world-bank-needs-to-reinvent-restructure-itself-attract-private-capital-n-k-singh

The World Bank needs to reinvent and restructure itself so as to become 'better, bolder and bigger' and harness private capital on the strength of its own balance sheet, said N K Singh, Co-Convenor, Expert Group on MDB Reforms.

 

The World Bank should also look at the possibility of tapping pension funds to increase its capital base and its capacity to fund development projects in developing nations.

 

"Bretton Woods was the first one, it certainly needs to be reinvented, restructured and recreated. But there is no substitute for multilateral cooperation. and that's why better, bolder and bigger," Singh said at a panel discussion at the Raisina Dialogue, 2024.

 

A high-level expert group, led by N K Singh and former US Treasury Secretary Larry Summers, was set up by the G20 under India's presidency.

In its report, the group had proposed a 30-point roadmap to reform Multilateral Development Banks (MDBs) and triple their lending by 2030, which includes attracting private investors and introducing pooled portfolio guarantees.

 

Currently, there are 17 MDBs, including Asian Development Bank, African Development Bank, European Bank for Reconstruction and Development and Inter-American Development Bank.

 

Bretton Woods institutions, including the World Bank and IMF, were set up for funding reconstruction activities post World War II.

The expert group had said that MDBs would need USD 3 trillion each year between now and 2030. Of this, USD 2 trillion can come from domestic resource mobilisation.

 

Out of the balance of USD 1 trillion, USD 500 billion could come from the private sector and USD 500 billion could come through official development financing.

 

Addressing the discussion, titled 'Democratic Dollars: Can the Planet Reclaim the Bretton Wood', Singh said the money has to come from shareholders, as well as the private sector.

 

However, the World Bank's track record to be able to use its balance sheet to harness private capital has been disappointing, Singh said.

"I would say if the World Bank needs recapitalisation, shareholders have to put in more money, but equally the World Bank needs to harness its ability to attract private capital and improve on its record," he added.