The Banking Executive Magazine - April 2021

World Bank/IMF Spring Meetings 2021 poverty reduction and growth trust’s resources as well as to increase the imf’s own resources devoted to ca- pacity development that has been in- creasingly sought by countries. We urge the imf to find the means to in- crease its internal budget resources to ensure that it has the necessary fi- nancial and human resources to ful- fill its mandate. We look forward to the upcoming review of the imf’s in- stitutional view on capital flows which should aim to help countries reap the benefits of capital flows while managing risks to ensure sta- bility. 6. It is crucial to support developing countries in managing their worsen- ing debt vulnerabilities to avoid a debt crisis that retards development progress and enable countries to ac- celerate growth and regain debt sus- tainability. The g20’s debt service suspension initiative (dssi) has pro- vided short-term breathing space for many lics, more than half of which are under high risk of debt distress or in distress. Debt treatments may be needed for some countries to put them on the path to achieve debt sustainability. In this regard, we wel- come the g20’s common framework for debt treatments (cf) beyond the dssi. We look forward to fair, mean- ingful and Expeditious sovereign debt treatments, with participation of private creditors, within the cf. We encourage the imf and the world bank group (wbg) to support the im- plementation of the cf in line with their mandates, provide exceptional financial support to strengthen the capacity of countries to undertake debt treatments when sought and en- hance debt management frame- works, including transparency of debtor and creditor countries and re- porting standards. Realistic debt sus- tainability assessments are necessary to determine the depth of the financ- ing needed. We encourage mdbs to support low- and middle- income countries in need of debt relief, in- cluding through innovative instru- ments to reduce debt burdens and ensuring significant positive net transfers. The effective implementa- tion of the cf in a way that moderates market and credit rating agency re- actions could encourage eligible countries to seek timely debt treat- ment, when needed. We reiterate our call for increased multilateral efforts to improve the architecture for sov- ereign debt resolution to facilitate ex- peditious debt treatments. 7. Severe fiscal constraints and heightened debt vulnerabilities im- peril our ability to contain the pan- demic and invest to build back our economies in an inclusive, resilient and sustainable manner. The wbg and other mdbs should use the strength of their balance sheets to scale up financial support to both low- and middle-income countries. We commend the wbg’s frontloaded international development associa- tion (ida) lending program. We look forward to the successful completion of ida20 replenishment in end-2021. The wbg should strengthen its finan- cial support for middle-income countries and consider waiving front- end and commitment fees to help countries recover. We urge the wbg to explore options to stretch its bal- ance sheets to the fullest extent pos- sible to boost their medium-term lending capacity, including greater flexibility in implementing individual country lending limits. Shareholders should monitor and address con- straints to mdbs’ lending capacity in a timely way. 8. Developing countries will need to explore all sources of financing to re- build fiscal buffers as their economies recover and ensure effec- tive use of resources. Countries should explore avenues to ensure that taxes can contribute to raise rev- enues, address inequality, improve health outcomes and promote a sus- tainable recovery. We urge the imf and the wbg to further strengthen support for capacity building for do- mestic resource mobilization and public debt and expenditure man- agement. We call on the imf and the wbg to enhance their support to ad- dress the challenges faced by small states, fragile and conflict-affected states and countries hosting refugees and experiencing significant migra- tion influx. We urge the wbg and other mdbs to explore innovative and effective solutions, including de- risking instruments, to leverage more private financing in sustainable en- ergy and other infrastructure invest- ments as well as initiatives to support small and medium enterprises. 9. We call for multilateral coopera- tion to reform international tax rules and practices to prevent further ero- sion of our tax bases. On the taxation of the digital economy, we look for- ward to a fair and equitable multilat- eral solution that addresses concerns of developing countries and the tax- ation challenges of digitalization. We seek a solution that yields meaning- ful and sustainable revenues for de- veloping countries by enabling them to tax their fair share of the profits of multinationals in this digital age. The solution should be simple to imple- ment and comply with. Additionally, we urge the imf and the wbg to deepen their work to measure, mon- itor, and contain illicit financial flows. 10. We welcome the stronger inter- national support for an inclusive and sustainable recovery. Delivering on climate finance by the global com- munity is a critical and fair way to as- sist developing countries to implement their nationally deter- mined contributions to meet climate goals. Advanced countries should fulfill their commitment, under the 2009 climate accord, to provide $100 billion annually by 2020 at the earliest possible time. It is critical to scale up currently meager amounts of concessional resources and fi- nance for adaptation. Adequate fi- nancing and technical assistance from mdbs and climate-related funds will be crucial to support sustainable investments, especially infrastructure and energy, and leverage more pri- vate financing. ISSUE 148 APRIL 2021 the BANKING EXECUTIVE 27