50 world leaders are gathering in Paris this week for the Summit for a New Global Financing Pact, an initiative of Barbadian Prime Minister Mia Mottley and French President Emmanuel Macron.
French officials say the two-day summit, which starts on Thursday, is designed to re-orient global financial institutions (like the International Monetary Fund and World Bank) around some key goals:
- ⛓️ Alleviating the growing debt burden on poorer nations, and
- 🚧 Supporting their development, while also
- 🌿 Helping them transition away from fossil fuels.
The idea is to address criticism that:
- Western-led institutions are inefficient and inflexible
- China’s lending saddles the poor with too much debt, and
- Wealthy nations aren’t helping with finance like they promised.
In response, this Paris summit is promising to get creative. For example:
- 🇧🇧 Barbados is proposing a two-year moratorium on debt repayments in the wake of natural disasters, and
- 🇫🇷 France is proposing an emissions tax on global shipping companies to help finance the energy transition.
Intrigue’s take: The challenge here is huge: poor countries are now spending more on interest payments than hitting their climate goals; the developed world was already missing its pledges to help, before COVID and the Russo-Ukraine war struck; and tired voters seemingly want concrete wins at home more than ethereal wins abroad.
So a bit of creativity is probably essential.
Also worth noting:
- Confirmed attendees include Kenyan President William Ruto, Ghana’s President Nana Akufo-Addo, Chinese Premier Li Qiang, US Treasury Secretary Janet Yellen, and EU head Ursula von der Leyen.
- Ajay Banga, the new head of the World Bank, says addressing climate adaptation and mitigation is one of his top priorities.