Mia Mottley builds global coalition to make financial system fit for climate action

In July, the Prime Minister of Barbados invited leaders to a retreat to discuss plans to increase international funding for the climate front. Now she’s asking the world for support

Barbados Prime Minister Mia Mottley is building a global coalition of nations committed to overhauling the financial system and unlocking trillions of dollars in investment for the climate front.

The leader of one of the world’s smallest nations is working to create a new global fiscal pact for vulnerable countries caught between financial stress and an inability to prepare for the next climate catastrophe.

In his speech to the UN General Assembly on Thursday, Mottley laid out a plan to transform the global financial architecture and make it fit to deal with the climate crisis. This is neither “an empty thought nor an arbitrary comment on our part,” said Mottley in the plenary hall in New York.

In fact, many in the room would have been familiar with what she is proposing. In late July, Mottley hosted a retreat in Bridgetown, the capital of Barbados, to brainstorm solutions and test her ideas.

The retreat was convened with senior UN officials including Deputy Secretary General Amina Mohammed, the Rockefeller and Open Society Foundations, academics and civil society. Canada’s Prime Minister Justin Trudeau tuned in virtually.

The result was the “Bridgetown Agenda” – a set of key messages to reform the World Bank and International Monetary Fund (IMF), institutions established at the end of World War II and still dominated by the US and Europe.

Since then, Mottley has taken a diplomatic initiative to rally support for the reform movement she launched in Bridgetown.

READ:  Dutton hits back at Marles who suggested the Coalition ‘has not placed us well’ as Labor tackles the cost of living crisis

Last week she traveled to the White House currently the plan to US Vice President Kamala Harris. Climate Home News believes Harris was open to some of the ideas.

On the sidelines of the UN General Assembly on Wednesday in New York, Mottley presented her case at a UN-organized round table of heads of state and government on climate protection.

The meeting was poorly attended by the leaders. There were no heads of government or delegations from wealthy nations. Instead, representatives of the EU Commission and the USA took part. But IMF chief Kristalina Georgieva was in the room.

“We can’t pretend day by day that someone else is making that change. This is our time to make that crucial difference,” she later told the UN Hemicycle.

“And a lot of the things that are being put before us today don’t require money, but they do require commitment and they require political will.”

The reform plan is based on a new form of internationalism that seeks solutions that transcend national borders, Avinash Persaud, one of Mottley’s closest advisers and the mastermind behind many of the proposals, told Climate Home.

“The world will not move forward with country-by-country commitments. It will evolve through a global movement and global projects,” he said.

READ:  Preity Zinta in Bathing Suit Enjoys "Sun, Sea, You and Me" — Celebwell

For Mottley and her team, the financial system is unable to provide developing countries with the funds they need to invest in resilience, address climate change and achieve development goals while vulnerable nations face mounting debt.

According to the World Bank, almost 60% of the world’s lowest-income countries were already in a debt crisis or at high risk of one before the start of the Russian war in Ukraine. Rising costs have made the situation worse.

Persaud has warned that “a silent wave of financial strains is sweeping world markets and will soon collapse onshore,” with far-reaching consequences.

Meanwhile, climate-vulnerable nations from Pakistan to Puerto Rico are facing growing costs to recover from climate catastrophe and prepare for the next.

“In order to get away from it, we have to finance ourselves in the long term. This has to be the global movement of our time now,” Mottley said at an event in New York organized by the Bill & Melinda Gates Foundation.

Mottley’s proposal is based on a three-pronged approach, Persaud told Climate Home.

The first step is to prevent a debt crisis with emergency IMF support and long-term concessional financing for development, lent for at least 30 years to prepare for the future.

Money should be available not just “after a disaster, but before a disaster,” she said, citing World Bank research that for every dollar spent on resilience, many lives could be saved and $7 in costs avoided.

READ:  NHS Poll result: Should UK switch to a private insurance-based health system? YOU VOTED

This, she said, will require greater redistribution of Special Drawing Rights (SDRs), the IMF’s reserve assets expended to provide assistance during the pandemic, from wealthy nations to those who need it most.

Last year, the IMF injected $650 billion in SDRs into the global economy to help countries recover from the Covid-19 pandemic. The IMF set up a $45 billion Resilience and Sustainability Trust for rich nations, which received most of its support to redirect funds to developing countries.

Mottley and her supporters are calling for at least $100 billion to be redistributed.

Mia Mottley: the “fearless” leader driving a global solution to the climate front

The second step is to expand the lending capacity of multilateral development banks to developing countries by US$1 trillion to invest in climate resilience. This includes allowing banks to hold SDRs for lending.

The third step is to develop long-term instruments that can mobilize $3-4 trillion in finance for carbon reduction projects and a recovery grant mechanism to help nations recover from climate-related disasters.

Some of the money could come from the IMF, which agrees to re-issuance of $650 billion worth of SDRs – a threshold that does not require US Congress approval.

The next push for Mottley will be the annual meetings of the IMF and World Bank, which begin next month.

As the largest shareholder of both institutions, she needs the US government on board.

UN chief António Guterres has made it clear that he supports Mottley’s agenda. Speaking to the press on Wednesday, he called on Washington to “stand behind these ideas now.”

Source link