The international financial architecture is no longer sufficiently adapted to deal with the growing inequalities, climate change, biodiversity erosion and public health challenges prevalent in the 21st century.
To help the most exposed countries exit the COVID crisis, deal with the consequences of Russian aggression in Ukraine on their food and energy security, and cover the very high cost of climate transition and consequences of extreme climate events, it is necessary to scale up finance.
The global financial system inherited from Bretton Woods has reached its limits. We have to act fast and join efforts. We are therefore now calling for a review of our software and for a shake-up of finance. We must together drive change in our global financial system to make it more responsive, just and inclusive, fight inequalities, finance the climate transition and biodiversity protection, and move closer to achieving the United Nations Sustainable Development Goals (SDGs).
This is the objective of the Summit for a New Global Financing Pact, which will be held on 22 and 23 June in Paris. This Summit intends to be inclusive, with every country, every opinion and every proposal being able to be expressed.
This Summit is part of a positive momentum. The launch of reform by the World Bank, the G20 Presidency of India and that of Brazil right after, the SDG mid-term review and commitments made at COP are all reasons for hope to build on this momentum. We have proposed and obtained the issuance of $100 billion in IMF Special Drawing Rights for the most vulnerable countries. All countries in a position to do so must take part in this effort. Several multilateral development banks have begun to respond to the G20’s requests and have implemented initial measures to optimize capital to increase their lending capacity.
But we must now go even further, following the example of the Bridgetown Initiative, a set of innovative solutions spearheaded by Barbados to address climate vulnerability affecting many middle-income developing countries.
We will promote a reform agenda for development banks and the IMF to provide more finance to countries in the most need as well as global challenges.
To be more effective, our international financial institutions should be able to do more than they are currently doing to work better together, while better mobilizing private savings. To be more inclusive, we must above all give a greater voice to the most vulnerable countries in international fora.
The Summit for a New Global Financing Pact highlights global finance challenges and the many leaders participating will give the impetus needed to carry out the transformations our system requires. Rwanda’s high-level participation to the Paris Summit is the testimony of the country’s determination to play its part to improve the global climate finance architecture and share lessons from its own experience.
We do not have to choose between fighting poverty, tackling climate change and its impact and protecting biodiversity. A just transition is the only answer.