US Treasury Secy Janet Yellen calls for expansion of multilateral development banks to unlock USD 200 bn over next decade

Gandhinagar (Gujrat) [India], July 16 :  US Treasury Secretary Janet Yellen stressed the significance of expanding the capacity and balance sheet of multilateral development banks (MDBs) as a crucial step towards global economic advancement.
"As part of our evolution agenda, we estimate that the MDBs as a system could unlock USD 200 billion over the next decade just from the measures already being implemented or under deliberation," said Yellen at a press conference in Gandhinagar, Gujarat. 
Secretary Yellen's call to action, first announced in October of the previous year, aims to build on success stories and unlock the potential of the MDB system.
Janet Yellen revealed that steps have already been taken and are under consideration to realize the goal of unlocking an impressive USD 200 billion over the next decade.
"There is potential for even more if the MDBs undertake some of the longer-term and more complex recommendations in the G20 Capital Adequacy Framework report. This is USD 200 billion more in funding that we can use to advance key global priorities: spurring economic growth and reducing poverty, fighting climate change, and promoting human development," said Yellen.
This substantial financial injection would provide much-needed resources for development projects and initiatives worldwide.
Yellen's focus was on debt distress in emerging markets and developing countries, multilateral development bank evolution.
Speaking on alleviating debt distress that can stimulate growth and development – and restore stability in emerging markets and developing countries, she said, "Today, over half of all low-income countries are near or in debt distress. This is double the share of countries in this situation in 2015. The economic case for decisive action is clear. When countries find themselves in debt distress, it is hard for them to fund or attract important public and private investments. Without these investments, their macroeconomic foundations deteriorate, making the initial debt problem even worse."
Restoring debt sustainability can help unlock the massive economic potential of developing nations. It can help them regain lost growth and development and enable them to make investments to address challenges.
"I look forward to working with my counterparts to support macroeconomic stability and growth around the world. The International Monetary Fund plays a critical role through policy guidance. It also plays an important role in providing concessional financing to the world’s poorest countries to support reform efforts. The IMF’s Poverty Reduction and Growth Trust – the PRGT – is a key facility that currently provides zero-interest rate loans to the poorest countries," she said.
Yellen also expressed enthusiasm over new World Bank president Ajay Banga's ability to drive the agenda forward.
"Over the past few months, our broad coalition has worked with the World Bank management to make significant changes. For example, the World Bank updates its mission statement and refreshes its operating model," said Yellen.
Secretary Yellen also expressed her enthusiasm regarding the appointment of Ajay Banga as the new president of the World Bank, praising his leadership and vision. She emphasized her confidence that Banga possesses the necessary qualities to effectively deliver on the proposed agenda.
"And we are working with the World Bank and the regional development banks to implement measures that will more efficiently leverage the resources they have. Our reforms to the World Bank’s balance sheet will responsibly unlock as much as USD 50 billion in additional lending capacity over the next decade," said Yellen. 
The expansion of MDBs holds immense potential in addressing pressing global challenges, including poverty alleviation, climate change, and infrastructure development. These institutions are vital in providing financial resources and technical expertise to support sustainable projects and programs across various countries.
Yellen's call to action gains momentum and the global community anticipates the MDB system's enhanced ability to drive economic progress and foster inclusive growth.
The USD 200 billion potential unlocking, combined with Banga's leadership at the World Bank, sets an optimistic outlook for the future of international collaboration in pursuit of a more prosperous and sustainable world.
The US Treasury Secretary's dedication to expanding the MDB system reaffirms the importance of multilateral cooperation in tackling the world's most pressing economic challenges. With continued efforts and the right leadership in place, the global community remains hopeful for a future marked by inclusive growth.