Strengthening Multilateral Developemtal Banks (MDBs)

Question 1

Q. What are MDBs ?

Answer 1

Ans : MDBs are supranational institutions set up by sovereign states, which are their shareholders.
E.g. WB, ADB, NDB, AIIB etc.

Question 2

Q. What is the significance of MDB’s ?

Answer 2

Ans : 1. International pillar to stabilise the global economy: Provided $222 billion during the 2008 Financial Crisis.
2. Promote growth in developing and under developed countries .
3. Provide low-cost, long maturity financing .

Question 3

Q. What are some of the issues with MDBs ?

Answer 3

Ans : 1. Structural issues with MDBs : outdated framework, regional focus, insufficient competition and coordination, increasing demand for Development Finance.
2. New cross border challenges : such as climate change, pandemics, fragility, migration etc.
3. Debate on the focus of MDBs.
4. China’s role in new MDBs : rising stature of NDB and AIIB.
5. Concerns of Global South.

Question 4

Q. What are some potential benefits of MDBs to India ?

Answer 4

Ans : 1. Access to more development finance.
2. Quicker approvals for projects .
3. Strengthening Global Standing via MDBs.
4. Technology and innovation support.

Question 5

Q. What are some recommendations to strengthen MDBs ?

Answer 5

Ans : 1. Change in Vision Document of each MDBs.
2. Increase the scale of Financing .
3. New flexible legal and institutional mechanisms .
4. Necessary supporting activities outside the MDB system.
5. Transformation in operational and financial business models.