Finance News: Finance is the backbone of advancing any development work. It is also the fuel for the economy to work efficiently. The Finance Track for the G20 countries also holds immense significance. G20 Finance Track discusses global macroeconomic issues through its meetings of Finance Ministers and Central Bank Governors, their Deputies and various working group meetings.
G20 member nations consist of 2/3rd of the global population with 80% of global economic output. In this context, steps taken by G20 becomes crucial, impacting a large share of the population. Some of the key issues dealt with by the Finance Track are the global economic outlook and monitoring of global economic risks, reforms for a more stable and resilient global financial architecture, etc. To further build the finance mechanism robustly, a G20 Expert Group on “Strengthening Multilateral Development Banks” (MDBs) has been constituted.
What are Multilateral Development Banks?
Multilateral Development Banks (MDBs) refer to international financial institutions that provide development and other assistance to nations. MDBs include World Bank, IMF, BRICS Development Bank, Asian Development Bank, New Development Bank, etc.
MDBs provide long-term loans for the capital-intensive infrastructure sector for developing countries, assist to deal with humanitarian crisis situations, help nations to build capacity for resource generation and exploration, etc. Hence MDBs are crucial for the development of nations.
Objectives of the Expert Group:
MDBs play a significant role in financing the different developmental needs of the nations. The objectives for the formation of the Expert Group are designed keeping in mind the needs of the changing dynamics. The objective includes building a roadmap for an updated MDB ecosystem for the 21st century, with milestones and timelines, touching upon all aspects of MDB evolution.
Financing for achieving Sustainable Development Goals (SDGs) has also been one of the key agendas of the Sustainable Financial Working Group of G20. Hence, the Expert Group also aims to strengthen MDBs in a manner to better equip nations to better resolve transboundary challenges such as climate change and health. In the backdrop of Covid-19, financing to tackle unplanned challenges and development becomes even more crucial.
The objectives of the Expert Group also includes an evaluation of various estimates regarding the scale of funding required by and from MDBs for addressing their and member countries’ increased financing need. The need to augment the additional capacity of private sector and public sector funds is also to be taken into account.
Composition of the Expert Group:
The composition of the Expert Group as mentioned by the Ministry of Finance includes, co-convenors and members. The co-convenors are Professor Lawrence Summers, President Emeritus, Harvard University and NK Singh, President, the Institute of Economic Growth and Former Chairperson, Fifteenth Finance Commission of India.
Members of the Expert Group are:
Tharman Shanmugarathnam: Senior Minister, Government of Singapore
Maria Ramos: Chairperson of AngloGold Ashanti and former Director-General of the National Treasury of South Africa
Arminio Fraga: Founder, Co-CIO Hedge Funds and Private Equity, Gávea Investimentos and former Governor, Central Bank of Brazil
Prof Nicholas Stern: IG Patel Professor of Economics and Government, London School of Economics
Justin Yifu Lin: Professor and Honorary Dean of National School of Development at Peking University and former Senior Vice President & Chief Economist of the World Bank
Rachel Kyte: Dean of the Fletcher School of International Affairs at Tufts University and former Vice-President of World Bank
Vera Songwe: Non-resident senior fellow in the Africa Growth Initiative at the Brookings Institution and former Executive Secretary, Economic Commission for Africa
The Expert Group will submit its report to the Indian Presidency of the G20 before 30th June 2023.