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CGD Policy Blogs

 

Panoramic view of Bogota, Colombia

The Interdependence Between Multilateral Development Banks and Middle-Income Countries

Every MDB is now confronted with the question of what to do with middle-income countries, given the need to focus on the Sustainable Development Goals in general, but very concretely on goal #1—poverty eradication—which will be difficult to achieve based on recent trends. MDBs are very important for MICs, but at the same time MICs are vital for MDBs. This is essentially a two-way relationship. Without MICs, MDBs will be less innovative, will have less knowledge and, importantly, will require more capital from shareholders. I will explain why I believe so in this short note.

Figure 3. Number of IDFC institutions active within each SDG

The Biggest Club You’ve Probably Never Heard Of

SDGs. Billions to trillions. South-South development cooperation. Development finance. If these terms resonate with you (positively or negatively), and you’ve never heard of the International Development Finance Club (IDFC), you should rectify that. At least, that’s the conclusion we’ve drawn after a year-long study of the IDFC and its member institutions. This work has culminated in a new CGD report, The International Development Finance Club and the Sustainable Development Goals: Impact, Opportunities, and Challenges

Two stacked bar graphs, one with the total assets of the IDFC members (totaling 3.7 billion) and the other with the MDBs (totalling 1.5 billion).

Rising to the SDG Challenge: The Unique Contribution of the International Development Finance Club

The IDFC represents a unique mix of bilateral agencies, national development banks, and regional development banks. As such, it holds promise for bringing new and productive collaborations to the SDG agenda that extend well beyond the work of the major multilateral development institutions. In a new brief, our efforts to map the scale and scope of IDFC members’ development financing through a membership survey and public databases provide some interesting takeaways: