inclusive digital transformation and a responsible path and approach to Artificial intelligence development.

The US President’s plans have not changed because of wife, First Lady Jill Biden, testing positive for Covid-19. He has tested negative but due to possible exposure to the virus he will be undertaking the usual precautions mandated by the Centers for Disease Control and Prevention (CDC), such as wearing masks in public places and around people.

Biden will leave for New Delhi on Thursday, National Security Adviser Jake Sullivan said on Tuesday at a news briefing to preview the visit. 

Biden and Prime Minister Narendra Modi will hold a bilateral meeting on Friday and then the US President will attend  G20 meetings on Saturday and Sunday.

This will be Biden’s first visit to India as President. He went there last in 2013 as Vice-President.

“Delivering on an agenda fundamentally reshaping and scaling up the multilateral development bank’s, especially the World Bank and the IMF (the International Monetary Fund)” will be one of the main focuses of the US President, Sullivan said.

He added: “We know that these institutions are some of the most effective tools that we have for mobilising transparent, high quality investment into developing countries. And that’s why the US is championing the major effort that is currently underway to evolve these institutions so that they are up to the challenges of today and tomorrow.” 

Nominating Indian-American Ajay Banga to head the World Bank was a part of these efforts, the Biden administration has said before.

Pointing to expanded US funding of the World Bank by $25 billion, per a request to US Congress from the Biden administration, the US National Security Adviser said the US expects other partner countries to follow its lead. 

“We’ve been leading this effort that we hope will see the G20 endorsed this level of ambition and deliver a broader vision of multilateral development banks that are better, bigger and more effective.”

Russia’s invasion of Ukraine will also be on the table. 

“We know that there’ll be continued focus on how the G20 deals with Russia’s illegal and ongoing war in Ukraine. The reality is that Russia’s illegal war has had devastating social and economic consequences. And the poorest countries on the planet are bearing the brunt of that. As he has done before, President Biden will call for a just and durable peace, one founded in respect for international law, principles of the UN Charter, the precepts of territorial integrity and sovereignty, and he will continue to emphasise that the US will support Ukraine for as long as it takes to redeem these principles.”

ALSO READ: Biden’s India visit to cement ties