Second report by G20 group to look at other sources of funding for MDBs: CEA Nageswaran

India's Chief Economic Advisor V Anantha Nageswaran

Multilateral development bank (MDB) reforms are a key part of the agenda during India’s G20 presidency. The second part of a report by an Independent Expert Group constituted to recommend MDB reforms will be released next month. It will look at sources of funding to meet existing and emerging global challenges from the Covid pandemic, war, etc, said Chief Economic Advisor (CEA) Anantha Nageswaran.

The group, chaired by Lawrence Summers, President Emeritus, Harvard University, and NK Singh, Chairperson of the Fifteenth Finance Commission of India, has already submitted the first part of its report.

“The next part of the report will be out in October. Developed countries want MDBs to also consider global challenges. The issue is to find the resources for banks to be able to finance both the standard poverty alleviation and sustainability goals and existing and emerging global challenges from the pandemic, war, etc.,” CEA Nageswaran told Moneycontrol.

The second part of the report will focus on attracting other sources of funding for MDBs, he added.

“India has carried forward the discussion trying to get consensus on the steps required. It is ongoing. We have moved it forward a bit,” he said.

“Many countries say even food, energy, water issues transcend boundaries. These are global challenges. There are developmental challenges that they used to finance earlier, like education, water and other development-related funding,” said the CEA. “The first step was the committee appointed under the Indonesian presidency, addressing the capital adequacy framework. The second is to streamline internal procedures, processes and incentive systems. The question is, what else can we do with existing capital?”

The next step is to increase capital for the IDA (International Development Association), the IBRD (International Bank for Reconstruction and Development), etc, he said.

Nageswaran noted that India has managed to find a consensus on economic issues, including crypto regulation and taxation.

“Only political issues are contentious; the rest we have managed to find a consensus to move the agenda forward on debt issues, crypto regulation and taxation, infrastructure… It’s usually the political part that becomes the subject of intensive discussion,” he said.