G20 panel on MDBs suggests shift from project-based approach to country platforms
In the second volume of its report, the panel with N K Singh and Lawrence Summers as co-conveners recommended that MDBs should focus on helping countries build and operationalise “country platforms”, or voluntary country-level mechanisms set out by respective governments to foster collaboration among development partners on the basis of a shared strategic vision and priorities.
New Delhi | October 13, 2023 06:30 IST
The G20 expert panel on strengthening multilateral development banks (MDBs) wants these institutions to shift from an approach of individual projects and prioritise programmes identified by national governments with sectoral focus and long-term transformation plans.
In the second volume of its report, the panel with N K Singh and Lawrence Summers as co-conveners recommended that MDBs should focus on helping countries build and operationalise “country platforms”, or voluntary country-level mechanisms set out by respective governments to foster collaboration among development partners on the basis of a shared strategic vision and priorities.
The second volume of the Independent Expert Group on Strengthening Multilateral Development Banks is being taken up at the ongoing meeting of the finance ministers and central bank governors of the G20 countries in Marrakech. Apart from recommending that the MDBs operate more in sync with developmental priorities of individual nations and co-create multi-year programmes, the expert group also called for bringing private sector engagement to the centre of MDB operations, and significantly raising MDB financing. It also listed out suggestions on how these goals may be achieved.
In the first volume of the report submitted at the July meeting of the G20 finance ministers and central bank governors, the expert group had listed a triple agenda for MDB reforms, calling for tripling of annual sustainable lending levels to $390 billion by 2030, adopting a triple mandate of eliminating extreme poverty, boosting shared prosperity, and contributing to global public goods, and expanding and modernising funding models to broaden the investor base in flexible and innovative ways.
“In the Delhi Declaration, the G20 Leaders recognized a need for a “big push on investments” to deliver on national development priorities, to respond to global challenges and to meet agreed international objectives, including the Paris COP21 agreement and the SDGs. They therefore called for strengthened MDBs to support this,” the panel said in the second volume of the report, adding that this volume focuses on the changes that will be required to implement the “G20 leaders’ vision of a strengthened MDB system”. The latest volume also attempts to provide a roadmap for rapid implementation of MDB reforms.
Additionally, the panel recommended that the G20 finance ministers should establish a mechanism to advise and independently assess the first-year implementation of the proposed roadmap.
According to the expert group, MDBs should focus their operations — financial as well as analytical–on helping national governments create and operationalise their respective country platforms for the highest priority sustainable development goals (SDG) and global public goods (GPG) sectors or themes, “as evidenced by the commitment of country leadership and degree of national investment”.
“Country platforms are a natural entry point for MDBs to work together better as a system, but their collaboration should be deepened in a number of areas, particularly around global and regional priorities. MDB collaboration has long been held back by lack of incentives and conflicting requirements from shareholders. This culture can best be reformed through institutional mechanisms of dialogue and joint strategy formulation by leadership teams at the highest level,” the second volume of the report said.
On bringing in more private sector investment, the expert group recommended breaking away from the culture of limited operational interaction between MDBs’ private financing arms and the sovereign activities of the MDBs.
“The private financing arms must do much more to crowd-in private investments for transformational change. They must be complemented by a whole-of-MDB approach to co-create investment opportunities with the private sector, develop project pipelines including through a revamped and expanded role of the Global Infrastructure Facility (GIF), and crucially, to mobilize and catalyze much higher volumes of private finance,” it said.