The Summit for a New Global Financing Pact concluded in Paris last week with over 100 world leaders committing to various plans to generate more funding to reach the Sustainable Development Goals by 2030 and counter climate threats. The outcome? Many discussions on how inaction is not an option anymore but few concrete announcements.
Since May, as part of the #GameChangers2030 campaign, Results Canada’s volunteers and allies have been advocating for Canada to champion ambitious reforms to the world’s development financing institutions like the World Bank and the International Monetary Fund (IMF). Here is an overview of the positive steps forward and negative steps back on our two main asks:
the ask
For Canada to rechannel 40% of its Special Drawing Rights (SDR) – a special asset issued by the IMF mostly to rich countries that don’t need them. These should go to low- and middle-income countries in Africa, Asia, Latin America and the Caribbean to strengthen their health systems, combat poverty, and better prepare for future pandemics and other emergencies.
the good
Leaders at the Summit recommended the creation of a tracker on SDR reallocation to monitor progress towards the 20% target for SDR rechanneling to vulnerable countries by the next meeting of the G20 Finance Ministers in July – which Canada is a part of. While Canada has rechannelled up to 40% of its SDRs, 56% of these have been loaned to Ukraine, and only 18% went to Africa, Asia, or Latin America and the Caribbean. This is much lower than the commitments made by a majority of rich countries.
the bad
The IMF’s Managing Director Kristaline Georgieva’s closing remarks at the Summit, stated that their goal of rechannelling US$100 billion in SDRs had been reached. However, what went unsaid was that this also includes a theoretical pledge of US$21 billion by the US administration that is not supported by Congress and has yet to happen after nearly two years. Also, Canada did not announce a pledge to rechannel additional SDRs to countries in Africa, Asia, Latin America and the Caribbean.
the ask
For Canada to champion the inclusion of natural disaster and pandemic debt suspension clauses in all new loans to low- and middle-income countries. This will allow countries facing a pandemic or a climate-related disaster to postpone repayment of debt until they have had the time to deal with the emergency
the good
The UK, France, United States, Spain, Barbados, World Bank Group, and Inter-American Development Bank launched a call to action to bilateral, multilateral, and private sector creditors to offer natural disaster debt clauses by the end of 2025. Some committed to offering the clauses by this November’s United Nations Climate Change Conference – commonly referred to as COP28
the bad
Although some institutions have chosen to include pandemics as part of their definition of natural disasters in their debt clauses, the Summit did not do so with the call to action for debt suspension.
Overall, the Summit showed that there is still a lot of advocacy required to ensure Canada and the world champion bold reforms in the global financial system to reduce debt, reverse inequities, and ensure more funding is available to invest in health, education, and poverty alleviation in the most crises-affected countries. Results Canada will continue to track this and push Canada to be a #GameChanger by doing better and more at key global moments.
