Raisina Dialogue 2023: India Has Been Talking About How Multilateral Institutions Need Reform, Says Finance Minister Nirmala Sitharaman

New Delhi, March 4: Finance Minister Nirmala Sitharaman said on Saturday that India has been talking about reforms in multilateral institutions and an expert panel has been formed on how multilateral development institutions should respond to 21st Century challenges.

Speaking at the Raisina Dialogue here, Sitharaman said an expert panel has been proposed during India's G20 Presidency as part of efforts to make the multilateral developmental institutions, which includes the World Bank, ready for challenges of this century. Raisina Dialogue 2023: PM Narendra Modi, Italian Counterpart Giorgia Meloni Inaugurate India’s Flagship Conference on Geopolitics and Geoeconomics.

She said India is putting across voice of the Global South at G20. "India has been talking about how multilateral institutions need reform. We have an expert panel on how multilateral development institutions should respond to 21st century challenges," she said. Raisina Dialogue 2023: Foreign Ministers of Bhutan, Croatia, Maldives, Sri Lanka and Sweden Reach Delhi To Participate in Eighth Edition of Raisina Dialogue.

The Chair Summary and Outcome Document of the G20 Finance Ministers and Central Bank Governors (FMCBG) meeting held in Begaluru last month said that multilateral Development Banks (MDBs) play a key role in development financing and G20 countries recognise the need for MDBs to evolve given the scope and complexity of trans-boundary challenges and for catalysing private investment.

The G20 Finance Ministers said they will work to strengthen MDBs and take note of the World Bank's roadmap for evolving the Bank's mission, operational approach, and financial capacity within their country engagement model. They called upon other MDBs to report on their efforts to address similar challenges.

"We look forward to receiving the report of the Expert Group proposed by the G20 Indian Presidency for deliberations on this issue in our third meeting in 2023," the Outcome Document said.

"Taking forward the mandate given by the G20 Leaders in Bali, we task the International Financial Architecture Working Group to work with the MDBs to develop a G20 Roadmap, for implementing the recommendations of the G20 Independent Review of MDBs Capital Adequacy Frameworks (CAF) based on updates from MDBs in Spring 2023. We look forward to receiving the roadmap in our third meeting in 2023," the Outcome Document said.

The G20 Finance Ministers urged MDBs to increase their efforts to discuss and propose options for implementing the recommendations within their own governance framework while safeguarding their long-term financial sustainability, robust credit ratings and preferred creditor status.

In her remarks at the Raisina Dialogue, the Finance Minister said that multilateral institutions should have skills to raise money from the market to have enough money in their pool.

"They are 20th-century products and for them to leverage to their maximum levels, they should be ready for 21st-century challenges and should have the skills to raise money from the markets so that they have enough money in their pool...It is one of the constant points which Prime Minister Narendra Modi had been speaking of," she said.

She also mentioned that there was complete unanimity that the members need to deal with stress issues of the countries. Sitharaman also spoke about the government's response to COVID-19 pandemic.

"At every level beginning from Prime Minister to the secretaries in the ministries, we were constantly in contact with people who would give inputs on how to respond to the development of the situation. This is one of the obvious points which I can refer, as to why the way we responded to the pandemic," she said.

"The way we responded to the necessity for sustaining growth have all been worked out like this. These are our responses that have worked out to be more purpose-serving," she added. Answering a query, she said states are also seeking higher investment and faster growth.

"I won't get into the argument on whether the Centre or the states are doing more. States are also getting into a race." They have been saying: 'Is our state attractive enough or alluring enough for investments to come and invest'?" she said.

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