Tharman Shanmugaratnam, Economy

Singapore's World Bank subscription to rise from US$39 million to US$672 million

Singapore's subscription to the International Bank for Reconstruction and Development will be raised from US$38.6 million to about US$672 million. Of this new fee, US$38 million, or about 6 per cent, will be paid out from the Government Budget set la
Singapore's subscription to the International Bank for Reconstruction and Development will be raised from US$38.6 million to about US$672 million. Of this new fee, US$38 million, or about 6 per cent, will be paid out from the Government Budget set last year, said Deputy Prime Minister Tharman Shanmugaratnam (pictured) on Tuesday, Jan 21, 2014, as he sought Parliament's approval for the increase. -- ST FILE PHOTO: DESMOND WEE

The amount that Singapore could potentially contribute to help promote growth in developing countries has increased substantially.

Singapore's subscription to the International Bank for Reconstruction and Development (IBRD) - the main arm of the World Bank that supports middle-income and poorer countries - will be raised from US$38.6 million to about US$672 million, as part of a move by the IBRD to increase its overall capital by US$86.2 billion.

Of this new fee for Singapore, US$38 million, or about 6 per cent, will be paid out from the Government Budget set last year, said Deputy Prime Minister Tharman Shanmugaratnam on Tuesday, as he sought Parliament's approval for the increase.

The remainder, known as callable capital, will not be drawn by the IBRD except in extreme circumstances, when it cannot meet its obligations on borrowings or guarantees.

This is the first time Singapore's capital subscription to the IBRD has increased since 1966. The increase also will mean a rise in the Republic's voting power in the IBRD, from 0.05 per cent to 0.25 per cent.

Singapore has to play a part in the global effort to supplement the World Bank's resources, as the Republic has a vested interest in the healthy functioning of major international institutions, said Mr Tharman.

"Given our role as a major financial centre and the importance of a healthy global economy to our economic prospects, we should participate in this global effort," he added.