UN Secretary-General António Guterres told the meeting that there was no need to wait for major reforms, but that it was possible to act now and take a giant step towards global justice. The two-day meeting initiated by Macron is about consultations on a more supportive financial system. Binding decisions were not to be taken, but guidance was expected on how to bridge the widening gap between industrialized countries and countries in the Global South, which are particularly affected by the consequences of climate change.
As Macron said before the meeting, it is about reforming the financial system with the World Bank, the International Monetary Fund (IMF) and public and private funds to tackle the dual challenges of poverty and climate change.
In a joint contribution to the Paris summit, 13 heads of state and government, including Chancellor Olaf Scholz, US President Joe Biden, EU Commission Chair Ursula von der Leyen and British Prime Minister , Rishi Sunak, emphasized their commitment to improving the well-being of the world’s people. “We are convinced that a fair ecological transition, which leaves no one behind, can be an important factor in combating poverty and supporting sustainable and solidary development”. Long-term investments would have to be made worldwide and solutions found for heavily indebted countries.
Dealing with poverty and tackling climate change would require innovative finance, debt buybacks and accountability for the sectors that have benefited most from globalization. “Solidarity and joint action are at the heart of our cooperation to alleviate the difficulties faced by developing countries and achieve our global goals,” said the statement, published by Le Monde newspaper.
Specifically, the summit is about investments in countries particularly affected by climate change. In view of growing inequality, Macron insisted on significantly more public and private funds. So far, not enough has been done in both areas. “Without the private sector, we will not meet this challenge.”
Labor and Economy Minister Martin Kocher represented Chancellor Karl Nehammer (both ÖVP) at the summit. “To effectively combat climate change, not only public investment is needed, but also decisive incentives for private capital,” Kocher said Thursday, according to the broadcast. “By creating a framework that encourages private companies to develop and fund sustainable solutions, we can unlock the full potential for entrepreneurship and innovation.”
Development organization One demanded from the meeting that economically weak countries be given easier money to deal with crises. Until now, the conditions for granting loans to these countries have often been unfairly regulated. The federal government must push for reforms of development institutions like the World Bank.
Dealing with debt will also be discussed at the summit. French Economy Minister Bruno Le Maire told RFI that the debts of extremely poor countries with excessive debt would have to be restructured. “We want to do this together with our Chinese partners.” With a view to Sri Lanka and Zambia, they are now close to reaching an agreement.
Along with Japan and India, France launched a platform for negotiation between Sri Lanka’s creditor states. In April, however, it was still unclear whether China, as the largest bilateral creditor, would join the process. Sri Lanka had external debts of US$ 35.1 billion in September last year. According to Japan’s Ministry of Finance, 19 percent of that was in China, seven percent in Japan and five percent in India.
According to the International Monetary Fund (IMF), an old promise made by the G-20 countries to the poorest countries has finally been fulfilled: “We are reaching the target, we have 100 billion”, IMF head Kristalina Georgieva told a conference summit in Paris on Thursday. In 2021, G20 countries had pledged to reallocate so-called special drawing rights worth $100 billion to the poorest countries so they can better arm themselves against the consequences of climate change.
So far, this promise has not been implemented. Special Drawing Rights (SDRs) were created by the IMF as early as 1969 and used, among other things, during the 2009 financial crisis and during the corona pandemic. They represent a kind of artificial currency reserve. The Prime Minister of the Caribbean state of Barbados, Mia Mottley, defended the use of this instrument for climate protection. There is another promise that dates back to the 2009 climate conference in Copenhagen. According to this, developing countries should receive 100 billion annually for climate protection from 2020. This has not yet been implemented.
UN Secretary-General António Guterres told the meeting that the list of things that can be done is long. You don’t have to wait for major reform, but you can act now and take a giant step towards global justice.
In the corona pandemic, the debts of numerous poor countries exploded. As interest rates are rising significantly, many of them are threatened with collapse. The World Bank plays an important role in planned aid. She announced measures to accommodate countries in case of natural disasters. US Treasury Secretary Janet Yellen also spoke in favor of this.
According to the manuscript, the new head of the World Bank, Ajay Banga, wants to show several ways to help developing countries more in a speech on Thursday. This included suspending debt payments or being more flexible in case of sudden disasters. It’s time for a new vision for the World Bank, a Washington-based development bank whose largest shareholder is the United States. Banga referred to the war in Ukraine, the climate crisis and rising inequality in the world as justification.
A draft summit statement seen by Portal said leaders wanted to support development banks’ plans to allocate more capital. In this way, more loans could be extended to poor countries, as long as the maximum “AAA” credit rating is not lost as a result. According to sources, however, no binding decision is expected at the summit. It is more likely to result in strong commitments to support poor countries.