The Great Mobilization: Reforming and Strengthening Multilateral Development Banks in the Age of Polycrisis

Regardless of the figure cited – $1 trillion in external financing annually for emerging market and developing countries (EMDEs), at least $6 trillion by 2030 to meet less than half of developing countries’ existing Nationally Determined Contributions, $500 billion annually to adapt to climate change – it is clear that the costs of mitigating and adapting to climate change are tremendous.

Mobilizing resources of this scale is a colossal undertaking, particularly as EMDEs are simultaneously facing a soaring cost of capital, a looming debt crisis, pressure from Russia’s war in Ukraine and increasing climate shocks.

Multilateral development banks (MDBs), as key providers of critical global finance, have a vital role to play in achieving shared development and climate goals. Research shows, and was underscored by an independent review of the Capital Adequacy Frameworks commissioned by the Group of 20 (G20), that MDBs can collectively increase their lending between $598 billion to $1.903 trillion. The G20’s latest report calls for tripling lending levels by 2030 backed by fresh injections of money and stretching balance sheets.

Expanding lending alone will not be enough, however. MDBs are also significant holders of Global South debt and must play their part in helping debt distressed countries restore their financial health. Scaling up lending, optimizing the impact of financing and supporting structural transformation of economies means that deeper reforms are needed to make the international financial architecture fit-for-purpose. The recognition that MDBs need to change has led to efforts like the World Bank’s Evolution Roadmap, but key questions remain about what those reforms should look like.

What key reforms are needed as the World Bank navigates the Evolution Roadmap? How much debt relief should MDBs provide in order for countries in or at high risk of debt distress to invest in their climate commitments and development goals? What solutions, old and new, are there for covering MDB losses and maintaining their preferred creditor status? And what reforms can make the international financial architecture fit-for-purpose?

Join us on Wednesday, October 4 from 10:00-11:00AM ET for a webinar discussion ahead of the 2023 International Monetary Fund/World Bank Group Annual Meetings on reforming and strengthening MDBs to meet shared climate and development goals.

Speakers:

- Amar Bhattacharya, Senior Fellow, Brookings Institution

- Marina Zucker-Marques, Post-doctoral Researcher, SOAS, University of London

- Cecilia Nahón, Executive Director (Argentina, Bolivia, Chile, Paraguay, Peru, Uruguay), World Bank

- Kevin P. Gallagher (Moderator), Director, Boston University Global Development Policy Center