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Views from the Center

CGD experts offer ideas and analysis to improve international development policy. Also check out our Global Health blog and US Development Policy blog.

 

A photo illustration of a seesaw out of balance. Adobe Stock.

Mobilization: Much Less than Meets the Eye

Imagine the young George Washington said, “I cannot tell a lie. I did not cut down the cherry tree,” then added sotto voce, “’twas the hatchet that did it.” Multilateral development banks (MDBs) and development finance institutions are dissembling in the other direction when it comes to their impact—not unreasonably shifting blame but implausibly taking credit.

Various world currencies. Adobe Stock.

Can DFIs Be First Responders in a Crisis?

You might find this question odd. After all, since the outbreak of COVID-19, the development finance institutions DFIs have been busy announcing financial goals for crisis response, and offering reassurances of proactive stances. But it is important to recall at this moment that their financial models are not well suited for the purpose of crisis response. In this blog we explore their challenges and suggest how they can stretch and deploy their capital effectively at this moment of global crisis.

Stock photo of a pile of money getting larger. Adobe Stock

Mobilizing $400 Billion: Using the Visible Hand of Development Banks

Is the crisis a signal on how devastating the great problems confronting our future could be in a world that is not prepared for them, in particular to face challenges such as major inequalities, the climate emergency, and the loss of nature. The way in which our world produces and consumes, calls for a recovery that would also imply a structural transformation towards a more inclusive and sustainable economic model. DBs could be a great contributor to such a transformation.

Stacks of US dollars. Adobe Stock

More Than $1 Trillion in MDB Firepower Exists as We Approach a COVID-19 “Break the Glass” Moment

In retrospect, the scale up in MDB financing during the 2008-2010 crisis, though significant, now looks conservative as we consider the potential scale of damage from the current COVID-19 pandemic. To put the question bluntly, if the human and economic devastation follows a worst-case scenario, just how much could the MDBs do to respond? We attempt to answer that question by assessing the legal, rather than prudential, constraints on MDB lending.

An aerial view of Dhaka, Bangladesh. Photo by Dominic Chavez / World Bank

“Spend What It Takes” to Respond to COVID-19 in Poor Countries, Too

It is now only a question of when, not if, the COVID-19 pandemic will exact its human and economic toll on the poor and developing countries of South Asia, Africa, and Latin America the way it is already ravaging East Asia, Europe, and North America. And when it does, they too will need to respond with exceptional heath and financial measures in the face of this unprecedented global challenge.

A worker at a power station in Kabul. Photo by Graham Crouch, World Bank

5 Principles on the Uses and Misuses of Debt Relief to Address the Coronavirus Pandemic

Debt relief for low-income countries is on the table of measures to consider for coronavirus response. The imperative right now is to get cash to LICs as quickly as possible. Suspending some debt service payments may be a good first step in freeing up some budget space for new spending. Beyond that, protracted debt-relief negotiations with multilateral and commercial creditors right now could be a distraction at best but could also actively undermine the ability of institutions like the World Bank to offer new financing for crisis response.

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