Sat. May 25th, 2024

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NEW DELHI: Finance Minister Nirmala Sitharaman announced that India’s G20 presidency will outline the roadmap for transforming multilateral development banks (MDBs). The process aims to bolster these financial institutions and equip them to confront 21st-century challenges.

Speaking at the India-Japan Forum, Sitharaman highlighted the first volume of the NK Singh and Lawrence Summers report, published recently, which proposes effective solutions for addressing evolving issues like poverty alleviation and shared prosperity within MDBs.

The second part of the report, which will be released in October for discussion by finance ministers ahead of the G20 Annual meeting at Marrakech (Morocco), will set the road-map for the transformation of MDBs that will have to evolve to address the ongoing and upcoming challenges faced by the global economy, Sitharaman said.

While the large global financial institutions and MDBs like the World Bank and the International Monetary Fund (IMF) carry on with their objectives, newer windows for redressal of global issues related to climate change and digital infrastructure will need to be created, Sitharaman added.

“Volume one (of the report) has laid clearly how these objectives can be achieved. Once the roadmap with the second report happens, concrete movement can be seen,” she said.

“Both of which, I expect will happen during the Indian presidency,” she added.

The first part of the Singh-Summers report suggested the need to increase MDBs’ annual spending by $3 trillion by 2030, including $1.8 trillion for additional climate action and $1.2 trillion for achieving other sustainable development goals (SDGs).

It also recommends that G20 members review and endorse financing plans for each MDB and build consensus on operational reforms that balance speed, scale, and safeguards by 2024, when Brazil holds the presidency.

The second part of the NK Singh and Lawrence Summers report on strengthening multilateral development banks (MDBs) will review multiple suggestions for reforms, elaborate on operational reforms, speed of response and private capital mobilisation, including prospects for scaling up the Multilateral Investment Guarantee Agency (MIGA).

Sitharaman outlined the four-fold agenda of India’s G20 presidency, which includes the following objectives:

  • Enhancing the agility of multilateral development banks (MDBs) to tackle 21st-century challenges.
  • Ensuring prompt resolution of debt and debt-related matters.
  • Establishing a global regulatory framework for crypto assets beyond central bank jurisdiction.
  • Expanding digital infrastructure to meet growing demands.

She added that on several issues, common interests prevail and overlap between G20 and G7, and action points can emerge from convergence of thought between these two groups.

Interestingly, Japan is holding the G7 presidency during 2023.

On India’s plans to become a developed nation by 2047, Sitharaman said that the focus of the government is on four fronts, namely, infrastructure, investment, innovation and inclusive growth.

“Besides several investor-friendly reforms undertaken by the government,” she said.

“India has a very vibrant young population and the emphasis on skilling them to suit the requirements of the economy would yield dividends,” she added.

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Updated: 29 Jul 2023, 06:44 PM IST

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