U.N. Secretary General, Antonio Guterres has called for sweeping reform of the international financial system that will allow low-income countries vulnerable to climate calamities receive adequate funding from richer nations.
The UN boss made the call at a conference in Geneva where officials representing about 40 governments, private donors and financial institutions met to discuss rebuilding efforts for Pakistan who had suffered great loss from flood last year.
During the meeting, Guterres said that the international financial system was skewed to benefit wealthy countries and should be reformed to ensure a more equitable distribution of resources.
“It is very clear that the present system is biased. The system was conceived by a group of rich countries and naturally it basically benefits rich countries,” he was quoted to have said regarding a “morally corrupt global financial system”.
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Guterres was speaking alongside Pakistani Prime Minister Shehbaz Sharif, who said Pakistan needed $8 billion from the international community over the next three years to support recovery efforts after floods that killed at least 1,700 people, displaced millions and damaged critical infrastructure.
“We need a new debt architecture and we need to make sure that debt relief is effectively provided by the system even to middle income countries that are on the verge of very difficult, very dramatic situations including suspending payments,” Guterres added.
Meanwhile, delegations from the International Monetary Fund met with Pakistan’s finance minister on the sidelines of the conference, but has yet to approve the release of $1.1 billion originally due to be disbursed in November last year and has left Pakistan with only enough foreign exchange reserves to cover one month’s imports.
Guterres condemned the inaction of global leaders and the paltry sum they invest to combat climate emergencies and called for the vulnerability of countries to be taken into account when major financial institutions distribute below-market-rate financing.
“We need to redesign our financial system in order to be able to take into account vulnerability and not only GDP when decisions are made about concessional funding to countries around the world,” he said.
Story was adapted from Reuters.
