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G20: Pursue reforms for better, bigger, more effective MDBs

G20: Pursue reforms for better, bigger, more effective MDBs

The G20 Leaders convened in New Delhi from September 9 to 10, 2023, under the theme of ‘Vasudhaiva Kutumbakam.’ In a historic meeting, they acknowledged the pivotal role their decisions would play in shaping the destiny of both humanity and the planet. Rooted in the philosophy of harmonious coexistence with the natural world, they committed to taking tangible steps to confront global challenges. The G20 New Delhi Leaders’ Declaration, adopted unanimously, outlined their focus on ‘Enhancing Economic and Social Empowerment,’ ‘Bridging the Gender Digital Divide,’ ‘Driving Gender Inclusive Climate Action,’ and ‘Securing Women’s Food Security, Nutrition and Well-Being.’

As the leaders of the G20, the world’s premier platform for international economic collaboration, they pledged to take decisive actions through partnerships, which included:

a. Accelerating robust, sustainable, equitable, and inclusive growth.

b. Urgently and effectively addressing debt vulnerabilities in developing countries to promote resilience in their growth.

c. Mobilizing increased funding from all sources to expedite progress on Sustainable Development Goals (SDGs).

d. Advocating reforms for more robust and impactful Multilateral Development Banks (MDBs) to address global challenges.

e. Enhancing access to digital services and public digital infrastructure while harnessing digital transformation opportunities to foster sustainable and inclusive growth.

Prime Minister Narendra Modi emphasized a human-centric vision over a GDP-centric approach during the G20 Summit Session. He underscored India’s commitment to international cooperation and shared initiatives like the Green Development Pact, Action Plan on SDGs, High-level Principles on Anti-corruption, Digital Public Infrastructure, and MDB Reforms.

The signing of an MoU on India-Middle East-Europe Economic Corridor (IMEC), by India, USA, Saudi Arabia, UAE, European Union, Italy, France and Germany, was announced by Modi after co-chairing a special event with the US President Joe Biden on Partnership for Global Infrastructure and Investment (PGII) and IMEC. The IMEC comprises an Eastern Corridor connecting India to the Gulf region and a Northern Corridor connecting the Gulf region to Europe. It will include a railway and ship-rail transit network and road transport routes. Modi highlighted the importance of physical, digital and financial connectivity. He said that IMEC would help promote economic integration between India and Europe.

 Global Biofuels Alliance (GBA) led by India, Brazil and the United States, as leading biofuel producers and consumers, will greatly help achieve the Millennium Development Goals (MDGs) of India turning Net Zero by 2070. Modi along with the leaders of Singapore, Bangladesh, Italy, USA, Brazil, Argentina, Mauritius and UAE, launched the GBA.

Reforming International Financial Institutions

The G20 New Delhi Leaders’ Declaration underscores the commitment to reform international financial institutions, emphasizing the need for better, more substantial, and more effective Multilateral Development Banks (MDBs). The leaders aim to enhance their operating models, accessibility, and financing capacity to maximize their impact on global development challenges, with a focus on low- and middle-income countries. They support the G20 Roadmap for Implementing the Recommendations of the G20 Independent Review of MDBs Capital Adequacy Frameworks (CAFs) and look forward to further steps at the IMF/WBG Annual Meetings in Marrakesh. The leaders called on the MDBs to undertake comprehensive efforts to evolve their vision, incentive structures, operational approaches and financial capacities so that they are better equipped to maximize their impact in addressing a wide range of global challenges while being consistent with their mandate and commitment to accelerate progress towards Sustainable Development Goals (SDGs).

Efforts are also underway to bolster the International Bank for Reconstruction and Development (IBRD), reduce the cost of investments targeting global challenges, and enhance the capacity of the International Development Association (IDA) crisis response window.

Managing Global Debt Vulnerabilities

Recognizing the significance of addressing debt vulnerabilities, particularly in low and middle-income countries, the G20 reiterates their commitment to effective, comprehensive, and systematic debt resolution. They commend recent agreements and urge swift resolutions for countries like Zambia, Ghana, Ethiopia, and Sri Lanka facing debt challenges.

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