GDP Center Roundup – IMF/World Bank Group Annual Meetings, 2023
By Sayuri Kataoka and Samantha Igo
Policymakers are facing a critical inflection point: the window to act on climate change is rapidly closing, climate shocks and overwhelming debt service payments threaten to undo decades of progress and stymie future investments in emerging markets and developing economies (EMDEs), while, concomitantly, the existing international financial system is not built to address increasingly global and overlapping challenges.
From October 9-15, 2023, the International Monetary Fund (IMF) and World Bank Group will host their Annual Meetings in Marrakech, Morocco, bringing together policymakers, civil society and researchers from around the world. This year’s meetings are particularly eventful, as the World Bank is set to vote on its new Evolution Roadmap, the IMF is undergoing its 16th General Review of Quotas and the first-ever assessment of progress in achieving the Paris Agreement goals – the Global Stocktake – is set to be finalized ahead of the 28th UN Climate Conference in Dubai, United Arab Emirates later this year.
Ahead of these meetings, the Boston University Global Development Policy Center has produced a suite of research to provide key policy recommendations on issues of sovereign debt, World Bank reform, integrating climate at the IMF and more.
Below, see a summary of the latest research:
Counting on the International Monetary Fund: Aligning the IMF Quota System with Global Need
In December 2023, the IMF is scheduled to conclude its 16th General Review of Quotas, a process required by the IMF’s Articles of Agreement. The 16th General Review of Quotas comes at a pivotal time of polycrisis for the global financial system and presents the Fund with an opportunity to not only increase the size of the IMF’s quota-based resources to respond to global crisis but also reform and align its governance for more voice and representation for EMDEs.
A new report by William N. Kring and Haihong Gao presents the key lessons that emerged from a December 2022 workshop on IMF quota reform hosted by the Boston University Global Development Policy Center. It outlines concrete steps for IMF shareholders to ensure that the IMF remains a legitimate, quota-based anchor of the Global Financial Safety Net (GFSN), the collection of global, regional and bilateral institutions designed to help provide short-term crisis finance. Read the report.
Safeguarding Decades of Development: The International Monetary Fund’s Role in Addressing Loss and Damage
Climate-induced loss and damage can affect the macroeconomic health and general well-being of climate vulnerable economies, rolling back decades of development gains. For members of the Vulnerable 20 Group of Finance Ministers (V20) alone, climate-induced losses amounted to 20 percent of their gross domestic product (GDP) over the last two decades.
As the global institution charged with maintaining fiscal and financial stability, the IMF has an important role to play in addressing climate-induced loss and damage.
A new policy brief from the Task Force on Climate, Development and the IMF proposes a ‘loss and damage package’ at the IMF that spans its surveillance, lending toolkit and global policy coordination. Read the policy brief.
Debt Relief by Multilateral Lenders: Why, How and How Much?
As the sovereign debt crisis in the Global South continues to unfold, the lack of involvement of multilateral development banks (MDBs) in debt relief efforts has become a contentious issue among major creditors. Although the Group of 20 (G20) has explicitly called for MDBs to develop options to share the burden of debt relief efforts, MDBs have not presented any concrete and systemic plan thus far on how to contribute to debt relief efforts to countries applying for the G20 Common Framework.
A new report from the Debt Relief for a Green and Inclusive Recovery (DRGR) Project by Marina Zucker-Marques, Ulrich Volz and Kevin P. Gallagher explains why MDBs must be included in debt relief efforts, estimates their fair share of the burden and explores policy alternatives to preserve their high credit ratings. They find that, while there are costs associated with providing debt relief, it is a prudent investment for long-term stability and development of debt-vulnerable nations. Read the report and read the blog summary.
The International Monetary Fund, Climate Change and Development: A Preliminary Assessment
As the international institution charged with maintaining global financial and monetary stability, the IMF has a vital role to play in ushering in a green transition that is as swift as it is just.
A recent report from the Task Force on Climate, Development and the IMF provides an independent, preliminary assessment of the IMF’s efforts to mainstream climate change. The assessment is evaluated through the development-centered lens articulated in the Task Force’s initial strategy report and advances actionable policy recommendations for the IMF and its stakeholders.
The Task Force finds that while modest progress has been made, the IMF must show greater leadership on climate change and development across its multilateral and bilateral surveillance activities as well as its lending toolkit. Read the report and read the summary blog.
World Bank Evolution as if Development and Climate Change Really Mattered: Four Foundations for Successful Reform
Tasked by US Secretary of the Treasury Janet Yellen, the World Bank has begun advancing an ‘evolution roadmap’ that reconsiders the mission, operations and financing of the institution in order to better provide the global public goods that are so lacking in the world economy today.
A recent policy brief by Kevin P. Gallagher and Rishikesh Ram Bhandary advances four foundations of a development-centered evolution of the World Bank, including (1) a mission-driven approach centered on investing in national development strategies that are equitable, low-carbon and resilient to reduce poverty and provide global public goods, (2) a better operational model that minimizes risk and waste, while maximizing sustainable development, (3) a stepwise increase in the scale of World Bank capital and lending capacity and (4) increased voice, representation and accountability to developing countries and their citizens.
The brief is the outcome of a workshop hosted by Boston University Global Development Policy Center in 2022 and is signed by 12 experts (in their personal capacity) who work at some of the foremost institutions and think tanks on global development in the world, including the South Centre, African Economic Research Center, Centre for Social and Economic Progress India, the V20, the Development Bank of Southern Africa and more. Read the policy brief.
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