The primary focus of the Indian G20 presidency has been to strengthen multilateral development banks and address the shared global economic challenges, said Finance Minister Nirmala Sitharaman on Friday at a G20 event in Mumbai.
Focusing on the challenges hitting MDBs, Sitharaman said these entities are facing increasing demands from both donor and borrowing countries, primarily to do with expanding their lending operations beyond core development mandates.
While MDBs are not currently equipped to address these demands, Sitharaman said that the Indian G20 presidency has set up an independent expert group to look into strengthening MDBs.
Some of the recommendations to enhance the capacity of MDBs include:
To tackle global challenges alongside their core missions of poverty reduction and shared prosperity.
To triple the sustainable lending level by 2030.
To enhance their financial strength through capital adequacy improvements and general capital increases.
Lately, the role of MDBs in sustainable development strategies has been advocated for. The G20 independent expert group, co-convened by NK Singh, has been set up with a focus on strengthening these MDBs. It has also submitted volume 1 of its report, along with a suggestion to constitute a ‘Global Challenges Funding' mechanism for ‘Global Public Goods'.
The Finance Minister also touched upon the issue of 'escalation of debt in vulnerable economies', which poses significant economic risks to development.
"Indian G20 presidency has placed great responsibility on the management of global debt," Sitharaman said. "By restructuring existing debt and providing access to affordable finance, the international community must help other countries achieve a fair and inclusive future," she said.
This year, India has made efforts to provide momentum for debt treatment for some countries, the finance minister said. In light of this, unlocking the potential of digital progress becomes important for a better future, she said.
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