2023’s resolutions for a reform of development finance
2022 ended up on a consensus that the global financial architecture is no longer “fit for purpose”. In other words, the financial ecosystem created post-war to support international development – at the centre of which are the IMF and the World Bank who were joined later by other international public financial institutions – wasn’t designed to address the multiplicity of challenges the world is facing today, foremost among which climate change. Time is running, and the good news is that 2023 is set up to be a busy year with key events setting the milestones for a reform of the international financial architecture, including a Paris Summit in June. The year will close at COP 28, where we will officially take stock of current achievements.
As we prepare to face hard evidence that too little is being done too slowly, let’s use the positive spirit of January to outline what we would like to see in the next chapter. Deep and concrete changes are what we hope to look back on this time next year and, as explained by Alice Pauthier in her blogpost, two areas of work appear particularly critical for a successful reform. First, the new international financial system should be driven at country level, by the thorough identification of financing needs for sustainable development. Second, the focus of attention should not only be on the volumes of development finance: we should allow more consideration to its real impact on the transition of economies.
At I4CE, we have been and will be dedicating our efforts to contributing to these priorities: on the financial end, by supporting the debate on how to maximise the impact of public development banks; and on the economic end, by developing methodologies and tools to help countries assess their financing needs and pilot the transition. You’ll find out some more about these activities going through our newsletter.