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The backstory: Many countries in the Global South have been dealing with debt issues that make it harder for them to grow and catch up to wealthier nations. Add onto this problem the threat of climate change and the destruction of extreme weather events – which disproportionately affect less wealthy countries – and you get even more financial threats. Global development banks, like the International Monetary Fund (IMF) and the World Bank, have been under fire for not taking climate change into account when it comes to lending decisions. They’ve also been criticized for being under the thumb of wealthy countries like the US, leaving the countries most affected by climate change without much of a voice.
More recently: The US and Europe have recently been focusing on getting developing countries more financial support and aiding these debt problems. As China’s influence has been growing in more developing areas, the West is looking to counter that impact. Part of this effort includes taking another look at the way our global economic systems work.
The development: This Thursday and Friday, French President Emmanuel Macron is hosting an international financial conference in Paris called the Summit for a New Global Financing Pact. International figures in government, finance and activism are expected to be there. The main point of this summit is to figure out some new financial practices that take climate change into account. Ideally, this conference would result in some sort of plan to overhaul these global financial systems to create a new lending structure for getting developing countries what they need to deal with future climate change events and other threats, like pandemics.
The summit will include discussions on different issues, from financing green infrastructure to providing capital to countries most vulnerable to climate change in relation to an agenda called the Bridgetown Agenda, which is headed by Barbados Prime Minister Mia Mottley.
“The fight against poverty, the decarbonization of our economy in order to achieve carbon neutrality by 2050 and the protection of biodiversity are closely intertwined,” French President Emmanuel Macron said. “We therefore need to agree together on the best means to address these challenges in the poor and emerging countries of the developing world, when it comes to the amount of investment, to comprehensive reform of infrastructure like the World Bank, the International Monetary Fund, and public and private funds, and how to set a new process in motion.”
"We are moving to a world – I would call it the Bridgetown system of finance – [that] recognizes that we have to massively upscale the public sector and focus that on building resilience and adaptation because it's hard for that to be funded any other way," said Avinash Persaud, a special envoy for Mottley on climate finance.
“The international community’s responses are currently fragmented, partial and insufficient,” Barbados Prime Minister Mia Mottley said. “We therefore call for a fundamental overhaul.”