MDB lending helped to provide the infrastructure, institutions and policy development that have made it possible for private capital to flow. This continues today, to varying degree in different countries, even though such loans are now very small in relation to the total private and public capital inflow. In general, however, MDBs should not finance any project that is privately financeable. It was noted that the private sector has shown little interest in direct lending to the education and health sectors that are so critical for development. Policy guidance can best come from MDBs and this remains critically important.
Private investors have little incentive and capability to give or enforce such guidance.
The World Bank's policy guidance has helped emerging market economies to develop and helps bring them into the Western economic system. Further, MDB lending provides an important element of stability in a continuum of foreign capital flows that includes considerable uncertainty and vulnerability in its dominant private component. That is why the private sector generally welcomes and takes comfort in continued World Bank participation in these countries, seeing it as an agent of necessary policy reforms, not as a competitor. Many Roundtable members argued that the World Bank and other MDBs should continue offering guarantees, but stop demanding a counter guarantee from host countries. There was support for focusing policy guidance increasingly on improving tax, legal, accounting and banking systems in these countries in order to create an enabling environment for private investment.