Multilateral Institutions for the 21st Century

The global order has undergone dramatic changes since the Second World War due to economic growth and prosperity, decolonization, demographic dividends, technological achievements, emergence of new economic powers and deeper international cooperation. The United Nations must be responsive to the entire membership, faithful to its founding purposes and principles of its Charter and adapted to carrying out its mandate.

 In this context, we recall the Declaration on the Commemoration of the 75th anniversary of the United Nations (UNGA 75/1) which reaffirmed that our challenges are inter-connected and can only be addressed through reinvigorated multilateralism, reforms and international cooperation. 

The need for revitalized multilateralism to adequately address contemporary global challenges of the 21st Century, and to make global governance more representative, effective, transparent and accountable, has been voiced at multiple fora. In this context, a more inclusive and reinvigorated multilateralism and reform aimed at implementing the 2030 agenda is essential.

Reforming International Financial Institutions

  The 21st century also requires an international development finance system that is fit for purpose, including for the scale of need and depth of the shocks facing developing countries, in particular the poorest and most vulnerable. We are working to deliver better, bigger and more effective MDBs by enhancing operating models, improving responsiveness and accessibility, and substantially increasing financing capacity to maximise development impact. Stronger MDBs will be important to our efforts to mobilize financing from all sources for a quantum jump from billions to trillions of dollars for development. We underscore the need for enhancing representation and voice of developing countries in decision-making in global international economic and financial institutions in order to deliver more effective, credible, accountable and legitimate institutions. The international finance system must deliver significantly more financing to help developing countries and EMEs to fight poverty, tackle global challenges and maximise development impact.

We remain committed to pursuing ambitious efforts to evolve and strengthen MDBs to address the global challenges of the 21st century with a continued focus on addressing the development needs of low- and middle-income countries.

50. We endorse the G20 Roadmap for Implementing the Recommendations of the G20 Independent Review of MDBs Capital Adequacy Frameworks (CAFs) and call for its ambitious implementation, within MDBs’ own governance frameworks while safeguarding their long-term financial sustainability, robust credit ratings and preferred creditor status. We also call for a regular review of the progress of implementation on a rolling basis including through engaging with MDBs, subject experts and shareholders. We commend the MDBs for their progress in implementing the CAF recommendations, especially with respect to adapting definitions of risk appetite and financial innovation. We appreciate the ongoing collaboration among MDBs on the timely release of Global Emerging Markets (GEMs) data and the launch of GEMs 2.0 as a stand-alone entity by early 2024. Going forward, we also encourage MDBs to collaborate in areas such as hybrid capital, callable capital, and guarantees. We appreciate the enhanced dialogue between the MDBs, Credit Rating Agencies and shareholders and encourage continued transparency in the exchange of information and rating methodologies. We take note that initial CAF measures, including those under implementation and consideration, could potentially yield additional lending headroom of approximately USD 200 billion over the next decade, as estimated in the G20 CAF Roadmap. While these are encouraging first steps, we will need to give an additional push for continued and further impetus on CAF implementation.

Furthermore, we call on the MDBs to undertake comprehensive efforts to evolve their vision, incentive structures, operational approaches and financial capacities so that they are better equipped to maximize their impact in addressing a wide range of global challenges while being consistent with their mandate and commitment to accelerate progress towards Sustainable Development Goals (SDGs). We welcome the World Bank’s progress on their Evolution Roadmap and look forward to further steps by the IMF/WBG Annual Meetings in Marrakesh and beyond. Recognising the urgent need to strengthen and evolve the MDB ecosystem for the 21st century, we appreciate the efforts of the G20 Independent Expert Group on Strengthening MDBs in preparing Volume 1 of the Report and look forward to its examination in conjunction with Volume 2 expected in October 2023. We take note of Volume 1’s recommendations and the MDBs may choose to discuss these recommendations as relevant and appropriate, within their governance frameworks, in due course, with a view to enhancing the effectiveness of MDBs. We support the upcoming G20 High-Level Seminar, on the sidelines of the Fourth G20 FMCBG in October 2023 on strengthening the financial capacity of MDBs. Scaling up investment to meet development needs and global challenges requires a big push on investments and, in this context, we ask the IMF and the World Bank, in coordination with other relevant international institutions, to support efforts at enhancing domestic resource mobilisation in EMDEs. We call on the MDBs to also leverage private capital through innovative financing models and new partnerships to maximise their development impact. Recognizing other multilateral efforts, we take note of the Summit for a New Global Financing Pact.

Recognizing the imperative of achieving the SDGs, we will collectively mobilize more headroom and concessional finance to boost the World Bank’s capacity to support low and middle-income countries that need help in addressing global challenges, with a clear framework for the allocation of scarce concessional resources, and to provide strong support for the poorest countries. Therefore, we are exploring options that will deliver a powerful boost to IBRD headroom, reduce the cost of investments addressing global challenges, and increase the capacity of the IDA crisis response window. We also look forward to an ambitious IDA21 replenishment to increase IDA financing capacity. We acknowledge the concluding report on the 2020 Shareholding Review of the International Bank for Reconstruction and Development (IBRD) and look forward to the 2025 Shareholding Review.

We reiterate our commitment to a strong, quota-based, and adequately resourced IMF at the centre of the global financial safety net. We remain committed to revisiting the adequacy of quotas and will continue the process of IMF governance reform under the 16th General Review of Quotas (GRQ), including a new quota formula as a guide, and ensure the primary role of quotas in IMF resources, to be concluded by December 15, 2023. In this context, we support at least maintaining the IMF’s current resource envelope. We welcome the landmark achievement of the global ambition of USD 100 billion of voluntary contributions (in SDRs or equivalent) and USD 2.6 billion of grants in pledges for countries most in need and call for the swift delivery of pending pledges. We welcome the progress achieved under the Resilience and Sustainability Trust (RST) and Poverty Reduction and Growth Trust (PRGT). We call for further voluntary subsidy and loan pledges to the PRGT and will continue to monitor the effectiveness of RST supported programs. We look forward to the preliminary analysis by the IMF of the range of options to put the PRGT on a sustainable footing with a view to meeting the growing needs of low-income countries in the coming years. The G20 reiterates its continued support to Africa, including through the G20 Compact with Africa. We look forward to further progress on the exploration of viable options for voluntary channelling of SDRs through MDBs, while respecting relevant legal frameworks and the need to preserve the reserve asset character and status of SDR. We look forward to review of precautionary arrangements and take note of the discussions held on the IMF surcharge policy.