BRETTON WOODS FOR THE SOUTH

THE NEW DELHI DECLARATION OF THE G20 REITERATED THE COMMITMENT TO REFORM MULTILATERAL DEVELOPMENT BANKS. FINANCE MINISTERS HAVE TAKEN THIS FORWARD AT MARRAKESH BUT CHANGES WON'T OCCUR OVERNIGHT

- SURABHI

ONE OF THE top priorities during India’s soon to be concluded G20 presidency was finding ways to finance the world’s increasingly complex development challenges. And India made a start to this end with the New Delhi Leaders’ Declaration taking up the issue of reforming international financial institutions. There is palpable excitement about the move that could usher substantive changes in not only the work that these multilateral development banks (MDBs) do, but also bridge the funding gap through greater private sector engagement, especially after the fourth meeting of finance ministers and central bank governors in Marrakesh in October.

The MDBs were set up in a different era. The World Bank, for instance, was set up in 1944, and its articles of agreement included rebuilding the economies of countries devastated by war and increasing the economic development of developing countries. When it began operations in 1946, it had 38 members; now almost all countries of the world are its members. Similarly, the International Monetary Fund (IMF), too, was established in 1944 after the Great Depression of the 1930s with 44 founding member countries that sought to build a framework for international economic co-operation. Now, it has 190 countries as members.

QA

‘‘MDBs NEED TO BE THE TIP OF THE SPEAR’’ 

Lawrence Summers