International Institutions: WTO, IMF and World Bank

Three pairs are correct. The World Bank's brief 'Celebrating 75 Years of World Bank-India Partnership' traces support decade by decade. In the 1950s, Bank loans supplied foreign exchange for power and steel plants, such as Durgapur and TISCO, and for the ports of Calcutta and Madras, as well as Air India (pair 1). In the 1970s, the Bank backed Operation Flood, the dairy cooperative programme, and storage for the Food Corporation of India (pair 2). In the 1980s, it financed oil and gas exploration in Bombay High, the Cambay Basin and the Krishna-Godavari basin, and the Nhava Sheva port (pair 3). Pair 4 is wrong: the brief places the groundwork for the Green Revolution in the 1960s; the 2000s instead saw support for Education for All, rural roads and self-help groups under the National Rural Livelihoods Mission. The sequence shows the Bank's shift from infrastructure and food security to human development.

The World Bank's document announcing the loan on 18 August 1949 records a loan of USD 34 million to India for Indian Railways, then the backbone of the country's freight and passenger transport. The Bank's India brief, 'Celebrating 75 Years of World Bank-India Partnership', adds that this was the Bank's first loan to an Asian country and the first World Bank loan agreement signed by a woman, Vijaya Lakshmi Pandit, then India's Ambassador to the United States. India was a founding member of the Bank from 1945. Later decades brought support for power and steel plants and ports in the 1950s, groundwork for the Green Revolution in the 1960s, Operation Flood in the 1970s, oil and gas exploration, including Bombay High, in the 1980s, and PowerGrid and the National Highways Authority of India in the 1990s. So Bombay High and NHAI came much later, and Bhakra Nangal was not the first loan.

Statements 1 and 2 are correct. The World Bank Group Timeline records that the Independent Review of the Sardar Sarovar Project, known as the Morse Review after its chairman Bradford Morse, with Thomas Berger as deputy chairman, was appointed by President Lewis Preston in September 1991 and published on 18 June 1992. It found that both the Indian authorities and the Bank were responsible for serious failures on resettlement and rehabilitation of displaced people and on environmental assessment. In March 1993, at the request of the Government of India, the Bank cancelled the remaining undisbursed part of its loan; the Bank's 30 March 1993 note is titled 'Indian Government Cancels World Bank Loan for Sardar Sarovar'. Statement 3 is wrong: the Inspection Panel was created later in 1993, so it could not have conducted the 1991-92 review. The case is a landmark in debates on the social and environmental accountability of MDBs.

Statements 1 and 3 are correct. The World Bank Group Archives exhibit on the India Consortium explains that India's 1958 balance-of-payments crisis, midway through the Second Five-Year Plan, led the Bank to convene creditor countries. The first meeting, held in Washington on 25-27 August 1958 and chaired by President Eugene R. Black, brought together the United States, the United Kingdom, Canada, West Germany and Japan, with the IMF attending as an observer, so statement 2 is wrong. Later members included France, Austria, Italy, the Netherlands and Belgium, as well as IDA, and the model was copied for Pakistan in 1960. The last Consortium meeting took place in Paris in July 1993; it was replaced by the India Development Forum, which first met on 30 June-1 July 1994, included private investors, and held its last meeting in April 2000. The Consortium made the World Bank the coordinator of India's external aid for decades.

Article 28 of the AIIB Articles of Agreement, done at Beijing on 29 June 2015, defines a Super Majority as an affirmative vote of two-thirds of the total number of Governors, representing not less than three-fourths of the total voting power of the members. Super Majority decisions include electing the President, increasing capital, changing the size of the Board and lowering the 75 per cent minimum share of capital reserved for regional members. Because the threshold is three-fourths of the votes, any member holding more than 25 per cent of the voting power can block such decisions. According to the AIIB's information statement filed in 2024, China held 26.57 per cent of total voting power and India 7.59 per cent as of 29 February 2024, so China alone can veto Super Majority decisions, while India, the second-largest shareholder, cannot. The design mirrors the US position in the IBRD, where 85 per cent majorities give the largest shareholder a veto over amendments.

Statements 1 and 2 are correct. According to Italy's Ministry of Economy and Finance, the CAF review was launched at the G20 Finance Ministers and Central Bank Governors meeting in Venice on 9-10 July 2021 under the Italian presidency, to examine how MDBs could lend more from their existing capital without endangering their ratings. Its report, 'Boosting MDBs' investing capacity', was welcomed at the third FMCBG meeting in Bali on 15- 16 July 2022 during Indonesia's presidency. The panel was chaired by Frannie Léautier, so statement 3 is wrong; Lawrence Summers and N. K. Singh later co-convened the separate G20 Independent Expert Group on MDBs under India's 2023 presidency. The CAF report made recommendations in five areas: defining risk tolerance, giving more credit to callable capital, expanding financial innovation, improving dialogue with credit rating agencies and increasing transparency. The World Bank's later E/L cuts and new instruments are built on these ideas.

Statements 1 and 3 are correct. Article 27 of the AIIB Articles provides that the Board of Directors shall function on a non-resident basis unless the Governors decide otherwise by a Super Majority; this differs from the resident Boards of the IBRD and IMF in Washington. Article 28 divides each member's votes into basic votes, which together equal 12 per cent of all votes and are shared equally among members, share votes proportional to shares held, and 600 Founding Member votes for each Founding Member. Statement 2 is wrong: under Article 29 the President must be a national of a regional member, is elected by a Super Majority for a five-year term and may be re-elected only once. The Bank's principal office is in Beijing (Article 32), and regional members must hold at least 75 per cent of capital. These rules let Asia, and China as the largest shareholder, keep control while admitting non- regional members.

Only the political-activity prohibition is common to both. Article IV, Section 10 of the IBRD Articles bars the Bank and its officers from interfering in the political affairs of any member and makes only economic considerations relevant to decisions. Article 31(2) of the AIIB Articles, done at Beijing in 2015, reproduces this idea almost word for word, saying the Bank, its President, officers and staff shall not interfere in members' political affairs or be influenced by their political character. The other options are features of only one bank. The five appointed Executive Directors are an IBRD rule (Article V, Section 4); the AIIB has 12 elected Directors, nine chosen by regional and three by non-regional Governors. A non-resident Board is an AIIB feature (Article 27), while the IBRD Board is resident in Washington. The requirement that the President be a national of a regional member is AIIB-only (Article 29); the IBRD Articles contain no nationality rule.