Egypt Urges Development Banks to Facilitate Financial Innovation

Egypt's Minister of International Cooperation and Governor of Egypt at the World Bank Group (WBG) Rania A. Al-Mashat urged multilateral development banks to play a greater role in facilitating financing for developing countries through innovative tools.

The meeting featured appearances by Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), and David Malpass, President of the World Bank Group (WBG), and members of the G-24 from Africa, Asia and Latin America and representatives of the IMF and WBG.

In her speech at the G-24 Ministers and Governors Meeting,  Al-Mashat said that the world is going through a very critical juncture with an ongoing pandemic and a cascade of evolving shocks on the back of the war in Europe and the unfolding geopolitical tensions. 

The Egyptian Minister pointed out that growing macro uncertainty, the repercussions on the flow of trade, the increase in food and fuel prices, and the consequent monetary and financial tightening will inevitably hamper investment and exacerbate output losses in emerging markets.

The Minister also noted that Egypt urges multilateral development banks to contribute to significantly simplifying access to finance and reducing significant financial costs by using the breadth of their policy and financial instruments for greater results, including on private capital mobilization, and to ensure higher financial efficiency and maximize use of existing concessional and risk capital tools to increase innovation and accelerate impact.

Moreover, She noted that climate action and development progress is suffering major setbacks due to these crises. The Minister referred to increasing poverty levels, food insecurity, high rates of displacement and refugees, and inequalities, adding that the repercussions of the COVID-19 pandemic are ongoing and that this has caused a decline in economic growth, with global growth remaining below pre-pandemic levels.

Al-Mashat reiterated the international community's call to fulfill commitments and the importance of providing what developed countries previously committed to by making $100 billion available to developing and emerging countries for climate action, to stimulate development financing, and the need to facilitate financing for Africa and the least developed and developing countries through innovative tools and mechanisms.

She also welcomed the ongoing discussions on the World Bank evolution roadmap and the proposals to enhance the Bank’s operational model, noting that the Government of Egypt stresses the importance of global and regional dimensions in the country's engagements in the development model based on the centrality of the country-based model and to preserve the country ownership. In this regard, it is of great importance to support close cooperation with multilateral development banks, increase the financing capacity of the World Bank and search for more efficient ways to stimulate the operating model.

In the same connection, Al-Mashat affirmed Egypt's keenness to continue contributing to the efforts of the international community to face global challenges, overcome their negative repercussions, build resilience to crises, and strengthen collective action to implement pledges to ensure that no one is left behind in development.

The Minister thanked the President of the World Bank Group, David Malpass, for his tireless efforts during his tenure as the bank's chairman to support member countries.

Meanwhile, the G-24 expressed its appreciation for the role played by Egypt in hosting and chairing COP27, efforts to enhance climate action, and affirmation of support in implementing the Sharm El-Sheikh plan to implement climate pledges, especially what was agreed upon in terms of launching the Loss and Damage Fund.

The G-24 issued a closing statement in which it stressed the seriousness of the successive crises facing the world and their impact on all aspects of development, and the need for the international community to play its role in overcoming these challenges, calling for expanding the role of the World Bank to enhance its mission to end poverty, achieve shared prosperity, and support developing countries.

It is worth noting that the G24 was established in 1971 in order to help coordinate the positions of developing countries on international money and funds and development financing issues, as well as ensure that their interests are adequately represented in negotiations on international monetary matters.

Under the theme "The Way Forward: Building Resilience and Reshaping Development," the Spring Meetings of the WBG and the IMF for the year 2023 were launched in Washington to discuss the complex challenges facing the global economy after three years of the COVID-19 pandemic, the uncertainty due to the Russian-Ukrainian war, and the risks facing the global economy due to the rise in US interest and inflation rates.