World Bank, IMF Spring Meetings 2023: What did FMs, central bank governors discuss?

World Bank and International Monetary Fund’s Spring Meetings provided a much-needed forum for deliberations on how to solve the most pressing issues

As the world’s top ministers, central bankers, senior business executives, civil society representatives and academics gathered in Washington DC last week for the Spring Meetings 2023 to discuss the most pressing challenges facing the world, there was hope for real policy change, going beyond platitudes.

The globe is at a crucial point in history. War, deglobalisation, geopolitical tensions, inflation and monetary tightening come at a time when climate change threatens lives and livelihoods both in the developing and the developed world.

As countries align with new power centres in a world that could increasingly become multipolar, the World Bank and the International Monetary Fund’s Spring Meetings provided a much-needed forum for deliberations on how to solve the most pressing issues. Moreover, the conversations didn’t stop at the meetings, with several dinners and conferences planned around the event in Washington DC.

The set of policymakers is due to meet again at the annual meetings of the World Bank in Marrakesh, Morocco, in October. Mastercard Chief Executive Ajay Banga would have taken over as the President of the World Bank Group by then as incumbent David Malpass steps down next month.

Key outcomes

Maplass impressed at the Spring Meetings that policy changes around the world are vital to increase growth and production. He was confident that the discussions yielded signs of progress on the need for greater debt transparency, increased development finance, more impactful climate action, and a sharper focus on the World Bank Group’s vision and mission.

“Our member countries endorsed measures that can add up to $50 billion of IBRD (International Bank for Reconstruction and Development) lending capacity over the next 10 years. There was full recognition of the importance of concessional resources and private sector investment. This still falls far short of the resource needs for development and climate,” he said.

Going forward, the World Bank board and member countries must focus on restoring growth, alleviating poverty, creating broad-based advances that raise living standards, addressing climate costs, and allowing capital to flow as effectively as possible, according to Malpass.

Preparing for crises

Movement was also seen on the so-called Evolution Roadmap process, designed to bolster the World Bank Group’s ability to confront the complicated development landscape and devote more resources to global challenges, like climate change, pandemics, and fragility.

The Development Committee, a ministerial-level forum that represents 189 member countries, noted that achieving the goals of ending extreme poverty and promoting shared prosperity requires a strong focus on sustainability, resilience, and inclusiveness, and welcomed proposals to strengthen the WBG’s operational model and financial capacity to help achieve its mission.

Combating the climate crisis will be a priority in this work, according to the World Bank Group, which sees its role in providing direct support, managing, implementing, and verifying the climate impact of projects.

Debt sustainability

With debt in developing countries at a 50-year high, the issue of debt sustainability was also a focus area with the Global Sovereign Debt Roundtable talking about ways to speed the debt restructuring process and make it more efficient.

The roundtable agreed on the need to improve information sharing, including on macroeconomic projections and debt-sustainability assessments.

Slowing global growth and rising interest rates are pushing countries into debt crises.

“World Bank and IMF have looked for ways to improve the G20 process so it would be more timely. Actually move the process along and actually reach a result in terms of debt sustainability for the countries. So there's still a lot of work to be done,” David Malpass said.

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On Ukraine

The third Ministerial Roundtable Discussion for Support to Ukraine was attended virtually by Ukrainian President Volodymyr Zelensky. With the estimated that the cost of recovery and reconstruction in Ukraine rising to over $400 billion, the World Bank discussed ways to build consensus around a long-term financing strategy, including the role of the private sector.

The World Bank Group has mobilised more than $23 billion in support for Ukraine since the war began.

India’s contributions

Finance Minister Nirmala Sitharaman and Reserve Bank of India Governor Shaktikanta Das were among the participants in the Spring Meetings 2023. Sitharaman also attended several events outside of the meetings and engaged with academia and investors.

The second meeting of G20 Finance Ministers and Central Bank Governors under the Indian G20 Presidency was held on April 12-13, on the margins of the 2023 Spring Meetings. The meeting saw participation of around 350 delegates from G20 members, 13 invitee countries, and various international and regional organisations.

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Sitharaman also co-chaired the Global Sovereign Debt Roundtable and participated in a high-level event on Sri Lankan debt issues.