International consensus is growing between the countries of the north and the south, among the richest, the emerging and the least developed, on the urgency of building a financial architecture that allows, at the same time, to fight against poverty and combat the climate crisis effectively. A summit “for a new global financial pact”, held for two days in Paris at the initiative of President Emmanuel Macron, ended yesterday with very good intentions, but still modest concrete results.
More than forty heads of state and government, as well as leaders of global institutions such as the UN, the International Monetary Fund and the World Bank, attended Macron’s meeting. Although the agenda addressed overlaps with that which is already discussed in meetings of the G-7, G-20, the IMF or the COPs (monitoring of climate agreements), Macron wanted to open another forum additional Among others, South African President Cyril Ramaphosa was present, along with many of his namesakes from the continent, Brazil’s Lula da Silva, Egypt’s Al-Sissi, Chancellor Olaf Scholz and the Secretary of the Treasury of the United States, Janet Yellen. Pedro Sánchez was represented by vice-president Nadia Calviño.
During the summit there were strange seatmates. In the opening session, next to the Secretary General of the UN, Antonio Guterres, sat the Crown Prince of Saudi Arabia, Muhammad bin Salman, who is already accepted almost as normal on the international scene, less than five years after the brutal murder and dismemberment of journalist and dissident Jamal Khashoggi.
Among the tangible results, IMF Executive Director Kristalina Georgieva confirmed that the goal of redistributing the equivalent of $100 billion of Special Drawing Rights – the institution’s reserve assets, based on in a basket of currencies – in the most vulnerable and indebted countries. The president of the World Bank, Ajay Banga, also announced that work is being done on a clause that will allow indebted countries to stop repaying loans in the event of a natural disaster.
Yellen congratulated herself because the international financial architecture will be reformed “so that it is more reactive”. The US Secretary of the Treasury gave her support for multilateral development banks to increase their lending capacity by 200 billion dollars over the next ten years.
Among the points still to be finalized is the proposal, defended by Macron, of an international taxation taxing financial transactions, plane tickets and maritime transport. Many countries are reluctant to such taxes.
One of the most euphoric participants was Zambia’s president, Hakainde Hichilema, as a deal to restructure a $6.3 billion debt was announced during the summit, with the go-ahead from top creditor China. Hichilema admitted that Zambia has been a “guinea pig”, a precedent for similar agreements with other African countries increasingly dependent on Chinese investments.
