FERDI's 10 proposals in the lead up to the Summit for a New Global Financing Pact
June 07, 2023
The Paris Peace Forum convened several significant stakeholders in global governance. Maintaining the event's theme of "Building together in a world of rivalry", it united officials from governments, international financial institutions and distinguished experts of international acclaim.
In addition to acknowledging the importance and scarcity of concessional resources for development, this high-level roundtable aimed to explore strategies for maximising their impact, particularly through analysis of the criteria governing their allocation and selection of the most suitable international framework. This discussion takes place in the context of the recently held Annual Meetings of the IMF and the World Bank, as well as anticipated announcements during the upcoming COP28 and launch of IDA resource replenishment.
For Patrick Guillaumont, this discussion highlighted the need to adjust the criteria for dispensing concessional resources in accordance with the particular aim: development and the advancement of global public goods, two interrelated yet separate objectives. Regarding development, income alone should not be the sole determinant for qualifying for concessional funding. It should be enhanced by considering the countries' structural vulnerability, which can be measured by a multidimensional index for multisectoral funds or a more specific index, particularly in the allocation of funds for climate change adaptation.
To ensure consistent allocation of concessional financing for development, Patrick Guillaumont recommends that multilateral development banks reach an agreement on a common allocation framework. This framework should be based on income, performance, and structural vulnerability, with each bank introducing specificities according to their own assessments of each criterion.
