The International Monetary Fund (IMF) and the World Bank have committed to closer collaboration to address the "existential threat" of climate change and a buildup of debt vulnerabilities, according to a rare joint statement released on Thursday. The two institutions also pledged to enhance support for countries transitioning towards digital technologies, including efforts to improve cross-border payments.
The joint statement, issued ahead of the G20 leaders summit in India, emphasized that the Bretton Woods institutions, with their universal membership and specialist expertise, are well-positioned to help countries tackle global economic challenges. These challenges range from increasing climate disasters to slowing growth and geopolitical fragmentation.
"Climate change is a threat to global peace, security, economic stability, and development," said IMF Managing Director Kristalina Georgieva and World Bank President Ajay Banga. The leaders also highlighted the need for their organizations to assist member countries in integrating their climate and development goals.
The statement further indicated that the two institutions would formalize regular meetings of the new Bank-Fund Climate Advisory Group every two months. This group will review climate-related developments on key projects, including loans through the IMF's new Resilience and Sustainability Trust. This trust provides middle-income countries with financing for climate resilience and transition projects.
On the issue of debt vulnerabilities, the IMF and World Bank will incorporate climate considerations into their work on debt sustainability for low-income countries. They vowed to enhance their joint work to prevent further buildup of debt vulnerabilities by assisting countries in strengthening debt management, transparency, and public finances.
In terms of digital transition, both institutions pledged to collaborate in helping countries connect their citizens to online services and reduce barriers to digital inclusion. This includes improving cross-border payment systems while ensuring that such innovations spur growth, poverty reduction, and job creation.
The joint statement underscores the strong emphasis that Ajay Banga, former Mastercard (NYSE:MA) chief executive and current World Bank President, has placed on the issue of climate change since he began his role in the summer. The Biden administration, which nominated Banga to the position, has also been pushing development lenders to do more to support financing for climate change mitigation and adaptation.
The G20 meeting presents a real, albeit challenging, opportunity for member countries to come together to tackle the climate challenges laid out in the joint statement, according to an individual with knowledge of the matter.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.