2017 Mitchell Oration: multilateral challenges
This is an edited extract from the 2017 Mitchell Oration “Development: towards 21st century approaches” by Dr Ngozi Okonjo-Iweala.
Multilateral development banks (MDBs) face four challenges they will need to confront if they are to be fit for purpose in helping the world deliver on critical development problems and on the Sustainable Development Goals (SDGs). These are the challenges of relevance, legitimacy, scale and urgency, and business model.
Beginning with the first challenge: relevance. When most MDBs were first set up they played a central role in funding development. Whilst they are still important in this role, today they have competition. The balance sheet of some national development banks and their lending have in some years surpassed that of the MDBs combined. In 2011, for example, whilst the World Bank Group, African Development Bank, Asian Development Bank, European Bank for Reconstruction and Development (EBRD) and the Inter-American Development Bank (IADB) committed a total of US$110.8 billion in lending, the Brazilian Development Bank alone lent US$103 billion whilst the figure for the China Development Bank was about US$163 billion. We also now have other significant flows such as remittances totalling over US$400 billion a year to developing and emerging market countries, while the trillions of dollars of liquidity in the international financial markets and the increasing access of more and more developing countries to this, may lead some to question the relevance of the MDBs. This was certainly the position of the Meltzer Commission set up by the United States Congress in 1998 to look at the function of the MDBs, and remains the position of an important segment of the US establishment today. And it is not only in financing that competition that the question of relevance comes up for the MDBs. It comes even in knowledge transfer …read more