2023-06-23 15:17:16
On the second and last day of the summit for a New Financial Pact in Paris, an event that seeks to shape the roadmap to promote a new world financial order, the marked differences between two groups of countries were glimpsed: the most developed and the that make up the V20 agglomerate, the list of countries most vulnerable to climate change, including Costa Rica.
Those of the V20 are precisely the main promoters of the discussion that the French capital hosted this week, with the Prime Minister of Barbados, Mia Mottley, being one of the main leadership figures.
Since the founding of the V20 in 2015, this group of 58 countries—including Costa Rica, Ghana, the Philippines, Saint Lucia, Kenya, the Maldives, Barbados, and Vietnam—have advocated for the creation of a new economic cooperation mechanism to help them deal with the shared environmental problems and finance low-carbon projects to boost their economic development.
This effort was given further impetus by Mottley, who devised the Bridgetown Initiative, in which he brought together, between July and August 2022, eminent specialists from civil society and academia to specify the proposals necessary to advance the work. The results, which Mottley even went so far as to present at the 77th Assembly of the United Nations (UN), propose increasing the fiscal room for maneuver for the development of emerging or indebted countries, as well as for climate mitigation and adaptation.
Thus, this Friday around a hundred countries gathered at the Palacio de la Bolsa, summoned by Emmanuel Macron, president of France and organizer of the event, waiting to know the list of commitments that resulted from the debates held during the summit. , where they highlighted several proposals on how to release billions of dollars (both from the public and private sectors), considered essential to finance the energy transition and the adaptation of countries vulnerable to climate change.
Representing our country will be the Costa Rican ambassador to France, Ana Elena Pinto, who attended but did not participate in the talks, and the representatives of the Costa Rican mission to the Organization for Economic Cooperation and Development (OECD).
For this, approaches were discussed to modernize the role of multilateral institutions such as the World Bank (WB) and the International Monetary Fund (IMF), so that they fully focus on the needs of the most vulnerable countries in terms of the fight against change. climate change, poverty reduction, human development and the protection of biodiversity.
Among the speakers were some forty heads of state and government, including the presidents of Brazil, Colombia and Cuba, as well as representatives of civil society and leaders of regional development banks.
However, despite the fact that the talks took place in a proactive environment, always focused on consensus and the exchange of ideas, they also revealed the lack of trust that exists on the part of the most vulnerable countries (of the V20 group), due to a series of unfulfilled promises by the most developed nations.
Heads of state did not hesitate to express their opinions on the subject, one of them was Nana Akufo-Addo, president of Ghana, who undertook against other previously announced proposals, where “it was promised, but never fulfilled” with what was agreed.
“For example, the option to extend the special drawing rights so that African countries can access this benefit was a promise that was made to us years ago and was never fulfilled,” denounced Akufo-Addo.
The president of Kenya, William Ruto, stated that his intention is not to request help from rich countries, but to demand a reform of the global financial architecture that allows the participation of developing countries in the search for solutions.
“Rich countries have an ethical and political responsibility to share their resources with the most vulnerable,” said Abdelfatah El-Sisi, Egypt’s president.
Among the possible solutions proposed are debt relief, the expansion of the lending capacity of multilateral financial organizations, the mobilization of the private sector and the implementation of a new tax system.
Thus, after almost two hours of deliberation between world, multilateral and civil society leaders, Macron announced the list of objectives achieved in his closing speech.
“Banks often lend money and the money lent is the result of the bankruptcy of the state. This is what we are seeing today in Argentina,” said Brazilian President Luis Inacio Lula da Silva.
Although this list of “commitments” announced by Macron is not binding, the French president defended that its main objective will be to serve as the roadmap to determine “the process by which in the coming months (with a view to the great world summits that will be held this year, including COP28 and the G20) can serve as a guide as a work agenda to guarantee compliance with what it proposes”.
The “deep governance reform” that this effort seeks, according to Macron, is a complex but essential process, and will only be achieved if summit participants stick to the goals agreed this week to make them a reality during global meetings. , whose agreements are binding and capable of advancing the effort proposed in consensus by the countries that attended this summit in Paris.
On the other hand, the Summit for a New Financial Deal resulted in some significant immediate progress, as was the case in Zambia. On Thursday, the African nation’s creditor countries (mainly China) agreed to restructure Zambia’s debt (which is estimated at approximately $17 billion), a decision that now allows the nation to receive a second installment of financing from the International Monetary Fund (IMF).
In addition, the World Bank (WB) announced the adoption of new “tools”, such as the possibility of pausing debt payments in the event of catastrophes.
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