Current Affairs: Passage of the Day - 18 April 2024 | Current Affairs & General Knowledge - CLAT PDF Download

Directions: Read the passage carefully and answer the questions that follow.
The G20 expert group on strengthening multilateral development banks (MDBs) has presented a 30-point roadmap for "bigger, bolder, better" versions of them. The panel wants these institutions to shift from an approach of individual projects and prioritise programmes identified by national governments with sectoral focus and long-term transformation plans." Governments have the primary responsibility for ensuring that the enabling conditions for private investment are sound, transparent and stable over the horizon of investors.
They must also help address multiple coordination failures among domestic and international stakeholders, public and private, to unlock and scale up investment for urgent priorities such as rapid energy transition, building resilience to climate change, tackling fragility, and closing major gaps in reaching the SDGs," said the report.
In the second part of its report, the panel, co-convened by former US Treasury Secretary Larry Summers and India's 15th Finance Commission Chairman NK Singh, proposed that Multilateral Development Banks (MDBs) should prioritise assisting countries in establishing and implementing "country platforms." These platforms are voluntary mechanisms established by respective governments to encourage collaboration among development partners, based on a common strategic vision and shared priorities.
In the initial volume of the report presented at the July meeting of G20 finance ministers and central bank governors, the expert group outlined a threefold agenda for reforming MDBs. This included tripling annual sustainable lending levels to $390 billion by 2030, adopting a triple mandate to eradicate extreme poverty, promote shared prosperity, and contribute to global public goods, as well as expanding and modernizing funding models to attract a wider range of investors through flexible and innovative means.
In the Delhi Declaration, the G20 Leaders recognised a need for a “big push on investments” to deliver on national development priorities, to respond to global challenges and to meet agreed international objectives.
"MDBs must reduce processing time by half across the first stages of the project cycle. MDBs should release their baseline processing time from concept note to first disbursement publicly, commit to reducing this time by 50% and report updated and comparable figures each year. There are a number of measures that help MDBs achieve this goal without jeopardising the rationale of why these processes were set up in the first place," the report said.
The high-level G20 panel moots trebling lending limits of multilateral banks by 2030, which includes attracting private investors and introducing pooled portfolio guarantees.
"Country platforms are a natural entry point for MDBs to work together better as a system, but their collaboration should be deepened in a number of areas, particularly around global and regional priorities. MDB collaboration has long been held back by lack of incentives and conflicting requirements from shareholders.
This culture can best be reformed through institutional mechanisms of dialogue and joint strategy formulation by leadership teams at the highest level. Going forward, the ambitions set out for the MDB system will be much harder to achieve without collaboration to exploit potential synergies, cost savings and efficiency gains for their clients. Some early wins can come from the use of shared diagnostic tools, mutual recognition of standards and setting up shared co-financing and project preparation platforms," the report added.
[Excerpt from Business Today “How to have ‘bigger, bolder, better’ MDBs? G20 expert panel presents roadmap” Dated 25/11/23]
Q1: What is the primary mission of Multilateral Development Banks (MDBs)?
(a) Military support
(b) Cultural exchange programs
(c) Financial support and technical assistance for development projects
(d) Political mediation

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Q2: Which countries typically contribute to the lending pool of MDBs?
(a) Developing nations
(b) Developed countries
(c) Island nations
(d) Landlocked countries

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Q3: What has driven the G20 expert panel to call for reforms within MDBs?
(a) Technological advancements
(b) Climate crisis
(c) Political instability
(d) Economic recessions

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Q4: What is the funding target MDBs must meet by 2030?
(a) $100 billion
(b) $390 billion
(c) $500 billion
(d) $250 billion

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Q5: Which bank has committed $97.6 billion to India?
(a) Asian Development Bank
(b) World Bank
(c) European Investment Bank
(d) Asian Infrastructure Investment Bank

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Q6: What sectors have MDBs significantly invested in within India?
(a) Sports and entertainment
(b) Public administration, agriculture, and transportation
(c) Military and defense
(d) Tourism and hospitality

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Q7: What role does the panel suggest for the private sector in MDB operations?
(a) Decrease its involvement
(b) Limit to advisory roles
(c) Increase engagement and financing
(d) Focus only on high-profit projects

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Q8: What is the perceived challenge in MDB engagement with the private sector?
(a) Language barriers
(b) Bureaucratic and risk-averse nature
(c) Lack of technological resources
(d) Geopolitical conflicts

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