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MDBs provide funding for global development
According to Reuters, leaders of the Multilateral Development Bank has committed to action in five key areas including: Education, health, infrastructure, rural development, and other industries with growth potential.
The multilateral development banks have agreed to provide a total of $300-400 billion in additional loans. This commitment comes amid growing calls from international organizations to increase funding for developing countries, especially those facing greater challenges due to the impacts of climate change and rising global interest rates.
Developing countries often face resource constraints and the impacts of climate change that pose numerous environmental hazards. This requires sustainable development measures and strong financial support from the international community.
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| A man takes a photo of the exchange rate in front of a money changer in Cairo, Egypt. (Photo: Reuters) |
In addition, when global interest rates rise, developing countries often find it difficult to service their debts and maintain financial stability. Therefore, increasing funding and providing additional lending balances from multilateral development organizations is an important measure to support developing countries to overcome difficulties.
“Through cooperation, we can create value at scale, helping to improve the quality of life for millions of people and contributing to global sustainable development. These efforts have expanded the scope of support, bringing greater benefits to the international community,” said Ilan Goldfajn, President of the Inter-American Development Bank (IDB) .
Synchronize systems for effective support
Following the conclusion of the spring meetings of the International Monetary Fund (IMF) and the World Bank at the headquarters of the Inter-American Development Bank (IDB) in Washington, the Multilateral Development Banks (MDBs) agreed to develop synchronous standard policies and common procedures to ensure efficiency and transparency in system development activities.
This system includes leading international financial institutions: World Bank Group, New Development Bank, Asian Infrastructure Investment Bank (AIIB), European Investment Bank (EIB) and African Development Bank (African Development Bank) aiming to promote consensus power to solve economic challenges in complex social contexts.
The Inter-American Development Bank also announced that it will strengthen its financial capacity by providing innovative financial instruments and promoting the transfer of the International Monetary Fund's Special Drawing Rights (SDRs) through the Multilateral Development Bank.
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| Inter-American Development Bank (IDB) headquarters in Washington, USA. (Photo: Reuters) |
Innovative financial instruments include innovative financing methods such as social bonds, social investment funds, or other innovative financing mechanisms to attract capital from different investors and enhance the financial capacity of the Inter-American Development Bank.
At the same time, promoting the transfer of Special Drawing Rights through the Multilateral Development Bank to create a new financial resource for development projects and programs, helping to provide capital to countries in difficulty more effectively. These efforts can help the Inter-American Development Bank and other international financial institutions strengthen their financial resources and expand the scope of development activities.
In addition, the Multilateral Development Bank has also committed to step up action on climate change, which is an important and positive step in responding to the global climate challenge.
The organization has introduced a common approach to measuring climate outcomes in adaptation and climate finance reporting to ensure that development projects and programs meet climate change criteria and targets. At the same time, climate finance reporting also helps increase transparency and accountability in financial resource management.
By implementing the plan, the Multilateral Development Bank can make a powerful contribution to mitigating the impacts of climate change to protect the environment and public health, while also creating new opportunities for sustainable development and global prosperity.
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