Barbados PM at Paris Summit for UN’s New Global Financing Pact
By Kimberly Ramkhalawan
June 23, 2023.
In the face of her country facing Tropical Storm Bret, Barbados Prime Minister Mia Amor Mottley made the decision to be present in Paris for the United Nation’s Summit for New Global Financing Pact as she says now, more than ever her message needs to heard, as often as possible, to bring about the change needed.
She is talking about transformation of world financial institutions to include natural disaster clauses, something she has been quite vocal on the international stage for the last two years and more.
And while she admitted to dubbing the summit in her mind the “How dare you summit”, one hosted by French President Emmanual Macron, Mottley says it’s a meeting where it might be viewed as “how dare you upset the order? How dare you step out of your crease and summon us all to this inflection moment that will determine whether we will have the capacity and the will to bring pace and scope to the problem”.
Noting that there has been movement in recent times, as she says “nine months ago no one was speaking about natural disaster clauses” and now there are “people wanting to recognize the wisdom of it because countries do need to pause their debt payments if they are going to house and feed people who are victims of a climate crisis”, the Barbados PM says nine months ago “no one was talking about Multilateral development bank reform at scale and the World Bank was not as forceful in its commitment to the crisis of climate”, but now this rested in their hands along with the “need for pace and scope”.
Mottley says “what is required of us now is absolute transformation and not reform of our institutions”.
To her, action must look like what her team has formulated in the Bridgetown Initiative, one that is not based on the belief of them having the answers, but “the will to pull people together and say let us discuss these issues and let us make enough noise consistently to command the attention of those who must speak and who must act”. This she called on those present to not leave Paris without “understanding that the bolstering of the political ambition that is required, must secure transformation and not reform”, and urged heads of government and leaders, “to recognize that the world cannot continue in the shadow of an old Imperial order that does not see countries, does not hear countries or worse does not see, feel or hear people”?
She also warned that they could not just come to “Paris, but let their directors go back to the IMF for the World Bank and it be business as usual, as they do not act in their own interests, they act on behalf of sovereign States”.
The Barbados PM says its more than the need for money, but a call for reform of governance systems, as these institutions were founded when countries like hers did not exist, and therefore there was a “need for complete transformation of securing the sources of capital”. Admitting that it’s an unpopular view to be voiced, she says it is not asking for the bankruptcy of private companies, but asking everybody to share the burden so that the bounty can be shared. She added that “relying and holding only governments accountable had run its course”, “what is necessary now is to bring to the table also multinational corporations whose balance sheets dwarf more than two thirds of the world’s stakes”.
Mottley says “the bottom line is that we need to act with urgency with scale” and while “the Bridgetown Initiative still speaks to the fact that we need more innovative financial instruments, more guarantees, partial foreign exchange guarantees that will put behind us the overpricing of foreign exchange risk in terms of lending to the global South”.
She remains confident that she will see “movement on the private sector instruments in the private sector unlocking, but notes that the Bridgetown Initiative also calls for a significant scaling up of multilateral development banks.
In her world, what is needed is innovative mechanisms such as debt swaps for climate, or education or even health swaps, something she says her country did “with the help of IDB and The Nature Conservancy whereby reducing the cost of interest, the savings immediately went into a trust to be able to finance out the protection of a marine area”.
Meanwhile, she was sure to call out the “hypocrisy of the moment with respect to debt sustainability, found in the fact that almost every country in Europe if not every country is now facing debt with GDP ratios of over 90 percent”.
Mottley says “right now the IMF on the World Bank use 60 percent GDP, but that wasn’t a world that was not encountering a polycrisis moment and the reality is that if you ask countries to continue to go to 60 percent in a steep trajectory, you are going to kill the capacity of the country to fuel growth or sustain itself”. Likening it losing weight on a person, if the level of reduction is not sustainable, along with social institutions, you will implode as one can get over debt overnight, but rebuilding institutions overnight will not occur.
Mottley went on to add that the current circumstances gone from climate crisis to pandemic to Ukraine war leading to inflationary pressures and including actions of the inflation reduction act in the US, all created by developed nations, have led all less developed countries to face increase interest rates and increase difficulties and increase cost of living. She said the time was ripe for debt cancelation for the least developed countries of the world, “because to ask them to put debt upon debt upon debt is to choke them”.
She also cautioned focus only on climate change, and the pandemic, as these were aspects of the era that could be overcome, while the possibility always existed that there was always also going to be another issue, instead she called for shift to be placed on the reality of the world having “mature adult like conversations and the principles needed to be undertaken were not rocket science, but there within its capacity”.