Context- India’s G-20 presidency in 2023 has primarily sought to strengthen multilateral development banks (MDBs) to address common global challenges.
MDBs need to be strengthened
- Renewed and strengthened MDBs are needed to meet the enormous global challenges of today’s world, such as ensuring the well-being of billions of people and the health of the planet.
- The Sustainable Development Goals have been seriously neglected, with more than 600 million people still living in extreme poverty.
- The window for action is fast closing as climate change and conservation and nature conservation must be addressed in all countries.
- Today’s threats can be transformed into tomorrow’s opportunities.
- The emerging growth story of the 21st century must be sustainable, sustainable and inclusive.
- It is a growth path that invests in people, provides livelihoods for people exposed to natural disasters, and is now built on innovations in green energy and digital technology.
- The MDB plays an important role in supporting the necessary reforms and resources.
- They work with governments and the private sector to create the conditions for investment and change.
- In addition, MDBs face increasing demands from donor and borrower countries to expand their lending activities beyond their core development mandate.
G20 Independent Expert Group on Strengthening the MDB
- It recommended that multilateral development banks (MDBs) adopt a three-pronged action plan.
- Adopting a triple mandate:
- end extreme poverty, increase shared prosperity and promote global public goods;
- triple sustainable lending by 2030; and
- creating a third financing mechanism that would allow flexible and innovative arrangements to appropriately partner with investors willing to support parts of the MDB program.
What is the Multilateral Development Bank (MDB)?
- Multilateral Development Bank (MDB) is an international financial institution established by two or more countries to promote the economic development of poor countries.
- They consist of member states from developed and developing countries.
- MDBs provide loans and grants to member states to finance projects that support social and economic development, such as building new roads or providing communities with clean water.
- Types: Multilateral development banks come in two main forms – international institutions such as the IMF and the World Bank and regional banks such as the ADB and AIIB.
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