IMF calls on G20 to lead by example and honour promise of USD 100 billion per year for climate f...

International Monetary Fund (IMF) Managing Director Kristalina Georgieva on Sunday called on the G20 members to lead by example and deliver on the promises of $100 billion per year for climate finance supported by strengthening the Multilateral Development Banks.

Speaking at the conclusion of the G20 Leaders’ Summit in New Delhi on Sunday, the IMF Chief said the global lender has secured over $40 billion to support vulnerable countries through its Resilience and Sustainability Trust (RST) to build climate resilience.

Georgieva emphasized that at the same time, countries also need to mobilize domestic resources to finance and manage the green transition through tax reforms, effective and efficient public spending, strong fiscal institutions, and deep local debt markets.

To help countries in this effort, the IMF is providing policy support and capacity development in collaboration with partners.

Noting that the nations are gradually recovering from a string of major shocks, Georgieva said the recovery is slow and uneven, with medium-term growth prospects being the weakest in decades in an environment of still elevated inflation, high interest rates, and growing fragmentation.

“The risk of further divergence is real, with richer countries being more resilient to shocks and vulnerable emerging and low-income countries contending with limited buffers,” she pointed out.

“Against this background, all countries should pursue sound policies to support economic and financial stability and growth-oriented structural reforms. This is especially important in emerging and developing countries, where such reforms can boost output by up to 8 percent over 4 years,” she said.

The IMF Chief called on the members to also strengthen the global financial safety net.

She noted that since the start of the pandemic, the IMF has injected $1 trillion in reserves and liquidity through lending to nearly 100 countries and the historic SDR allocation; and thanked the members who have helped the global lender to reach the goal of channeling $100 billion to vulnerable countries.

“To make the global economy stronger and more resilient in a more shock-prone world, it is vital to reach an agreement to increase the IMF’s quota resources before the end of the year and secure the needed resources for the Fund’s interest-free support to the poorest countries through the Poverty Reduction and Growth Trust,” Georgieva stressed.

Emphasizing the need to harness the potential of digital technology to build a prosperous future, the IMF Managing Director praised India’s achievement in developing top-tier digital public infrastructure (DPI) which she said stands as a beacon for others.

Georgieva also said “India’s G20 presidency is a powerful reminder that when the international community comes together to solve global problems, much can be accomplished.”

She said the IMF is playing its part, and enhancing cooperation with the World Bank in key areas and looking forward to “further strengthening the bonds of international cooperation to create a more prosperous and resilient global economy for all.”