Multilateral Development Banks (MDBs)

 

Latest Context

On 12-13 October, 2023 the report was presented at the fourth G20 finance ministers and central bank governors meeting in Marrakech, Morocco.

Key Points

1. The independent expert group submitted volume two of a series of reports.
2. This report focuses on reforms of MDBs on the theme of Bigger, Bolder, Better MDBs.
3. Earlier submitted volume one, focused on tripling the annual lending levels of MDBs to $390 billion by 2030.
4. MDBs are a financial institution established by multiple member countries and governed by international law. e.g., Bretton Wood institutions, Asian Development Bank, etc.

Recommendations

1. Better MDBs:

1.  Address the largest external financing gaps in low- and middle-income countries

2. Focus on non-concessional lending in climate action.

3. Scaling up national transformations by integrating with regional programs.

2. Bigger MDBs:

1. Catalyze private finance by shifting culture from risk avoidance to informed risk-taking.

2. More donor pledges for the International Development Association.

3. Established a Global Challenges Funding Mechanism (GCFM) for investors seeking financial return while also supporting SDGs.

3. Bolder MDBs:

1. Adopt cascade principle: refers to public sector banks refraining from financing what can be done by the private sector.

2. Empowering the Multilateral Investment Guarantee Agency (MIGA).

 

 

 

Must Check: Best IAS Coaching In Delhi