Developing Countries Lead the way for Global Economic Governance
As members of the Western-led financial institutions, the International Monetary Fund and the World Bank, meet with finance ministries and central banks in Washington over the next few days, the center of gravity for leadership is shifting to other shores. Since the global financial crisis that occurred over a decade ago, there is now more than $15 trillion in short-term liquidity financing available in the world economy and $6 trillion in development finance. According a new policy brief “Remapping Global Economic Governance: Rising Powers and Global Development Finance” by the Global Economic Governance Initiative (GEGI) at Boston University’s Global Development Policy Center (GDP Center), 63 percent of all the emergency short-term liquidity finance to mitigate financial crises and over 80 percent of all development banking finance is now housed in emerging market and developing countries.
According to a second GEGI policy brief, published by the GDP Center and the Center for New Structural Economics at Peking University, development banks from emerging market and developing countries are also making deep inroads into financing progress toward the Sustainable Development Goals—though they face unique challenges as well. The policy brief “Leading from the South: Development Finance Institutions and Green Structural Transformation” shows how many developing country-led regional and national development banks are leading forces for low-carbon energy finance across the developing world. The Islamic Development Bank already earmarks 28 percent of all energy finance toward green energy and has even higher goals moving forward. The New Development Bank and the Asian Infrastructure Bank are brand new but have incorporated green energy finance into their mandates from the get go. The China Development Bank, the largest development bank in the world, has begun to finance green energy, and others such as the Development Bank of Southern Africa in South Africa and Mexico’s Nacional Financiera have found creative ways to stretch smaller balance sheets toward green energy.
Remapping Global Economic Governance: Rising Powers and Global Development Finance
Leading from the South: Development Finance Institutions and Green Structural Transformation (ENGLISH)
Leading from the South: Development Finance Institutions and Green Structural Transformation (CHINESE)
The Global Development Policy Center is a Boston University wide research center in partnership with the Pardee School of Global Studies. The GDP Center’s mission is to advance policy oriented research on financial stability, human wellbeing, and environmental sustainability.