ISLAMABAD: A high-level panel on multilateral development banking has proposed an explicit new mandate for the World Bank to promote global public goods critical to development as its major priority.
The new mandate should create a new financing window or fund with a separate governance structure and a target of deploying $10 billion in grant resources annually within the next five years.
The report by the panel has been welcomed by the heads of the Asian Development Bank, African Development Bank, Inter-American Bank Group, and the European Bank for Reconstruction and Development.
The resources should be directed to selected programmes with substantial spillovers at the global level, primarily in agriculture, energy/climate, health and development policy data and research that cannot easily be structured or priced as traditional country operations, according to the report released by the Washington-based Center for Global Development.
The funds should be challenged as grants, including to other institutions; and as subsidies to select lending operations, including those of other multilateral development banks (MDBs), for which borrowers cannot be expected to bear the full costs.
To finance this new mandate, in addition to possible member capital and cash contributions, shareholders should call for a new business model at the World Bank, leveraging future International Development Association (IDA) reflows to free substantial resources for the new grant window.
To finance the new mandate, in addition to possible member capital and cash contributions, shareholders should call for a new business model at the World Bank, leveraging future IDA, reflows to free substantial resources for the new grant window, panel report says.
The heads of regional development banks, in a statement, described the report as an important at a critical moment as the multilateral development partners have moved into a high gear to deliver on the ambition of the 2030 Agenda for Sustainable Development and the historic Paris agreement on climate.
As the Panel recognises, the Multilateral Development Banks (MDBs) are essential and uniquely-qualified players in the international financial architecture, they said.
In the coming months and years, we have only a short window of opportunity to put in place the enhancements to the MDB system which would allow us to maximise our collective impact in supporting the delivery of the 2030 Agenda.
“Let us work together to ensure that the system of MDBs as a whole will deliver to its maximum potential”, said President of African Development Bank, ADB President Takehiko Nakao; President of European Bank for Reconstruction and Development, Suma Chakrabarti; and President of Inter-American Bank Group, Luis Alberto Moreno.
In response to today’s compelling development and climate imperatives, shareholders should support a substantial increase in financing sustainable infrastructure by the MDBs over the next decade.
A reasonable target is to reach $200bn a year from current levels of about $50bn, taking into account any increased financial capability at the two new banks, they said.
Published in Dawn October 11th, 2016
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