[1/2]French President Emmanuel Macron speaks at an alliance on the theme of entrepreneurship as part of the New World Financial Agreements Summit at the Brongniart Palace in Paris, France, 22 June 2023.Emmanuel Dunant/Pool, via Reuters
PARIS (Reuters) – Multilateral development banks are expected to unleash $200 billion of additional firepower in emerging economies by running their balance sheets closer together and taking on more risks, they said. said world leaders who met on Friday at a summit in Paris.
Many of the nearly 40 leaders gathered in Paris believe the World Bank and International Monetary Fund are increasingly outdated in tackling challenges such as climate change and the debt burden of poor countries after COVID-19. expressed concern.
“By optimizing our balance sheets and taking on more risk, we expect to see an overall $200 billion ($200 billion) increase in MDB lending capacity over the next decade,” the summit’s final statement seen by Reuters said. ” is stated.
“If these reforms are implemented, MDB may need more capital,” he added.
U.S. Treasury Secretary Janet Yellen said in Paris ahead of the summit that efforts should be made to further throttle lending from development finance institutions before considering the possibility of a capital increase.
The United States is the largest shareholder of the IMF and World Bank.
Hosted by French President Emmanuel Macron, the Paris Summit brought together some 20 African leaders, a Chinese prime minister and a Brazilian president to kick-start a new global monetary policy.
At the summit, rich countries finalized an overdue $100 billion climate finance pledge to developing countries and created a fund for biodiversity and forest protection.
The summit aims to create a multi-faceted roadmap that can be used over the next 18-24 months, from debt relief to combating climate change. Much of the agenda features proposals from a group of developing countries called the Bridgetown Initiative, led by Barbados Prime Minister Mia Mottley.
“There is a political consensus that this problem is bigger than any one of us and we must work together, multilateral development banks need to change the way they do business, and that is acceptable,” Motley said at the final panel of the summit. there are,” he said.
“We leave Paris with the determination to not just give a speech, but to go into detail to ensure that what we have agreed to is implemented.”
Leaders will also reform post-war financial institutions and address climate change by gaining agreement on how to advance a number of struggling initiatives in institutions such as the G20, the COP, the IMF/World Bank, and the United Nations. I expected to raise funds for volatility countermeasures.
The $100 billion pledge falls far short of the actual needs of poor countries, but it is a symbol of rich countries’ failure to deliver the climate finance they promised. This has fueled distrust in broader climate negotiations among countries seeking to step up efforts to reduce CO2.
“If we can’t shape this rule like we’ve done in other previous cases, we will be responsible for what could potentially be the worst reality for humanity,” Motley said. said.
Additional reporting by Casey Hall from Shanghai and Simon Jessops from London.Editing: Toby Chopra
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