New cross-border risks need new approaches: Economists

2023-05-09 18:11:25

New cross-border challenges, including climate change, pandemics, fragility and migration require new finance capacity and approaches, according to economists NK Singh and Larry Summers. The two co-chair an independent G20 expert group for firming up a road map for an updated eco-system for multilateral development banks (MDBs).

Seeking inputs from experts and other stakeholders on ways to reform the MDBs, they said such banks are uniquely positioned to help countries meet challenges like climate change and food security. But, at the same time, there is a general recognition that they are not fit for the 21st century, they added.

The group has to submit its report by July, so the time for submitting inputs is short, they said.

Singh is the president of the Institute of Economic Growth, while Summers is the president Emeritus of Harvard University.

The panel has been set up under India’s G20 presidency to develop a road map for an updated MDB ecosystem (with milestones and timelines) that includes vision, incentive structure, operational approaches and financial capacity. It would evaluate estimates of the finance scale needed to and from MDBs and propose mechanisms for coordination among MDBs.

The total flow of support from the World Bank and other MDBs to developing countries was $192 billion in 2022. “While this is a substantial figure, it is a third less than the share of developing country GDP attained in 2009 (during the global finance crisis), even as the need for investments in assuring that development is sustainable has greatly increased since then,” they added.

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