MARRAKECH: Several countries are now more open to providing capital to multilateral development banks (MDBs), such as the World Bank, said N K Singh, the co-chair of the independent expert group on the reform of MDBs, but cautioned that it may take time before large quantum of private resources can flow to these entities.
“Even from the time of the constitution of the group the aversion to putting additional capital has whittled down, if not vanished. The only rider some people have is on the issue of sequencing, and not on the principle…So, recapitalisation is no more untouchable,” Singh said.
He said that there appeared to be unanimity among G20 countries as well as MDBs on the need to reform. “This should give a fillip to all the other MDBs which are present there in one form or the other. There’s a great degree of enthusiasm and a great degree of zest on the part of the MDBs to change,” he said.
He said that a crucial part of the reforms will be how MDBs make the required changes internally and how they work together.
While the World Bank has underlined the need to tap more private capital to support initiatives such as climate action, Singh appeared more cautious. “There is still a long way to go before we begin to garner very large quantum of private resources. There are other proposals on risk mitigation,” he said.
The panel of experts has also recommended an overhaul of the operations of International Finance Corporation, the World Bank’s private sector lending arm, and Multilateral Investment Guarantee Agency, along with targets to scale up funding.
“Even from the time of the constitution of the group the aversion to putting additional capital has whittled down, if not vanished. The only rider some people have is on the issue of sequencing, and not on the principle…So, recapitalisation is no more untouchable,” Singh said.
He said that there appeared to be unanimity among G20 countries as well as MDBs on the need to reform. “This should give a fillip to all the other MDBs which are present there in one form or the other. There’s a great degree of enthusiasm and a great degree of zest on the part of the MDBs to change,” he said.
He said that a crucial part of the reforms will be how MDBs make the required changes internally and how they work together.
While the World Bank has underlined the need to tap more private capital to support initiatives such as climate action, Singh appeared more cautious. “There is still a long way to go before we begin to garner very large quantum of private resources. There are other proposals on risk mitigation,” he said.
The panel of experts has also recommended an overhaul of the operations of International Finance Corporation, the World Bank’s private sector lending arm, and Multilateral Investment Guarantee Agency, along with targets to scale up funding.