With the newly established Asian Infrastructure Investment Bank (AIIB) planning to unlock South Asia’s economic potential, the International Monetary Fund (IMF), too, has started concentrating on the region.
The IMF recently signed a Memorandum of Understanding (MoU) with India for building a South Asia Regional Training and Technical Assistance Centre (SARTTAC) in the country. Earlier, Indian Prime Minister Narendra Modi had approved the IMF project and authorised his Finance Minister Arun Jaitley to make a final decision on India’s contribution for the project.
According to sources close to the Prime Minister’s Office (PMO), the proposed SARTTAC will be a collaborative venture between the global lender and its member countries in the region (India, Bangladesh, Bhutan, Maldives, Nepal and Sri Lanka). Meanwhile, India agreed to allow other member countries to join SARTTAC at a later stage. SARTTAC will meet the South Asian countries’ capacity building needs at the state level with a special focus on India.
The IMF is also organising (jointly with the Indian government) a three-day Regional Conference on ‘Advancing Asia: Investing for the Future’ in the Indian capital (from March 12 to 14). Participants in the conference explain how the MoU could help in capacity building of government officials and also the macro, fiscal, monetary policies adopted by the IMF.
A senior Indian official said that the Modi administration wants a greater co-ordination between the six IMF member countries in South Asia. According to the official, capacity development at government level especially in fiscal and financial policies will certainly boost revenue mobilisation. It will also help the South Asian countries formulate more effective public and financial management policies, thus, ensuring a rapid economic growth.
The setting up of SARTTAC will further allow the IMF to bring in the best practices from different parts of the globe and to help countries in the region by providing innovative solutions to fiscal, monetary and financial issues. India and its neighbours can get effective response through use of IT and innovative techniques in the future.