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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.

 

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.

A pile of money, giftwrapped. Adobe Stock.

Development Finance Institutions Should Be Instruments of Public Policy, Not Private Gain

The World Bank Group has some very clear (and very good) guidelines about what makes for a successful public-private partnership where governments contract service provision like energy supply or education from private firms. Sadly, the bank has been ignoring that rule recently. And that is a sign of a broader problem in donor-backed financing of public-private partnership deals.

Chart showing falling US pledges to IDA and rising Chinese pledges to IDA

The US and China Have Very Different Takes on IDA and the Global Fund: Why that Matters for the Future of Multilateral Aid

When it comes to the United States, the reality is that the Global Fund is winning the fundraising game hands down. China, meanwhile, doubled its contribution to IDA—contrast that with the country’s longstanding indifference to the Global Fund. Clearly the world’s most important emerging donor views the multilateral architecture differently than the world’s most important traditional donor does.

The World Bank Group's headquarters

Congress Spotlights the World Bank’s Private Sector Subsidies

Yesterday, the House Committee on Financial Services held a hearing with US Secretary of the Treasury Stephen Mnuchin on the international financial system. Chairwoman Maxine Waters opened the session with a strong statement on the World Bank’s $2.5 billion IDA Private Sector Window (PSW). Chairwoman Waters raises important concerns with the Private Sector Window that should be urgently addressed.

question-mark

Answering the World Bank’s $75 Billion Question

Next week in Zambia, donors to the World Bank’s financing window for low-income countries, the International Development Association (IDA), meet to discuss IDA’s future. This “mid-term review” is both a stocktaking session and a teeing up of the next round of fundraising for the world’s largest concessional lending fund. Formal negotiations will commence next year, but the meetings in Zambia set the scene for those negotiations.

Two stacked bar graphs, one with the total assets of the IDFC members (totaling 3.7 billion) and the other with the MDBs (totalling 1.5 billion).

Rising to the SDG Challenge: The Unique Contribution of the International Development Finance Club

The IDFC represents a unique mix of bilateral agencies, national development banks, and regional development banks. As such, it holds promise for bringing new and productive collaborations to the SDG agenda that extend well beyond the work of the major multilateral development institutions. In a new brief, our efforts to map the scale and scope of IDFC members’ development financing through a membership survey and public databases provide some interesting takeaways:

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