griffithjones9_getty images_wind power Getty Images

The Age of Public Development Banks Has Arrived

With combined assets of more than $11 trillion, public development banks already play a significant role in the global economy. They should now increase their individual and joint activities further, in ways that even better aid the green and fair recovery the world urgently needs.

NEW YORK/PARIS/BEIJING/BRIGHTON – Major global threats – including the COVID-19 pandemic, climate change, and rising inequality – call for large-scale concerted action. The challenge facing policymakers today is to support big structural transformations that can make economies simultaneously more productive, more inclusive, and less carbon-intensive. Public development banks (PDBs) – at the local, national, subregional, regional, or interregional level – are key to helping governments finance a rapid recovery from the COVID-19 crisis, and to ensuring that economies serve people and the planet far better in the long run.

In providing direct public financing and mobilizing private finance, PDBs should select and support long-term productive investments, including those that emphasize low-carbon projects, as well as those benefiting poorer regions and populations. And they should base their selection on criteria that put development impact first, with financial returns an important but secondary objective.

The role of PDBs will be the focus of an important research conference on November 9-10 as part of the first Finance in Common Summit. This summit, which has the backing of French President Emmanuel Macron, United Nations Secretary-General António Guterres, and International Monetary Fund Managing Director Kristalina Georgieva, will bring together heads of state and the chief executives of many of the world’s 450 existing PDBs.