The G20 Expert Panel, led by N.K. Singh, Chairman of the 15th Finance Commission, has unveiled a set of 30 far-reaching recommendations that are poised to bring significant changes to multilateral development banks (MDBs). These recommendations are specifically designed to strengthen and modernise the operations of MDBs, and their potential impact is substantial.

Central bankers and finance ministers gathered in Marrakesh, Morocco, on the sidelines of the IMF-WB Annual Meetings, and amid a rise in geopolitical tensions, with a declared war the Middle East.

Singh expressed his concerns over how these developments might hit oil prices and urged the world to factor this into their economic strategies.

He stressed that the recommendations put forth by the commission are ambitious but necessary to navigate the current global landscape successfully.

"We've not only proposed ambitious recommendations but have also provided a credible financing plan to support these endeavours," Singh stated in an exclusive interview with CNBC-TV18.

The core focus of these recommendations revolves around capital mobilisation within MDBs. The report calls for a threefold increase in non-concessional lending by institutions like the World Bank and the IMF, with a target of $300 billion annually by 2030. It also advocates for a substantial boost in private capital mobilisation from the current $60 billion to an impressive $240 billion.

One of the key aspects discussed was optimising the existing balance sheets of MDBs, which, according to Singh, could provide a substantial financial cushion.

"First and foremost, we are harnessing and optimising the balance sheets of these multinational organisations. There's a huge leverage potential."

He went on to highlight the World Bank's growing prominence as the largest multilateral institution in the world.

Additionally, the report calls for a reimagining of policies, emphasising innovative financial strategies and a more active role for the private sector. Collaboration between various MDBs, such as the African and Asian Development Banks, is expected to play a crucial role in achieving these ambitious targets.

"We are emphasising policy priorities, innovative finance, using guarantees, changing operational models, making data available, encouraging private sector investment, and mitigating financial risks in the private sector," he said.

The report also addresses the pressing issue of debt sustainability. It recommends the creation of new guidelines for debt sustainability assessment in coordination with the International Monetary Fund (IMF). These guidelines are designed to mitigate the impact of global economic shocks, which is an urgent response to the growing concerns about global debt levels.

Singh highlighted the need for MDBs to work closely with the IMF in addressing these concerns and called for a renewed focus on sustainability. The recommendations are aimed at equipping countries with the tools to manage their debt effectively, with a strong emphasis on macroeconomic stability and resource optimisation.

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