By: Staff Writer
September 22, 2023
Barbados Prime Minister of Barbados, Mia Mottley, encouraged world leaders on the sidelines of the 78th United Nations General Assembly that “skill and speed” are both needed for people and the planet at large.
Further explaining her comments, she noted that the nature of the “existential crisis” that the planet faces we must include it in the Sustainable Development Goals (SDGs) as critical part of it and in doing so, become more creative in how we address some of the issues facing the planet.
She added: “There’s not going to be any single single silver bullet to it and therefore a tripling of multilateral development bank lending we continue to call for, the capacity to be able to use guarantees, so as to unlock far more and under European accounting rules. Guarantees do not count as part and parcel of the debt.
She continued, “Similarly, if we were to be able to create a climate mitigation trust that is anchored both in the IMF (International Monetary Fund) and the World Bank, then it allows us to use the special drawing rights without it becoming a liability on the balance sheet of individual countries.”
Due to the tight fiscal space many developing countries have, particularly in the Caribbean, may prefer to use Special Drawing Rights (SDRs) where others who may be liquid may decide not to go that route. But whatever it is, there needs to be a full “menu of options” on the table for all countries, particularly special considerations made for developing states when accessing finance for achieving the SDG’s and other climate change mitigation tools.
Ms Mottley also said: “There’s a dog at our heels. We’re not running fast enough, even though we’re making progress but progress is not accomplishment. Progress is not mission accomplished and therefore these things need to be taken into consideration.”
Further urging large multinational institutions to not think of themselves at the “front of the ship,” in this climate finance crisis, but consider themselves with the rest of the world, particularly in the developing world, sailing together, she further urged them to find their will and make consistent moves to change the international financial architecture.
She added: “The one thing that I’ve learned is that ambiguity is the ally of those who want to defend the status quo. So the first thing we need to do is to get specific, as we look at reform, we don’t only need to look at the things that will cause us to fight the greatest battles.
“In other words, the reform of the governance structure, the imbalance in power that clearly was settled in 1945… because the majority of us, we’re not even countries at that point in time. But there are some things that can be done and we make the point that we need long term money.”
The current relationship with the international financial institutions is “criminal,” because it asks developing countries to pay back multi-million dollar loans in short spaces of time, which is something they cannot do as readily as larger and more liquid economies.
There is no significant reform that is needed to the international financial architecture that would cause there to be a change in the maturation of the loan agreements for developing countries. She noted as opposed to 15 year loans: “We don’t need to wait for monumental reform, to be able to say, let us start giving 30 and 40 year money. Part of it requires, I suspect, a conversation with the credit rating agencies and the markets.”