G20 FMCBG meeting at Marrakesh: All eyes on MDB reform road map

The fourth meeting of finance ministers and central bank governors (FMCBG) under India’s G20 presidency is all set to take off on October 12 and 13 in Marrakesh with two key agenda items to watch out for. 

These include the final volume of reforms for multilateral development banks (MDBs) and the road map for crypto assets regulations. Having iro­ned out issues over language around the Russia-Ukraine war, another highlight of the final meeting of FMCBG could also be the first communique of this group under India’s presidency instead of a chair statement. 

Experts feel the members could either endorse the report on MDB reforms or agree to take more time for consideration. In case of the latter, the agenda would then pass on to the Braz­ilian presidency of the G20. The FMCBG is expected to discuss in their meeting the road map that will support a coordinated and comprehensive policy and regulatory framework for crypto assets. 

In the run up to Marrakesh, Finance Minister Nirmala Sitharaman chaired a meeting with the heads of multilateral development banks and the co-conveners of the G20 independent expert group for strengthening MDBs — N K Singh and Lawr­ence Summers — on Friday.  The second volume of the group’s report would get into the details such as finance modalities, specific me­ch­an­isms to support the fun­damental goal of tripling lending by 2030.  

“We need for these institutions to become not just bigger but also bolder and better. We need to move on the 21st century time table if they are to meet the challenges,” Summers,  former US treasury secretary, had earlier told Business Standard. 

Countries are yet to agree to the capital infusion required for MDBs. The New Delhi leaders’ declaration had said: “We appreciate the efforts of the G20 Independent Expert Group on Strengthening MDBs in preparing Volume 1 of the Report and look forward to its examination in conjunction with Volume 2 expected in October 2023.” The FMCBG is coming ahead of the virtual G20 summit, to be held in November, for taking stock of the progress made under India’s presidency. “Depen­d­ing on the discussions, this could be a concrete outcome of India’s G20 presidency in terms of a framework for  MDBs,” said former finance se­cr­etary Ashok Lav­asa, who was also vice-president, Asian Dev­el­o­pment Bank, till recently.   

On crypto assets, Lavasa said it may not be a major priority as there are several issues related to it that require acceptance. 

“Most of the leaders believe specific decisions by any MDB should be taken by their boards. Countries have to come on board about capital infusion. It is most likely that they would seek more time,” said Subhash Garg, former finance secretary.

The meeting will be held on the sidelines of the International Monetary Fund and World Bank annual meeting. Ahead of the FMCBG, the G-24 Ministers, Central Bank Governors, and their deputies meetings would also follow the theme of ‘Strengthening Multilateral Development Banks to Address the Global Challenges of the 21st Century’.