The G20 specialist group on transforming multilateral development banks (MDB), collaboratively steered by Harvard University president emeritus Lawrence Summers and Fifteenth Finance Commission Chairperson N.K. Singh is slated to conduct its first in-person meeting in Washington.
The group’s mandate includes an evaluation of the scale of funding ramp-up needed for institutions like the World Bank (WB) and the International Monetary Fund (IMF) to be able to finance member countries’ needs, with possible mechanisms to raise more funds from the private sector and co-ordinate more effectively among the different institutions. With the IMF and World Bank’s Board of Governors’ spring meeting scheduled in Washington this week, the G20 expert group is also likely to interact with their leadership along with that of other multilateral development institutions in the coming week.
“We will interact with the heads of all MDBs to understand prospects for a coordinated approach to harmonize practices and strengthen balance sheets,” Mr. Singh said, adding there was also a plan to interact with global rating agencies and synchronize MDBs’ capital adequacy frameworks in tune with Basel norms. Incidentally, the World Bank’s development committee has proposed an evolution plan to “dramatically scale up” its financing and impact at a time when the world is facing “an unprecedented confluence of crises”. The World Bank’s Board of Governors will consider the plan that stresses the need for urgent action by all stakeholders on April 12.
“Poverty eradication is off track to reach 2030 targets, progress on shared prosperity remains slow, and human development outcomes have reversed since the COVID-19 pandemic began,” the report noted. It has mooted measures to step up financing capacity by $50 billion over 10 years, along with a shift in the Bank’s mission statement to include “sustainable, resilient and inclusive development” to its current focus on poverty eradication and shared prosperity.
Mr. Singh, co-convenor of the G20 expert panel, whose report is due by June this year, said the challenge of raising financing is not unique to WB but to all multilateral banks as member countries are reluctant to step up capital. “Each bank has its own structure and there are some focused on regional development so any convergence in the norms must recognise their different priorities,” he told The Hindu. Constituted in March under the aegis of India’s G20 Presidency, the expert group’s mandate is to suggest a roadmap for rebooting the ecosystem of multilateral development banks so that they are better equipped to finance sustainable development goals and emerging global challenges like climate change and health.