Paris, June 23: Poorer countries struggling with a growing debt crisis were thrown a lifeline at a global finance summit in Paris but the plans still fell short of the debt forgiveness programme that some had hoped for.
Progress was made on reforms that would help address the climate emergency, as nearly 40 world leaders and the heads of global institutions met in Paris for the summit, which ended on Friday.
Emmanuel Macron, the French president, called for global taxes on shipping, aviation and potentially on wealth in order to fund climate action. “Help us find all the countries which today have no tax on financial transactions and which today have no tax on plane tickets. Help us to mobilise at the International Maritime Organization [meeting to discuss a shipping tax] in July so that there is international taxation,” he told French broadcast journalists.
The incoming president of the World Bank, Ajay Banga, set out a new vision for the institution, which would combine its traditional focus on lifting people out of poverty with an emphasis on the climate crisis, which threatens to destroy progress on development.
“My view is the World Bank’s vision has to evolve to say, yes, we will create a world free of poverty, but on a livable planet, meaning we tackle climate, pandemics, fragility, food insecurity, things that reduce our ability to have quality of life, and to have hope and optimism,” he said.
But poverty and climate campaigners said few concrete measures had been agreed at the summit that would make a difference now. At least 52 countries are currently in debt distress, unable or close to unable to service their debts, driven higher by rising interest rates and a strong dollar.
Walter Mawere, an advocacy coordinator for Care International in Somalia, said: “It’s a disappointment. The summit did not go far enough to deliver for the people who bear the brunt of climate impacts.”
He pointed to the worst drought in 40 years in Somalia. “[We see] the harshest impacts of climate change every day. What can I tell them when I get home tomorrow? These international technical conferences must respond to this reality and hear our messages.”
The World Bank will pause debt repayments for countries struggling with climate disaster, but only on new loans. The UK will do the same for its existing loans, but only for 12 countries in Africa and the Caribbean.
About $100bn (£80bn) is to be provided to poorer countries through an instrument known as special drawing rights (SDRs), a form of currency provided by the International Monetary Fund. France, Japan and the UK were among the countries pledging varying proportions of their SDRs to poorer countries, amounting to about $80bn. A further $21bn could come from the US if the White House can get agreement from Congress.
Kristalina Georgieva, the managing director of the IMF, said: “We have a success story. Something we promised and it was delivered.”
The SDR cash is separate from the $100bn a year in dedicated climate finance that poorer countries have been promised to help them cut greenhouse gas emissions and adapt to the impacts of the climate crisis.
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