A report by the independent expert group co-chaired by former US Treasury Secretary Larry Summers and the 15th Finance Commission Chairman NK Singh calls for broadening mandate for global public goods, such as climate change, raising resources for poor and developing countries by innovative financing measures, tapping into private pools of capital and increasing equity base to $100 billion Have done , Singh told the FM that the report sought to “establish a more definitive relationship between mandate, finance, operating model and conformance of the MDB system”.
He said, in addition to the triple mandate, the recommendations included generating $1 trillion in additional external financing, of which $260 billion was to come from the MDB. “The most efficient and appropriate solution would be a normal capital increase. Given the timing of the capital raise, the new equity may not be concurrent, nor commensurate with the balance sheet optimization. However, an early launch will send the right signals to credit rating agencies, the market and other stakeholders,” Singh said at the meeting. Economic Affairs Secretary Ajay Seth said the MDBs will discuss the plan in their board, while the FM Nirmala Sitharaman Said that the decision by the countries is expected after the roadmap is clear and the independent expert group submits its second report, which will deal with the exploitation of private capital.
Summers, who joined the meeting virtually, advocated for sweeping changes.
“Given the seriousness of the issue, it was time to ‘dissent’. Only ‘discontent’ leading to transformative changes can enable the MDB to rediscover its relevance to respond to challenges,” a source quoted Summers as saying.
The former treasury secretary is said to have underlined the need to do everything possible to improve the efficiency of MDBs and suggested that capital infusion was necessary.