How World Bank and IMF Spring Meetings Can Build Momentum for Transformative Change
4th April 2024: The past year brought incremental gains in the global financial system reform agenda on the way to a bigger, better multilateral development system. The evolution of the World Bank is well underway, and the IMF is set to chart new priorities as it evaluates a new leadership term. However, much more is needed to deal with the economic shocks from climate impacts, inflation, and other crises, and to navigate the worldwide transition to net zero. At this year’s Spring Meetings, the leaders of the global economy can answer these calls by setting out ways to address debt crises, promote economic resilience, and provide additional financial resources to address global challenges.
The IMF can play a vital role in supporting fragile economies that are increasingly at risk from climate change as it did during the COVID-19 crisis by injecting liquidity into the global system and setting up the Resilience and Sustainability Trust. However, much remains to be done. The Springs, and the perspective of a new mandate for the IMF’s Managing Director, will be an opportunity to see how the IMF steps forward to be the guardian of global financial and climate resilience.
The World Bank and the broader MDB ecosystem should be ready to deliver the necessary financing into those economies. The World Bank Evolution Roadmap, the recommendations from the G20’s Capital Adequacy Framework review, and fresh injections of capital into the MDB system are necessary to ensure that these institutions can support the world to deliver climate mitigation, support adaptation, and fund loss and damage from climate change, as well as drive progress on development challenges. The Spring Meetings are a chance to promote finance innovations, delivering on much of the Evolution Roadmap and driving climate ambition.
It is also critical that G20 Finance Ministers agree to a meaningful communiqué. Traditionally, the April Finance ministerial marks the first critical pivot point in annual G20 sequences.
Quotes
Danny Scull, Senior Policy Advisor, E3G said:
“We’re a year into World Bank Evolution, and it’s fair to say real progress has been made under Ajay Banga. Now comes the hard part – making all these technical adjustments add up to transformational change on climate, poverty, and inequality. It can be done…if donor governments get serious about their commitments.”Ronan Palmer, Chief Economist, E3G said:
“We’ve seen great leadership at the IMF from Kristalina Georgieva, but the IMF still has a lot of ground to make up on climate resilience. As she heads to a likely second term at the helm, these Spring meetings are a chance for her to start to map the next steps and set a path for the IMF to use its role as guardian of economic stability to support the world’s most vulnerable countries address their vulnerability to the climate crisis.”Sima Kammourieh, Programme Lead at E3G said:
“Brazil has shown much-needed ambition for its 2024 presidency of the G20, designing a strong agenda for full-fledged finance system reform for climate and development. The first serious test of this G20 presidency is the April meeting of G20 Finance Ministers. We need to see G20 countries agree to a strong communiqué that demonstrates consensus on this agenda. More broadly, G20 Finance Ministers need to show they are committed to reviving multilateral financial diplomacy, which is essential considering the multiple challenges faced by the global financial system.”