Watch – E3G, Global Citizen, ACET press conference
E3G Press release
- The summit for a New Global Financing Pact has concluded after two days of strong calls from developing country leaders to transform the international financial architecture.
- Hosts, France are expected to publish a Multilateral Development Bank Vision Statement from shareholder countries, a summary outcome document and roadmap.
- Tackling debt is the key missing piece of the puzzle leaving much left to do to truly address the flaws in the global economy. Minimal new finance or immediate action from richer countries leaves a long path to rebuild trust.
Leaders’ conclusions at today’s Paris Summit show Barbados and V20 (The Vulnerable Twenty) calls for transformation of the global finance system are now firmly global.
But the energy, the dynamism and the big new ideas continue to come from developing countries – outside of the world’s most powerful decision-making bodies. Beyond the formal outcome documents, Kenyan and Colombian leaders brought new ideas on tackling debt, Barbados brought innovations on managing the disproportionately high costs of borrowing for developing countries. Calls to reform the governance of these decision-making institutions were common.
Few financing deals were concluded to get money moving immediately, beyond commitments to use climate resilient debt clauses to give developing countries breathing room on debt repayments when climate disasters hit, some new pledges to re-channel special drawing rights (the IMF reserve assets that were released during COVID to help governments manage their balance sheets), a debt deal with Zambia and just energy transition financing partnership with Senegal.
A roadmap is expected to set out milestones for delivering new debt treatments, new finance injections as well as reforms to multilateral development banks’ lending, and other innovations to mobilise more private sector capital. But the gaps on managing the bigger problems of debt are left to be addressed at further summits – Kenya’s President Ruto invites leaders to address the gaps at the Africa Climate Summit in Nairobi in early September.
Few leaders from the world’s richest countries made the journey, many sending ministers instead. In contrast, the new head of the World Bank joined the heads of other institutions in showing support for rapid action. Overall, momentum is there and milestones to hold these leaders and the heads of institutions accountable to.
Commenting on the outcome Nick Mabey, Co-CEO at independent climate change think tank E3G said:
“The Paris Financing Summit has raised expectations of a radical overhaul of the global financial system. The challenge now is executing this vision over the next year which will require intense diplomacy and tough decisions. But without decisive action more people will unnecessarily suffer from growing crises and global political fragmentation will accelerate.”
On Multilateral Development Bank reform, Sonia Dunlop, IFI Programme Lead at E3G said:
“The MDBs needed a mandate. A mandate to evolve towards global public goods, a mandate to seek further capital injections – and a push and a shove to be more creative in their use of their Capital Adequacy Frameworks. They got all three.”
On debt and Special Drawing Rights, Dileimy Orozco, Senior Policy Advisor at E3G said
“It is refreshing to see the leadership from borrowing countries to find solutions on debt to lift the world up and forward – a must if the world is to be more prosperous. Delivering on SDRs is moving slowly, developed countries should push the boundaries of what’s possible.”
On mobilising private finance for climate and development, Franklin Steves, Senior Policy Advisor at E3G said:
“Global South leaders brought a real energy and host of potentially transformational proposals to Paris, which if implemented could start to mobilise private finance to emerging markets and developing economies at the scale required to avert climate disaster. Leaders from the rich countries now need to step up and help to deliver.”
On getting more from the private sector, Frank Schroeder Senior Policy Advisor at E3G said:
“Just agreeing an agenda is not enough. There needs to be a literal downpayment by developed countries to open fiscal space for development and climate now. The levers on which to mobilize much larger capital have been identified but they need public finance to be activated.”
Available for comment
Dileimy Orozco (EN, SP), (history in government, development banks and private finance and co-author of the seminal UNECA Green Recovery Report in 2020. Leads E3G’s policy strategy on IFA reforms.)
+44 7876 301 615, firstname.lastname@example.org
Franklin Steves (EN, RU, ES, FR), (strong background in development finance working directly in and with MDBs and consulted on countries’ economic governance policy. Leads E3G’s work building coalitions and networks to deliver the necessary shift in climate and development financing.)
+44 7484 815 434, email@example.com
Sonia Dunlop (EN, FR, IT), (deep experience of government processes and development financing having worked across UK government, parliament and EU institutions as well as in the solar industry. Leads E3G’s Public Banks programme aiming to Paris align all IFIs.)
+44 7970 795 278, firstname.lastname@example.org
Alex Scott (EN), (background in national and local government and climate governance campaigning, and facilitator of the climate and development ministerials. Leads E3G’s campaigns on IFA reform and multilateral diplomacy.)
+44 7482 750760, email@example.com
Notes to Editors
- E3G is an independent climate change think tank with a global outlook. We work on the frontier of the climate landscape, tackling the barriers and advancing the solutions to a safe climate. Our goal is to translate climate politics, economics and policies into action. About – E3G
- For further enquiries email firstname.lastname@example.org or phone +44 (0)7783 787 863