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Indian Prime Minister Narendra Modi has called for expanding the mandate of multilateral lending institutions such as the World Bank, as the head of the International Monetary Fund asked for an increase in the agency’s resources by the end of the year.
Improving balance sheets and reforming the governance of the Washington-based multilateral lender have been central issues at this weekend’s Group of 20 summit in New Delhi, partly as a means for Western countries to curry favor with developing countries amid geopolitical divisions Russia’s war on Ukraine.
“We need to expand the mandate of multilateral development banks,” Modi said at the third leaders’ meeting of the New Delhi Leaders’ Summit starting on Saturday. “The decisions we take in this direction should be immediate and effective.”
Despite geopolitical tensions and discord over Ukraine, Indian officials say they have pushed ahead with an ambitious financial agenda during New Delhi’s chairmanship of the big economies grouping, including multilateral banking reform, cryptocurrency regulation and heavy lifting. Debt restructuring framework for creditor countries.
India, which bills itself as the leader of a group of developing economies in the so-called “global south,” successfully pushed the G20 on Saturday to admit the African Union as a full member of the group.
Modi’s call to expand the multilateral bank’s mandate echoed demands from the United States and the European Union for reform of the World Bank, which is seen as crucial to helping poorer countries meet the financial needs they need to transition away from fossil fuels and adopt green technologies.
Washington is also concerned that increased bilateral loans from China will lead to stronger diplomatic ties between countries in the global South and Beijing.
Ahead of the summit, U.S. President Joe Biden proposed increasing the World Bank’s lending capacity to middle- and low-income countries by $25 billion, with the potential to rise to more than $100 billion if other countries make additional commitments.
Separately, the EU has prioritized broad reforms of lending institutions to give developing countries greater influence over their decisions and operations. If the United States gives China greater voting rights, the United States may resist this approach.
On Saturday, leaders of the world’s 20 largest economies agreed in a joint statement “calling on (multilateral development banks) to make comprehensive efforts to develop their vision, incentive structures, operating methods and financial capabilities to better develop”. Make full use of its influence.
“Together, we will mobilize additional space and concessional funding to increase the World Bank’s ability to support low- and middle-income countries that need help addressing global challenges,” the statement added. It did not provide details on the possible scale or timeline of the increase. information.
Separately, International Monetary Fund Managing Director Kristalina Georgieva said the fund’s loan quotas needed to be increased. Leaders agreed to review their quotas by December 15 this year.
“To make the global economy stronger and more resilient in a world more vulnerable to shocks, it is crucial to reach an agreement before the end of the year to increase the IMF’s quota resources and ensure that the Fund provides interest-free resources needed to support the poorest countries,” Georgieva said in a statement at the summit.
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