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Reform of the global financial architecture in response to global challenges : How to restore debt sustainability and achieve SDGs?

Gwaindepi, Abel LU and Karimu, Amin (2024) In In-Depth Analysis
Abstract
Achieving Sustainable Development Goals and climate targets in the face of rising debt levels requires financial resources which the current Global Financial Architecture (GFA) is failing to meet. In this context, calls for reforming the GFA have taken both front and centre stage. These calls are not just for raising more finance, but for making the GFA more equitable, just and responsive to crises by addressing longstanding limitations affecting most countries worldwide. This analysis uses desktop research and qualitative interviews with representatives of global and regional multilateral development banks (MDBs), think tanks and civil society organisations to document calls for reforms and various stakeholders’ positions. It can be seen... (More)
Achieving Sustainable Development Goals and climate targets in the face of rising debt levels requires financial resources which the current Global Financial Architecture (GFA) is failing to meet. In this context, calls for reforming the GFA have taken both front and centre stage. These calls are not just for raising more finance, but for making the GFA more equitable, just and responsive to crises by addressing longstanding limitations affecting most countries worldwide. This analysis uses desktop research and qualitative interviews with representatives of global and regional multilateral development banks (MDBs), think tanks and civil society organisations to document calls for reforms and various stakeholders’ positions. It can be seen that reform initiatives and preferences within the Bretton Woods institutions (the International Monetary Fund and the World Bank) and MDBs fashioned after them are relatively modest, evolutionary and likely to maintain the status quo that mostly privileges GFA architects and majority stakeholders. By comparison, think tanks, civil society organisations and Global South leaders see the current GFA as rooted in colonialism and the need for fundamental reforms, including the possibility of new and alternative institutions. Hence, it is recommended here that influential stakeholders such as the EU and its Member States move their leadership position from talk-based to action-based by reorienting the EU’s financial architecture to play a greater role in reforming the current GFA. While incremental changes are popular and pragmatic, they cannot merely be undertaken on an ad hoc basis. They must be accompanied by fundamental reforms, especially those leading to better debt resolution mechanisms and inclusive governance. (Less)
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author
and
organization
publishing date
type
Book/Report
publication status
published
subject
in
In-Depth Analysis
issue
14-06-2024
pages
31 pages
publisher
Think Tank European Parliament
language
English
LU publication?
yes
id
50066376-e35b-4425-b164-f69c04dfbe50
alternative location
https://www.europarl.europa.eu/thinktank/en/document/EXPO_IDA(2024)754451
date added to LUP
2024-10-30 12:03:06
date last changed
2025-04-04 15:22:02
@techreport{50066376-e35b-4425-b164-f69c04dfbe50,
  abstract     = {{Achieving Sustainable Development Goals and climate targets in the face of rising debt levels requires financial resources which the current Global Financial Architecture (GFA) is failing to meet. In this context, calls for reforming the GFA have taken both front and centre stage. These calls are not just for raising more finance, but for making the GFA more equitable, just and responsive to crises by addressing longstanding limitations affecting most countries worldwide. This analysis uses desktop research and qualitative interviews with representatives of global and regional multilateral development banks (MDBs), think tanks and civil society organisations to document calls for reforms and various stakeholders’ positions. It can be seen that reform initiatives and preferences within the Bretton Woods institutions (the International Monetary Fund and the World Bank) and MDBs fashioned after them are relatively modest, evolutionary and likely to maintain the status quo that mostly privileges GFA architects and majority stakeholders. By comparison, think tanks, civil society organisations and Global South leaders see the current GFA as rooted in colonialism and the need for fundamental reforms, including the possibility of new and alternative institutions. Hence, it is recommended here that influential stakeholders such as the EU and its Member States move their leadership position from talk-based to action-based by reorienting the EU’s financial architecture to play a greater role in reforming the current GFA. While incremental changes are popular and pragmatic, they cannot merely be undertaken on an ad hoc basis. They must be accompanied by fundamental reforms, especially those leading to better debt resolution mechanisms and inclusive governance.}},
  author       = {{Gwaindepi, Abel and Karimu, Amin}},
  institution  = {{Think Tank European Parliament}},
  language     = {{eng}},
  month        = {{06}},
  number       = {{14-06-2024}},
  series       = {{In-Depth Analysis}},
  title        = {{Reform of the global financial architecture in response to global challenges : How to restore debt sustainability and achieve SDGs?}},
  url          = {{https://www.europarl.europa.eu/thinktank/en/document/EXPO_IDA(2024)754451}},
  year         = {{2024}},
}