BRIDGETOWN 2.0

the Rapid Credit Facility and Rapid
Financing Instruments.
2. Restore debt sustainability

Urgent and Decisive Action
to Reform the International
Financial Architecture
APRIL 2023
Designed at a time when most of today’s
member states were not independent andwhen climate risks or social inequalities,
including gender equality, were notconsidered pre-eminent development
challenges, the International Financial
Architecture (IFA) already had structural
deficiencies at the time of its conception.
These have become increasingly atodds with the reality and needs of theworld today, making the IFA entirely unfit
for purpose in a world characterized byunrelenting climate change, increasingsystemic risks, extreme inequality, highly
integrated financial markets vulnerable
to cross-border contagion, and dramatic
demographics, technological, economic,
and geopolitical changes.

G20 Creditor Countries, (either throughthe Common Framework for Debt
Treatments or otherwise) to:• Redesign the Common Framework,
including by speeding up debt relief andcancellation with reliable timelines, debt
service standstills, and ‘most favoured
creditor clauses’, and allow debtdistressed middle-income countries tomake use of the Common Framework.
The IMF to:• Encourage the restructuring of
unsustainable private debt through IMF
programs that are consistent acrosscountries and have more locally driven
fiscal sustainability plans.
• Refine the Debt Sustainability Analysis,
including adopting changes that enable
investments that create future savings tohave a lower weighting than other debt.
Public, multilateral, and private
creditors to:

We call for an integrated development andresilience strategy to achieve the SDGs,
including actions to address liquidity anddebt sustainability, massively scale up
of development finance, mobilize private
capital, and build a matching trading
system. We also call for inclusive andequitable global economic governance.
Together with the SDG Stimulus, theBridgetown Initiative can accelerate
progress towards the SDGs and the Paris
Agreement. Below we highlight priority
actions of the Bridgetown Initiative that wecan undertake now.

• Adopt zero-cost, net-present-value
neutral natural disaster clauses in alllending instruments to make them more
shock-absorbing.

1. Provide immediate liquidity support3. Mobilize private sector investment toover $1.5 trillion per year for green andjust transformations

UN Member States to:• Fast track the re-channeling of $100
billion of Special Drawing Rights (SDRs)
to the Poverty Reduction and GrowthTrust and the Resilience & Sustainability
Trust.
The IMF to:• Immediately suspend surcharges for two
to three years.
• Restore the enhanced access limits
established during the pandemic for• Refinance high-interest and short-term
debt with credit guarantees and longer
maturities.
UN Member States to:• Agree new international resources(whether taxes, charges, or othersources) to fund the UNFCCC Loss andDamage Fund to $100 billion per year.

IMF and MDBs to:• Cut the excessive macro-risk premia on
developing countries with $100 billion
per year of foreign exchange guarantees
for just green transition investments.
• Expand project preparation support, risk
reduction instruments, blended finance,and viability gap funding in order tostrengthen the pipeline of bankabledevelopment and climate projects.

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NOTE: This document, reflecting an updated set of reform proposals championed by diverse stakeholders, is being shared to seek
constructive input and advice in the hope that constituencies can work together to advance our shared agenda. It is vital that weachieve success in meeting these urgent global challenges with focused, specific, effective responses.

4. Increase official sector development
lending for SDGs to $500 billion
per year
The G20, shareholders of the World
Bank, Multilateral Development Banksand IMF to:• Fully implement the CAF Review
recommendations, including on callable
capital and SDRs.
• Put an additional $100 billion of paidin capital contributions into MDBs andre-channel SDRs to the MDBs, leadingwith the African Development Bank bySeptember 2023.
• Increase the leveraging of the IDA
balance sheet, fully fund the Crisis
Response Window ($6 billion) by theend of 2023, and implement a phased
scale up of IDA to $279bn in IDA 22.
• Raise the access limits for the Poverty
Reduction and Growth Trust and theResilience & Sustainability Trust.
• Move ‘beyond GDP per capita’ tocapture vulnerability in funding eligibility
criteria and provide low-cost, 50-year
loans for vulnerable countries to invest
in climate resilience, anti-fragility,
pandemic preparedness, food and water
security, renewable energy access,and bridging the digital divide and otherforms of greater resilience.
• Streamline and harmonize loan
procedures across MDBs and IFIs,
increase front-line support to countries
accessing loans, and finance countryled national resilient development plans
and multi-country programs that protect
the global commons.
5. Ensure that the multilateral trading
system supports the green and justtransformation
WTO, ILO, UNCTAD, and major trading
partners to:• Work with governments to ensure supply
chains become resilient, benefit rawmaterials producing nations and protect
the vulnerable.
6. Reform the governance andoperations of International FinancialInstitutions (IFIs)
Shareholders of IFIs to:• Update the 1945-based institutions
to be more inclusive and equitable,
including issues of governance, voice,representation, and access to finance.

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