The IMF and World Bank issued a joint statement, vowing to enhance cooperation in addressing climate change, debt vulnerabilities, and digital transitions. Released ahead of the G20 leaders summit in India, the statement affirms that these institutions, with their broad membership and specialized knowledge, are well-positioned to make significant contributions to addressing global economic challenges, including climate disasters, slowing growth, and geopolitical fragmentation. IMF Managing Director Kristalina Georgieva and World Bank President Ajay Banga conveyed this message in their united statement.
Established in 1944 during a gathering in Bretton Woods, New Hampshire, the IMF and World Bank have a longstanding history of global financial influence. Ajay Banga, who assumed the World Bank presidency in June, is scheduled to attend his first G20 summit. His mandate encompasses not only the institution’s traditional anti-poverty efforts but also expanding resources to address climate change, pandemics, fragility, and other global crises.
During the G20 summit, US President Joe Biden intends to focus on reforming multilateral development lenders like the World Bank to increase their lending capacity for climate and infrastructure projects. The US regards these institutions as critical counterbalances to China’s global lending activities.
In their joint statement, the IMF and World Bank unveiled plans to establish a more structured and institutionalized collaboration on climate change. This includes formalizing regular bi-monthly meetings of the Bank-Fund Climate Advisory Group, focusing on climate-related aspects of key projects, including loans from the IMF’s Resilience and Sustainability Trust, aimed at providing financing for climate resilience and transition projects in middle-income countries.
Furthermore, the two organizations pledged to incorporate climate considerations into their efforts concerning debt sustainability in low-income nations. They have maintained a close collaboration on debt sustainability, advocating for enhanced restructuring frameworks. In the previous year, they initiated a sovereign debt roundtable to streamline restructuring concepts and expedite debt resolutions. Georgieva and Banga emphasized their commitment to strengthening debt management, transparency, and public finances to prevent further debt vulnerabilities and provide increased support to both creditors and debtors involved in debt restructurings.
Regarding the digital transition, the IMF and World Bank announced their partnership to facilitate citizens’ access to online services and remove obstacles to digital inclusion. They expressed their commitment to intensify joint efforts in enhancing countries’ revenue collection and expenditure systems to leverage the advantages of digital technologies while mitigating associated risks. This includes improvements to cross-border payment systems to promote growth, poverty reduction, and job creation.
