UN Secretary-General Antรณnio Guterres reveals the worldwide financial landscape is in need of major repair, with dozens upon dozens of countries in dire economic straits.
In a speech at the G7 summit in Japan, Guterres stated that although organizations like the International Monetary Fund (IMF) are following the law and operating by the book, worldwide financial regulations themselves are unjust and immoral.
โThe IMF allocated $650 Billion in Special Drawing Rights โ or SDRs [since 2020].
The G7 countries, with a population of 772 Million people, received $280 billion. The African continent, with 1.3 Billion people, received only $34 billion. And this was done reportsย by the rulesโฆ
Aroundย theย globe, 52 countries are in technical default, at high danger of default, or face incredibly expensive market financing. Middle income countries, including numerous small island developing states โ with few exceptions โ doย not qualify for concessional financing and have no access to debt relief.โ
Guterres reveals theย present worldwide financial system, which was in large part created by delegates from 44 countries in Bretton Woods, New Hampshire back in 1944, is in need of a major update.
โThe worldwide financial architecture became outdated, dysfunctional and unfairโฆ
Itโs time to reform both the Security Council and the Bretton Woods institutions. This is essentially a question of redistributing power in line with the realities of todayโs world.โ
Within theย present financial structure, Guterres reveals plenty can still be done.
He outlines a UN proposition thatโs designed to combat climate change by offering a new debt-relief and financing mechanism for developing nations.
โWe have proposed a Sustainable Development Goals (SDG) stimulus that would provide an effective mechanism for debt relief and scale up longstanding and contingency financing.
If multilateral development banks would work together and changed their business models and approach to danger, they could leverage enormous amounts of private finance for developing countries at reasonable cost.โ
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