FINANCE Secretary Ralph Recto has championed four key reforms to empower the International Monetary Fund (IMF) and the World Bank Group (WBG) to better serve developing countries.
According to a statement from the Department of Finance (DOF), Recto, who is also current chair of the Intergovernmental Group of Twenty-Four (G-24) Board of Governors, continued to call for a more agile and resolute IMF and World Bank, during this year’s high-level meeting of ministers and governors in Washington, D.C.
“We need you to not only keep pace with the changing times but also lead with foresight and innovation. We need heightened development cooperation, scale-up support and more responsive solutions to navigate the headwinds and foster peace, stability and prosperity for all,” Recto said during the meeting held on October 22 at the IMF headquarters.
“Today is an extremely different world. Financial interconnectedness, digital disruption, widening inequality, climate change and geopolitical tensions are reshaping the global order. Any slowdown in the global economy because of these uncertainties and new economic realities is bound to hit developing countries the hardest,” he added.
Among the reforms championed by the finance chief, on behalf of the G-24 members, was the necessity for the IMF to create a new liquidity provision mechanism to further support countries with sound fundamentals in times of liquidity crises.
Second, to meet its mission of eradicating poverty on a livable planet, the WBG was urged to set more ambitious goals for its concessional and non-concessional windows, commensurate with the challenges of achieving inclusive and sustainable development by 2030.
Third, the Sovereign Debt Resolution Framework must be reformed to deliver comprehensive, predictable, swift and impactful debt relief, addressing the urgent needs of vulnerable economies.
Lastly, governance and institutional reforms of the Bretton Woods System must be accelerated to increase the voice and representation of developing nations.
“Without improvements and bold actions, decades of individual and global efforts to eradicate poverty and inequality, combat climate change and invest in growth-enhancing projects will be put to a halt, if not reversed. Thus, we are counting on this meeting to set an unprecedented multilateral cooperation and action,” Recto said.
In response to these recommendations, IMF managing director Kristalina Georgieva and WBG senior managing director Axel van Trotsenburg both shared the institutions’ respective programs aimed at providing wider access to concessional financing and supporting developing countries in sustaining productivity, enhancing long-term growth prospects and increasing resilience to economic shocks.
