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Caribbean Leaders Want Urgent Reform of the Global Financial Structure

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By Linda Hutchinson-Jafar

PORT OF SPAIN, Trinidad. 21 September 2023 (IDN) — In a resounding call to action, leaders in the Caribbean Community (CARICOM) have urged the international community to swiftly embark on comprehensive reforms of the global financial system to create a conducive environment that empowers developing nations to address inequities and achieve the Sustainable Development Goals (SDGs). (P18) HINDI | JAPANESE

In pivotal comments on the global financial architecture at the SDG Summit on 18-19 September at the UN headquarters in New York, Barbados’ Prime Minister, Mia Mottley, highlighted key aspects of international financial reform, which she emphasized went beyond mere governance issues but focused on the need for substantial changes within the system to facilitate long-term, affordable financing.

Mottley bemoaned the current predilection for short-term lending, underscoring the necessity for nations to secure long-term financing for essential sectors such as education and healthcare. She maintains that financial reforms are imperative for addressing inequities and achieving the SDGs.

“I think we have to recognize that the calls for international reform of the financial system are not just about governance, but they are for us, longer money, cheaper money and being able to use it or the purposes for which we need to reduce all of our inequities and to achieve the element of the SDGs,” she said during a panel discussion on the implementation of the SDGs.

Unified effort

Prime Minister Mottley, who has emerged as a prominent voice in this clarion call for reform of the global financial architecture, called for a unified effort involving the World Bank, the International Monetary Fund, and the United Nations to engage credit rating agencies, which she said was a critical step to address the prevailing preference for short-term lending.

Supporting the call for reform within international financial institutions and the regulatory standards that guide them, Keisal Peters, the Minister of Foreign Affairs for St. Vincent and the Grenadines, emphasized the pressing need to realign financial flows in support of critical priority goals.

“We must act on the increasing momentum to reform the overarching international financial architecture. At the core, we need better alignment with climate and sustainable development goals and the needs and priorities of developing countries,” she said on the conference’s second day.

Dominica’s President, Charles Angelo Savarin, also emphasized the pressing need for reform within the international financial architecture. President Savarin’s remarks came against the backdrop of ongoing existential threats facing Caribbean countries, including the prolonged impact of COVID-19, the ravages of climate change, and the global conflict in Ukraine.

He underscored the critical importance of enhanced leadership at the multilateral level to address these complex challenges effectively. He asserted that the time has come for substantial commitments from governments and stakeholders to elevate the implementation of the SDGs.

He emphasized the importance of taking resolute action, especially in enhancing support for developing nations. In pursuit of this goal, he recommended measures such as providing long-term loans with lower interest rates, implementing debt relief initiatives, and creating a robust and efficient system for resolving sovereign debt issues.

“CARICOM, therefore, calls for urgent action from the international community to reform the international financial architecture and ensure an enabling environment for developing countries to actively participate in and benefit from the global economy,” he said while speaking on behalf of the 15-member Caribbean Community (CARICOM) bloc of countries.

Dr. Mohamed Irfaan Ali, the President of Guyana, asserted that the current international financial system does not align with the requirements of developing nations and must undergo reform.

Critical juncture

“We will not have a world where everyone everywhere enjoys their full human rights, peace and security, and is free from poverty and hunger unless the right to development is realized and respected,” he added.

The President of Guyana also pointed to the critical juncture the world is facing in the pursuit of Agenda 2030 amidst a complex crisis. He noted that the developing world is in a precarious financial position, dealing with the intertwined challenges of rising financing expenses, increasing debt-to-GDP ratios, and unsustainable national financial records.

Considering this, Dr. Ali referred to a recent report from the Inter-American Development Bank (IDB) that shed light on the monumental funding gap required to achieve critical SDGs in Latin America and the Caribbean (LAC).

These essential goals encompass access to clean water and sanitation, sustainable energy sources, the construction of infrastructure supporting sustainable industrialization and innovation, and sustainable urban centers. The report estimated that a staggering $2.2 trillion in financing would be needed to realize these objectives in the LAC region alone.

In addition to these financial concerns, the debt-to-GDP ratio in the LAC region reached a troubling 117% in 2022. Inflation rates stood at 9.2%, further complicating the economic landscape.

Guyana’s expansion of its economy, fueled by its rich oil sector, has allowed the South American country to focus heavily on the SDGs. Investment per capita in health has increased by 62%, in education by 64%, and security by 153% over three years.

“But national commitment alone will not be enough to achieve the SDGs, especially for the poorest and most vulnerable,” he said.

He identified a major part of the problem as a lack of progress with Goal 17 on global partnerships and the failure of the international community to deliver on its commitments.

“International financial commitments, be it the 0.7% of Gross National Product for ODA—a commitment made 50 years ago—or the one hundred billion dollars annually under the Paris Agreement to developing countries, among others, have not been met.

“Guyana believes that significant progress can only be made in achieving the SDGs if national efforts are matched by commitments being fulfilled and if an international environment is created that fosters progress for all countries,” the Guyanese president asserted.

Agenda 2030 remains the global blueprint

Trinidad and Tobago’s Minister of Planning and Development, Pennelope Beckles-Robinson, said at the midpoint the real prospects for developing countries to achieve sustainable development by 2030 appear bleak in the face of climate change, multiple crises and global instability.

In the prevailing circumstances, the SDGs are even more crucial now as the 2030 Agenda remains the global blueprint to ensure that no one is left behind.

Beckles-Robinson said that despite progress on technology-driven solutions in education, health, energy, and infrastructure, for small island developing states like Trinidad and Tobago, “we remain trapped in a maze of compound risks and exogenous shocks.”

Prime Minister of Saint Lucia, Philip Pierre, stressed the urgency of building resilience and ensuring that no one is left behind in the face of ongoing crises. He emphasized the importance of protecting vulnerable households, investing in their future, and promoting national sustainable development.

“As leaders, we know all too well that the essence of our mandate is to build resilience and leave no one behind. We gather today against the backdrop of persistent and escalating crises that expose and exacerbate our vulnerabilities,” he said.

He emphasized his commitment to prioritizing people’s well-being and the importance of resilience in the face of challenges such as climate change, biodiversity loss, geopolitical tensions, conflicts, and the COVID-19 pandemic.

Dr. Joyelle Clarke, Minister of Sustainable Development in St. Kitts and Nevis, highlighted the crucial role of international support for the SDG Agenda. She called for support for innovative financial instruments, predictable climate finance, debt relief, concessional financing, and amplifying the voices of the smallest nations and most vulnerable populations. [IDN-InDepthNews]

Image credit: United Nations





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