EU (common Wealth) _ The World Bank said Thursday that it will make it easier to finance countries devastated by natural catastrophes, as the International Monetary Fund revealed that it had met its aim of making $100 billion in special drawing rights accessible to vulnerable states.
The two pronouncements came at a meeting in Paris of 40 leaders, including a dozen from Africa, China’s prime minister, and Brazil’s president, to lend impetus to a new global financial agenda.
It aims to increase crisis financing for low-income countries and reduce their debt burdens, reform post-war financial systems, and free up funds to combat climate change by reaching top-level agreement on how to promote a number of initiatives that have been stalled in bodies such as the G20, COP, IMF-World Bank, and UN.
After more than two years of negotiations, Zambia’s creditors said this week that a restructuring proposal was virtually ready.
The international financial architecture has clearly failed in its duty to provide a global safety net for developing countries, according to United Nations Secretary General Antonio Guterres, who described the system as outmoded, dysfunctional, and unjust.
According to a draft summit statement obtained by Reuters, leaders are poised to support a push for multilateral development banks such as the World Bank to put more capital at risk in order to increase lending.
In remarks to a panel on Thursday, new World Bank President Ajay Banga outlined a “toolkit” that includes allowing countries to redirect funds for emergency response, providing new types of insurance to help development projects, and assisting governments in developing advance-emergency systems.
We need a strong and reliable financial safety net, Ethiopian Prime Minister Abiy Ahmed said at the conference, pushing for additional grants and increased access to below-market finance.
African countries are suffering unprecedented financing constraints, which has exacerbated vulnerabilities, he claims.
