US wants progress on reforms before hike in capital of development banks

economictimes.indiatimes.com:

multilateral development banks (MDBs) should be explored only after making further progress on reforms in the areas of their vision, incentive structures, operational approaches and financial capacity. Treasury secretary Janet Yellen also said the US is working with India to develop ways to lower the cost of capital and increase private investment to fast track its energy transition.

Yellen stressed on the immediate need to boost the World Bank's concessional lending capacity so as to make it stronger to face global challenges and support low-income countries. «We estimate that the MDBs as a system could unlock $200 billion over the next decade just from the measures already being implemented or under deliberation as part of this process,» Yellen said in a statement after a meeting with Indian finance minister Nirmala Sitharaman.

«The recently released G20 MDB Experts Group report is one recent useful input to this work, though we must only explore capital increases after the reforms in these areas have progressed further,» she said. Yellen said the world is looking to the G20 to make progress on key challenges like climate change and pandemics to strengthen the global economy and to support developing countries, welcoming India's leadership on the issues.

«I appreciate India's demonstrated leadership on debt issues as G20 president, including your support for G20 efforts to improve the multilateral debt restructuring process,» she said, also acknowledging India's efforts on advancing the evolution of the MDBs. Relations with India The two countries are collaborating on a range of economic issues, including commercial and technological collaboration, strengthening supply chains and catalysing the clean energy transition.