Facts for Prelims
Context: Under the aegis of India’s G20 Presidency, an 11-member G20 Expert Group on “Strengthening Multilateral Development Banks (MDBs) has been constituted.
What is MDB?
MDB is a financial institution established by multiple member countries and falls under international law. E.g., International Monetary Fund, World Bank, Asian Development Bank etc.
Focus area: How can World Bank and other bodies contribute towards climate finance, critical for developing and LDCs to make a smooth transition to lower carbon emissions without compromising on growth.
Objectives of MDB: Stabilizing the global financial system during the time of crisis; Providing long-term financing; Providing lower-cost financing
Issues: Currently, MDBs are dominated by developed Countries (WB by USA, IMF by EU and ADB by Japan); they impose conditionality in loans; there is a lack of Transparency and Accountability.