NEW DELHI: Finance minister Nirmala Sithraman has called for views on actions needed to reform multilateral development banks (MDBs), and how the global south can collaborate better to raise the issue of debt distress faced by the low income countries.
She was addressing the finance ministers’ (virtual) session of the 3rd Voice of Global South Summit. Sitharaman said high debt service costs have constrained resource available for financing developmental needs, particularly in low income countries.
“It is critical that the financing requests made to MDBs are met with speed and agility. This will require reforms at operational levels as well as identifying new additional sources of finance,” the minister said.
She reiterated that dedicated concessional windows should be made available for middle income countries to address climate-related challenges on private capital mobilization.
“MDBs need to engage with credit trading agencies and explore how to better incentivise the flow of private capital or development financing,” said the finance minister.
Citing the World Bank’s June 2024 report, which states that by the end of this year, one in four developing economies will be poorer than they were before the pandemic, she highlighted that growth remains insufficient to drive progress in development and poverty reduction.