How MBDs can deal with the current polycrisis
In this commentary Summers and Ahmed argue that the global economy is facing different challenges ranging from increased interest rates, climate change and an epically strong dollar, to food-supply shortages, high inflation and a still-prevalent pandemic which threaten not just the global economy but also the livelihoods of hundreds of millions of people. Three actions are therefore important:
- Ease immediate financing pressures by alleviating the stigma countries that need IMF financing are faced with, as well as ensuring that the new funding commitments announced by the World Banks are disbursed quickly.
- Deal with unsustainable debt: Sixty percent of low-income countries and one-third of emerging markets are already at high risk of debt distress. To start, the large creditor countries of the Group of 20 should suspend debt service for the neediest countries, which would provide about $15 billion of cash-flow relief next year.
- Address long-term challenges such as climate change and pandemics:
Reducing the risk of pandemics, combating climate change and preserving biodiversity will require a new generation of investment that a reinvented World Bank would be uniquely positioned to catalyze. Sustainability must become as central to the bank’s work as reconstruction and development.
IMF-World Bank meetings are the last stop before a coming economic storm
By: Larry Summers, Masood Ahmed – Harvard University, Center for Global Development
How the MDB system must evolve in order to remain pertinent in the face of 21st century challenges
This is a call to action by independent think tank leaders in the U.S. The main points are:
- Update the Mission: Shareholders should call on the World Bank to make a public statement adopting climate mitigation and adaptation as a core institutional priority alongside poverty reduction and shared prosperity. There is need to substantially scale up the MDBs operations across the full spectrum of their client countries and change the way they operate in each context.
- Increase MDB Financial Firepower by: i) Reforming the financial framework; ii) Launching a green capital increase; iii) Private capital mobilization; iv) Rationalization and increase of concessional finance.
- Reform Terms and Conditions: shareholders should announce plans to explore a new array of financial and policy incentives to encourage countries to access MDB resources to be used in programs targeting global challenges.
- Set Out a New Operating Model: Shareholders should ask the management of the World Bank to set out the operational and organizational changes needed at the World Bank to significantly scale up mobilization as well as to incentivize countries to pursue robust investments in climate and other global challenges.
Independent Think Tank Leaders Issue Call to Action for MDB Reform
By: Center for Global Development
