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20
Cries for change
The financial fuel for these organizations is
typically provided by their shareholders who
generally include the national governments
of borrowing and lending nations, as well as
other international institutions and donors.
As shareholder nations themselves grapple
with constrained budgets, and with clamors
for smarter resource allocation and better
outcomes, they are passing along calls for
efficiency, transparency and accountability to
the multilateral development institutions they
support.
Shareholders, to be certain, represent a
major catalyst for change. However, their
concerns simply reflect the reality of the
marketplace. The operating landscape for
multilateral finance organizations today differs
dramatically from when most of them were
formed: the environment is more dynamic,
more competitive and more technologically
advanced.
In the interest of preserving their credibility
and long-term viability these organizations
have been forced to rethink how they
operate. They are on the hunt for ways to
modernize their operations and embracing
results-based management frameworks. In
their quest for measurable improvements –
whether at the project, country program, or
overall organizational level – their attentions
have turned to market-proven systems and
methodologies that have taken hold in the
private sector.
One of the leading multilateral development
banks has instituted a “Program for Results,”
for example, which links funds disbursement
directly to delivering defined results. The
objective of the program is to ensure that the
bank’s financings are both used appropriately
and deliver the desired impacts.
Treasury in the cross-hairs
Administratively, a function that is often ripe
for process improvements – and for replicating
private sector practices – is treasury and
cash management. Many multilaterals, given
the cross-border nature of their lending,
procurement and disbursements activities,
possess a complex web of transaction and
information management systems and
processes. A multiplex of banking relationships
typically spans a sizable collection of local
and global providers. Many activities that
could be automated remain manual or paper-
based. What’s more, lack of integration and
standardization complicates data aggregation
and analyses, making it hard to manage
risks, optimize funds usage and validate
performance goals.
The operating landscape
for multilateral finance
organizations today differs
dramatically from when
most of them were formed:
the environment is more
dynamic, more competitive
and more technologically
advanced.