Paris, 23 June, 2023 (GNP): The World Bank (WB) on Thursday, announced financial facilitation for the vulnerable countries hit by natural disasters at the Paris Summit. Simultaneously, the International Monetary Fund (IMF) stepped up to provide $100 billion in Special Drawing Rights (SDRs) to support low-income states.
About 40 leaders including China’s Prime Minister, Brazil’s prime minister, and about a dozen from Africa gathered at the Paris Sumit to provide impetus to a new global finance agenda.
Moreover, the recent developments aim to assist in alleviating debt burdens, reforming post-war financial systems, and free-up funds to combat climate change by getting top-level consensus on how to promote several initiatives struggling in bodies like the G20, COP, IMF-World Bank, and United Nations.
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Antonio Guterres, the United Nations secretary general voiced his concerns stating, “The international financial architecture has failed in its mission to provide a global safety net for developing nations.” He also criticized the contemporary system as outdated, dysfunctional, and unjust.
According to a draft summit statement, the Leaders are primed to push for multilateral development banks like IMF and WB to assume more capital at risk to boost lending.
During a panel discussion, Ajay Banga, the newly appointed president of the World Bank, outlined a comprehensive “toolkit” to address the challenges faced by the nations.
At the Summit for a New Global Financial Pact, the World Bank Group announced a comprehensive toolkit on crisis preparedness, response and recovery.
— World Bank (@WorldBank) June 22, 2023
In his remarks to a panel on Thursday, new World Bank president Ajay Banga outlined a “toolkit”, incorporating offering a pause in debt repayments, giving countries the flexibility to redirect funds for emergency response, introducing innovative insurance solutions for development projects, and assisting governments in establishing advanced-emergency systems.
"I am very proud to announce a new debt pause option for countries suffering in the aftermath of a natural disaster. That was made possible because of YOU. You are the Bank stakeholders; you are the shareholders. This is actually YOUR Bank." Ajay Banga & @miaamormottley @GlblCtzn pic.twitter.com/DtbT0SE0TI
— World Bank (@WorldBank) June 23, 2023
While expressing his views, Ethiopian Prime Minister Abiy Ahmed stated, “We need a robust and predictable financial safety net.”
Highlighting the unprecedented funding constraints faced by African countries, he called for an increase in below-market financing and the provision of additional grants.
