The case for an Indo-Pacific Economic Resilience Bank

Executive summary Eighty years ago at Bretton Woods, leading countries gathered to design an international financial architecture needed to sustain a broadly open world economy and global financial stability. The institutions that emerged remain important, but they are struggling to rise to the modern-day challenges posed by climate change and economic insecurity. The world faces a multi-trillion-dollar financing gap to reinvigorate stalling global development and create diversified green supply chains to enable a secure clean energy transition for all countries. We propose the creation of a new kind of multilateral bank focused, at least initially, on the Indo-Pacific region. Our proposed Indo‑Pacific Economic Resilience Bank (IERB) would adopt a multilateral economic security mission. It would combine the powerful financing model of a multilateral bank with the specialised capabilities of a dedicated green bank. IERB would mobilise fresh public and private capital to scale up investment in the clean energy transition, primarily in developing economies, while actively supporting the diversification of green supply chains, diluting China’s current market dominance. The bank would help build new industries and diversified markets for both developing and advanced economies, while providing the multilateral cooperation and institutional capability needed for a more secure and sustainable world. Introduction The goal of the Bretton Woods Conference of July 1944 was to rebuild the global economy after the devastations of the Second World War and Great Depression. The international financial architecture that emerged, centred around the World Bank and International Monetary Fund (IMF), has continued to evolve and serve the world well, notwithstanding its imperfections. Today, intensifying climate change, stalling poverty reduction, economic insecurity, high levels of public debt, rising costs of living, and great power rivalry are contributing to a less prosperous, more fragmented, and increasingly unstable global landscape. The work of the World Bank and other public financial institutions has never been more important, yet it has never been more difficult. At the heart of the problem lies a multi-trillion-dollar financing gap to deliver on a range of vital global public goods, notably for climate and development. Reform of existing institutions, specifically the multilateral development banks (MDBs), is proceeding too slowly and is hampered by strategic rivalry.