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PM Mottley calls for reform of multilateral development banks at COP27

GeneralPM Mottley calls for reform of multilateral development banks at COP27

Photo: Mia Mottley, Prime Minister of Barbados

SHARM EL-SHEIKH, Egypt, Wed. Nov. 9, 2022

“The talk must come to an end,” Prime Minister of Barbados, Mia Mottley stated during her speech at the opening of the World Leaders Summit of COP27 (the 2022 UN Climate Change Conference). The conversion of ambition to action has been touted as the goal of this conference, but as Mottley pointed out, the question confounding many nations such as hers is why the globe is not moving forward despite the collective capacity to transform the way things are done to prevent further global warming.

“We are in the country that built pyramids. We know what it is to remove slavery from our civilization; we know what it is to find a vaccine within two years when a pandemic hit us; we know what it is to put a man on the moon, and now we are putting Rovers on Mars. We know what it is. But the simple political will that is necessary not just to come here and make promises, but to deliver on them, and to make a definable difference in the lives of the people whom we have a responsibility to serve seems still not to be capable of being produced,” PM Mottley remarked.

She pointed out that while developing countries may have high ambitions, they are largely not able to achieve those goals due to the fault lines in the global industrial sector. The ability for developing states to access new innovative technologies and equipment is constrained, she says, “by those countries that have the dominant presence and can produce for themselves.”

“But the global south remains at the mercy of the global north on these issues”, Mottley said.

In regard to the importance of access to capital for developing countries, she noted the disparity in lending interest rates to countries – saying that the global north borrows at interest rates between 1 and 4%, while the global south borrows at a rate of approximately 14%.

Mottley said that the establishment of a climate mitigation trust that unlocks 5 trillion dollars of private sector savings is a possibility if the political will to use the Special Drawing Rights (SDR) from the International Monetary Fund would be exercised.

“We believe that that requires a change in the attitude of congress, because the agreement that establishes the International Monetary Fund requires 85% to change that agreement, and if the United States holds 17% of the quota, then it can’t be done, Mr. Gore, without your caucus,” she stated.

The need for a renewed commitment to unlocking concessional funding was also highlighted by PM Mottley. She stated flatly that there is no way that developing countries can fight climate change without concessionary financing, and she also emphasized the need for the establishment of a fund for compensation for losses/damage suffered due to global warming. She further went on to say that non-state parties, and private companies — especially those involved in the traditional energy sector — must also do the right thing.

“We believe that the non-state actors, the stakeholders, the oil and gas companies, and those who facilitate them need to be brought into a special congregation between now and COP28. How do companies make 2 billion dollars in profits in the last three months, and not expect to contribute at least 10 cents to every dollar of profit to a loss and damage fund? This is what our people expect,” PM Mottley pointed out.

Mottley also suggested that countries place clauses in various debt instruments to make provisions for the impact of extreme weather, natural disasters, and pandemics, and noted that some of these provisions have already been included in debt facilities that her own country has signed onto.

“I have said that if Barbados is hit tomorrow, because we have natural disaster clauses, God forbid, if we are hit tomorrow, we unlock 18% of GDP over the next two years, because what we do is effectively put a pause on all of our debt for two years and we pay back that money to the end, but what we get is the flexibility in the first two years to address issues of damage and loss,” she shared.

She called for a revisiting of the Bretton Woods Institutions of 1944 for a reforming of the multilateral development banks.

“It is time for us to remember that those countries who sit in this room today, did not exist at the time that the Bretton Woods Institutions were formed for the most part, and therefore we are not seen, we are not heard sufficiently, and if we are to rise to the occasion to play our part to stop the tragic loss of life that we have seen on these planes and to impact on livelihoods that we are feeling across our countries, then there needs to be a new deal,” PM Mottley said.

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