Russia has refused to participate in the recapitalization of the World Bank (WB) due to disagreement over the new principles of its credit policy, TASS reports.
The United States has also decided to abandon its participation in the recapitalization; however, the US will retain a blocking minority stake, which will drop from 20% to 15%.
"We [Russia] proceed from the fact that we will not participate. Firstly, we are not happy with the fact that the IDA [part of the World Bank] is maintained from the profit the bank receives; and the Bank's profit is obtained at the expense of the most needy shareholders-borrowers," said Russian Deputy Finance Minister Sergei Storchak.
Shareholders of the World Bank Group made a decision to increase the group’s capital by $13 billion. A large portion of the amount. $7.5 billion, will be allocated to the International Bank for Reconstruction and Development (IBRD), while the remaining $5.5 billion will be designated for the International Finance Corporation (IFC). The WB believes that, with this change, it will be able to "strengthen the capacities of institutions fighting poverty in the world".
Storchak noted that "we all know the story of prohibition of the World Bank activities in Russia.”
"In this situation, how can ask the country's leadership, go to parliament with a budget or with ratification, that to increase the capital?" he added.
He also said that the United States will not also recapitalize the World Bank but have achieved a package decision that will allow them to retain a blocking minority stake.
"In order to preserve their blocking stake, it is planned to amend the articles of the agreement, so the blocking stake will be reduced from 20% to 15%, which will allow the Americans to continue to gain the upper hand," Storchak said.
The World Bank Group includes two organizations: the International Bank for Reconstruction and Development (IBRD), and its subsidiary, the International Development Association (IDA). Associate members in the World Bank include the International Finance Corporation (IFC), the Multilateral Investment Guarantee Agency (MIGA) and the International Center for Settlement of Investment Disputes (ICSID). Among the declared tasks of the World Bank is to promote the reconstruction and development of the national economy of participating countries, encourage private and foreign investment, stimulate a balanced growth in international trade and maintain a balanced balance of payments of member countries.