Expanding MDBs' vision risks fund diversion: NK Singh

Leading economist and co-chair of the independent G20 expert group on multilateral development banks (MDBs) NK Singh Tuesday said broadening of their vision has a moral hazard as it would lead to diversion of funds from goals to lift extreme poverty.

"You will be diverting the money... I will not be an advocate. Because I feel deeply that we will be making a mistake if we ignore extreme poverty in large parts of Sub-Saharan Africa," Singh told reporters on the sidelines of the group's consultation with non-state organisations on 'strengthening MDBs'.

Singh, who co-chairs the nine member group with former US treasury secretary Larry Summers, said the group will submit its first report by June 30. The second report would be submitted in September.


He said the name of the game is additionality, not substitution.

The panel has been set up under India's G20 presidency with a mandate to develop a road map for an updated MDB ecosystem, specifying milestones and timelines, that includes its vision, incentive structure, operational approaches and financial capacity.

It would evaluate estimates of the finance scale needed to and from the MDBs and propose mechanisms for coordination among MDBs.

India has repeatedly pressed on the need for reforming MDBs. Prime Minister Narendra Modi has raised the issue several times.