SDGs: UN Chief, Barbados PM call for action on global financial system
The United Nations Secretary-General and the Prime Minister of Barbados have proposed a large-scale SDG Stimulus package to invest in the Sustainable Development Goals (SDGs), stressing the need for a reform of the international financial architecture.
“The international financial architecture is short-sighted, crisis-prone, and bears no relation to the economic reality of today,” the statement quoted UN Secretary-General António Guterres as saying.
Convened at the UN Headquarters in New York by Secretary-General António Guterres and Prime Minister Mia Amor Mottley, participants included experts from academia, civil society and national governments. They considered concrete actions to advance immediate game-changing steps and longer-term reform.
“The world is running out of time to fix its international financial system that is broken, outdated, infested with short termism and downright unfair. Too many countries are being prevented from fighting the climate crisis and from creating decent opportunities for billions of people – their citizens.
“If countries cannot access the finance they need at rates they can afford, the world will lose the battle, not simply the countries. What is good for the North is good for the South, East and West! This is the best development strategy for the people of the developing world. This is the best development strategy for the planet,” said Prime Minister Mia Amor Mottley of Barbados.
The statement noted that deliberations highlighted an international financial system that is not fit for purpose, with developing countries facing debt overhangs, higher borrowing costs and limited access to liquidity in times of crisis.
In turn, it added, developing economies cannot fund progress on the SDGs, including climate adaptation, if they are borrowing at up to 14 per cent while also paying more than 20 per cent of revenue for debt servicing.
“As a result, the world now faces two options: either we proceed with the status quo, which will lead to a decoupling of the international financial system from developing economies, or we can adapt the current system to the present world. Against this backdrop, discussions centred around six key action areas designed to leverage concrete steps to support all developing countries:
- Provide immediate liquidity support including re-channelling at least $100 billion of unused Special Drawing Rights through the IMF and multilateral development banks.
- Restore debt sustainability today and in the long-term and support countries in restructuring their debt with long-term low interest rates.
- Dramatically increase official sector development lending to reach $500 billion annual stimulus for investment in the SDGs (SDG Stimulus).
- Mobilize more than $1.5 trillion per year of private sector investment in the green transformation.
- Transform the governance of international financial institutions to make them more representative, equitable and inclusive.
- Create an international trade system that supports global green and just transformations.
The meeting also advanced preparations for key finance events in 2023, including:
June: Paris Summit on a “New Global Finance Pact”.
September: Group of 20 Leaders’ Summit, the SDG Summit, and High-level Dialogue on Financing for Development during the UN General Assembly high-level week.
October: Annual Meetings of the International Monetary Fund-World Bank Group.
December: UN Climate Change Conference (COP28).
These events will ultimately feed into the Summit of the Future and the Biennial Summit on the global economy in 2024 and inform the Fourth Finance for Development Conference in 2025.
