|A few small island developing states made it to Paris to attend a unique Heads of State and ministerial conference to identify financial solutions for tackling poverty, curbing planet-heating emissions and protecting nature in the developing world. Amongst them was St. Kitts and Nevis’ foreign minister, the Right Hon. Dr. Denzil Douglas, who travelled to Paris to attend the event in what was described by the French Presidency as a ‘historic summit on international solidarity”.|
Some 40 heads of State and a similar number of ministers from both the developed and developing world were invited by French President Macron to a New Global Financing Pact Summit in Paris over 22-23 June last, along with leaders of multilateral development banks, such as the World Bank, international organisations like the OECD, WTO, the private sector, philanthropists, and international NGOs.
The tightly-packed day and a half summit work of high-level round-tables and 40 parallel events provided a distinctive opportunity for the developing and developed world to examine interactions between multilateral development banks reform, the mobilisation of private capital, climate finance, green infrastructures and solutions related to debt, all focused on developing and vulnerable countries across the globe.
Minister Douglas, who was accompanied by the Federation’s Ambassador to UNESCO in Paris, Dr. David Doyle, engaged in debates at the top platform on the second day of the Summit, sitting alongside Barbados Prime Minister Mia Motley, who has become a powerful advocate for redesigning the role of the World Bank and International Monetary Fund in an era of the climate crisis. He was also joined by other participants on the platform including United Nations Secretary-General Antonio Guterres, US Treasury Secretary Janet Yellen, IMF Managing Director Kristalina Georgieva, World Bank President Ajay Banga, EU President, Ursula van der Leyen, Brazil President Luis Inacio Lula, and South African President, Matamela Cyril Ramaphosa.
Under the co-chairs led by French President Emmanuel Macron and Barbados Prime Minister Mia Mottley, the Summit identified a key guiding principle of ensuring that “no country should have to choose between fighting poverty and fighting for the planet”, with a more prominent role for private capital envisaged aimed at scaling up of private capital flows to transform emerging and developing economies, for a net-zero and nature-positive world and to reduce inequalities more efficiently.
The Summit concluded with agreement and recognition that the target of $100bn Special Drawing Rights – a reserve asset created by the IMF – (or equivalent contributions) should be channeled to the most vulnerable countries, especially in Africa, and call for additional pledges.
All parties seem to coalesce around the likelihood that the target of $100bn of climate finance would materialize this year.
The Summit also sought commitments from the multilateral development banks to optimize their lending capacity increased to $ 200bn over the next ten years via their balance sheets and taking more risks.
Commented Minister Douglas: “We particularly welcomed the World Bank’s agreement to start suspending debt payments for countries hit by climate disaster, notably in the Caribbean region. However, we also noted that these ‘climate resilient debt clauses’ will only apply to new loan agreements, rather than being applied to existing loans”. Nevertheless, it is a constructive step in the right direction”.
“We applaud UN Secretary-General Antonio Guterres’ proposal for a stimulus of $500bn a year for investments in sustainable development and climate action”.
Minister Douglas took note of the future work priorities to be advanced with G20 and COP presidencies, in particular, the notion of including climate vulnerability in debt sustainability assessments of the World Bank and the IMF, including to enable more investment in adaptation to climate change.Upon the arrival of the Hon. Minister Douglas, he was appraised by Ambassador Doyle of the absence of any reference to small island developing states (SIDS) in the draft Summit Communiqué.
Explained Ambassador Doyle: “We sought to incorporate SIDS for concessional finance amongst the developing and vulnerable countries referred to in the Summit Vision Statement. A combination of socio-economic and climate-related factors continues to constitute unique threats to the health and welfare of small island developing states. Amongst the common challenges we face, as the 38-odd SIDS across the globe, are factors of relative isolation, acute vulnerability to weather, seismic, and oceanographic events, and low economic diversification.”
The St. Kitts and Nevis delegation to the Summit, liaising with four other small Islands representatives, secured an appropriate reference to SIDS in the final text, which calls for deepened “cooperation among and between MDBs and concessional windows and thematic funds to improve co-financing, facilitate countries’ ease of access to financing, streamline internal procedures, and achieve better leverage for low-income countries (LICs) mid-income countries (MICs) and Small Island Developing States”.