Washington/New Delhi: US President Joe Biden has rallied G20 nations to agree to collectively mobilise more headroom and concessional finance to boost the World Bank’s capacity to support low- and middle-income countries, the White House said on Saturday.
Biden is currently in New Delhi to attend the annual G20 summit being hosted by India from September 9-10.
“We are aiming for our joint contributions to deliver a one-time boost to IBRD (International Bank for Reconstruction and Development) equivalent to three times the World Bank’s annual non-concessional lending volume, and to double IDA’s crisis lending capacity,” the White House said in a press statement.
This initiative, it said, will make the World Bank a stronger institution that is able to provide resources at the scale and speed needed to tackle global challenges and address the urgent needs of the poorest countries.
“In New Delhi, President Biden rallied G20 partners to agree to collectively mobilise more headroom and concessional finance to boost the World Bank’s capacity to support low- and middle-income countries,” the statement said.
Biden is leading a major new initiative with G20 partners to fundamentally reshape and scale up the World Bank to more effectively deliver poverty reduction and inclusive economic growth while better addressing global challenges that can undermine the achievement of these very goals, it said.
The G20 member countries represent around 85 per cent of the global GDP, over 75 per cent of the global trade, and about two-thirds of the world population.
The White House said a growing coalition of countries has come together to reform the World Bank’s mission and vision, incentives, operational model, and financing capacity.
“With measures implemented and identified under the G20’s Capital Adequacy Review, the multilateral development bank system could unlock USD 200 billion in new lending capacity over the next decade,” it said.
To amplify the impact of the ongoing reforms to the World Bank and advance progress at a global level, President Biden has asked Congress for support that would unlock new concessional World Bank financing by more than USD 25 billion just from US action.
Biden has asked the US Congress for funding to unlock USD 25 billion in new International Bank for Reconstruction and Development (IBRD) concessional lending capacity and provide borrowers more headroom so that they can address global challenges.
“This new lending capacity will enable the World Bank to better support developing countries by providing more resources on better terms, and helping countries pursue more ambitious reforms and development projects with regional and global benefits,” the statement said.
The White House asserted that the World Bank must continue to pay sufficient attention to the needs of the poorest and most vulnerable countries, which are facing multiple, compounding crises, including those stemming from global challenges.
“President Biden has requested from Congress funding to provide a USD 1 billion contribution to support the International Development Association’s (IDA) immediate crisis response in the world’s poorest countries,” it said.
Biden will continue to call on G20 Leaders to commit to further progress on evolving the World Bank and other multilateral development banks over the next year, and he will push for concrete results by the Rio de Janeiro Summit under Brazil’s G20 Presidency in 2024, it said.
The G20 grouping comprises Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, the Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the UK, the US and the European Union (EU).
In a significant milestone under India’s G20 presidency, the African Union on Saturday became a new permanent member of the grouping of the largest economies of the world, in the first expansion of the influential bloc since its inception in 1999.