The G20, under the aegis of India’s Presidency, has set up an expert group on strengthening Multilateral Development Banks (MDBs) with Harvard University president emeritus Lawrence Summers and Institute of Economic Growth president NK Singh as co-conveners, union finance ministry said on Tuesday.
The objectives of the expert group include preparation of a roadmap for an updated MDB ecosystem for the 21st century, with milestones and timelines, touching upon all aspects of MDB evolution, including but not limited to vision, incentive structure, operational approaches and financial capacity so that MDBs are better equipped to finance a wide range of Sustainable Development Goals (SDG) and transboundary challenges such as climate change and health, it said in a statement.
The panel will also focus on mechanisms for coordination among MDBs to address and finance global development and other challenges more effectively, it added.
Also Read: Second G20 Tourism Working Group meeting in Siliguri, Darjeeling from April 1
It will also evaluate various estimates regarding the scale of funding required by and from MDBs for addressing their and member countries’ increased financing needs for SDG and transboundary challenges, taking into account the additional capacity that can be derived from the CAF recommendations alongside other important sources such as the private sector and public sector funds, it said.
Capital Adequacy Frameworks (CAFs) play a crucial role in providing affordable financing to the most vulnerable countries.
At the 3rd G20 Finance Ministers and Central Bank Governors (FMCBG) meeting held in Bali on 15-16 July 2022, the G20 had welcomed the report ‘Boosting MDBs’ investing capacity’ on the independent review of CAFs of MDBs.
The report made five key recommendations for MDBs – adapt approach to defining risk tolerance, give more credit to callable capital, expand uses of financial innovations, improve credit rating agency assessment of MDB financial strength, and increase access to MDB data and analysis.
“The Expert Group will submit its report to the Indian Presidency of the G20 before 30th June 2023,” the statement said.
According to the Harvard Kennedy School’s website, during the past two decades Summers served in a series of senior policy positions, including Vice President of development economics and chief economist of the World Bank, Undersecretary of the Treasury for International Affairs, Director of the National Economic Council for the Obama Administration from 2009 to 2011, and Secretary of the Treasury of the United States, from 1999 to 2001.
Singh — a prominent Indian policymaker, economist and academician — was the chairman of the 15th Finance Commission.
He also presided as chairman of the Fiscal Responsibility and Budget Management Review Committee (FRBM), responsible for setting targets for the government to reduce fiscal deficits.
He also served as a member of the Upper House of the Parliament, the Rajya Sabha, from 2008 to 2014, during which time he contributed to several prominent Parliamentary Standing Committees including the Public Accounts Committee, the Committee on Foreign Affairs, and the Committee on Human Resource Development.
Other members of the panel are Tharman Shanmugarathnam, senior minister, Government of Singapore; Maria Ramos, Chairperson of AngloGold Ashanti and former Director-General of the National Treasury of South Africa; Arminio Fraga: Founder, Co-CIO Hedge Funds and Private Equity, Gávea Investimentos and former Governor, Central Bank of Brazil; Nicholas Stern: IG Patel Professor of Economics and Government, London School of Economics; Justin Yifu Lin: Professor and Honorary Dean of National School of Development at Peking University and former Senior Vice President & Chief Economist of the World Bank; Rachel Kyte: Dean of the Fletcher School of International Affairs at Tufts University and former Vice-President of World Bank; and Vera Songwe: Non-resident senior fellow in the Africa Growth Initiative at the Brookings Institution and former Executive Secretary, Economic Commission for Africa.