G20 Expert Group On Strengthening Multilateral Development Banks (MDBs) [UPSC Notes]

Under the auspices of India’s G20 Presidency, an expert group has been formed to investigate ways of enhancing multilateral development banks (MDBs). Developing countries need a massive $2.4 trillion per annum to address various challenges faced by them. The G20 Expert Group on strengthening multilateral development banks (MDBs) is exploring ways to enhance the lending capacity of MDBs. Read more on this topic for the IAS exam economy segment.

G20 Expert Group on strengthening multilateral development banks (MDBs):

• An 11-member expert group has been established to investigate ways of enhancing multilateral development banks (MDBs) under the auspices of India’s G20 Presidency.
• N K Singh, the chairman of the 15th Finance Commission, and Lawrence Summers, the former US Treasury secretary, will jointly convene the expert group.

Objectives of the Expert Group:-

• Creating a plan for a modernized ecosystem of MDBs, with timelines and key milestones, which encompasses the overarching vision, incentive framework, operational methodologies, and financial capabilities.
• The group will also evaluate estimates of the finance scale needed to and from the MDBs, including from capital adequacy reforms, as well as from public and private sector sources.
  • This will provide funding for various sustainable development goals (SDGs) and cross-border issues, including climate change and public health.
• The group will also propose mechanisms for coordination among MDBs.
• The MDBs need private capital to meet financing targets set by various committees and the expert group formed will evaluate how this will affect MDBs’ operating models.
• The panel also intends to suggest ways to optimize the balance sheet strength of the World Bank.
  • The World Bank has $20B in capital and has lent over $800B. To lend more, it needs recapitalization. The fact that the IBRD has no replenishment cycle is concerning and needs attention.

The Group of 20 (G20):

• • It is an international forum made up of 19 countries and the European Union.
  • Around 80% of the world’s economic output and two-thirds of its population are represented by its members.
  • The G20 meets annually to discuss issues related to global economic growth, international trade, and financial regulation, among other topics.
  • India is presiding over the latest edition of G20 summits (in 2023), which is to commence in September 2023.

G20 Expert Group On Strengthening Multilateral Development Banks (MDBs):- Download PDF Here