...Calls for Greater Voice for Developing Nations
...Seeks Cheaper, Larger Funding
The Group of 24 (G-24) has called for significant reforms to the International Monetary Fund (IMF) and the World Bank, emphasizing the need for these institutions to become more responsive to the needs of developing and emerging economies.
The demand was made during the ongoing IMF/World Bank Annual Meetings in Washington DC, where Mr. Ralph Recto, Secretary of Finance for the Philippines and Chairman of G-24, presented the group's position.
"We call for a more agile IMF and World Bank. The institutions need to be faster in responding to the rapidly changing and increasingly volatile global economic environment," Recto said. He was joined by First Vice-Chair Luis Caputo, Argentina's Minister of Treasury, and Second Vice-Chair Wale Edun, Nigeria's Minister of Finance and Coordinating Minister of the Economy.
The G-24 outlined four key reforms to enhance the effectiveness of the Bretton Woods institutions. Among these, the IMF was urged to create mechanisms that would better support countries with sound economic policies but experiencing short-term liquidity crises.
The World Bank, on the other hand, was asked to take a more ambitious approach to both concessional and non-concessional funding windows, reflecting the need to achieve inclusive and sustainable development by 2030.
Another pressing issue for the G-24 was the need to reform the Sovereign Debt Resolution system, ensuring that it delivers swift, sustainable, and comprehensive debt relief for member countries. Additionally, the group called for increased representation and voice for developing nations in both the IMF and World Bank.
The G-24 welcomed the inclusion of new challenges, such as climate-related risks and public debt, in the Low-Income Countries Debt Sustainability Framework (LIC-DSF). The recent approval for the use of Special Drawing Rights (SDRs) to acquire hybrid capital instruments was also commended, with the group noting that this could increase lending capacity fourfold.
Increasing Africa's Voice
The G-24 supported the approval of a third chair for Sub-Saharan Africa at the IMF Executive Board, noting that it would enhance the region's voice and reduce the workload on African officials. The group also recommended governance reforms within multilateral development banks (MDBs) and international financial institutions (IFIs) to address regional and gender underrepresentation in senior management.
Concerns Over Global Uncertainties
The G-24 expressed concern over the ongoing humanitarian crises and conflicts worldwide, urging a multilateral approach to restore peace and stability. The group also highlighted the risks and uncertainties that persist in emerging markets and developing economies (EMDEs), despite forecasts of global economic stabilization in 2024 and 2025.
Geopolitical tensions, trade fragmentation, and extreme weather events could pose significant headwinds to global growth, with inflationary pressures remaining a concern for many EMDEs. As some advanced economies ease inflation, many EMDEs continue to face high inflation rates, currency depreciation, and rising debt-servicing costs, which are straining fiscal space and growth.
IMF's Role in Economic Stability
The G-24 emphasized that the IMF should be prepared to strengthen the global financial safety net, offering timely and adequate liquidity support to countries facing balance of payments difficulties. The group also called for more substantial financial support from both the IMF and World Bank to help countries facing short-term liquidity issues but with sustainable debt.
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The G-24 reaffirmed the importance of accelerating climate action while recognizing the varying national circumstances and the principle of common but differentiated responsibilities.
Protecting Multilateralism
In closing, the G-24 voiced concerns over rising protectionism and nationalist policies in major economies, calling for a recommitment to a rules-based, non-discriminatory, and transparent multilateral trading system under the World Trade Organization. "We encourage countries to contribute to the strengthening of multilateralism through ongoing initiatives," the group concluded.
