UN Secretary General admits dysfunctional financial architecture
ADDIS ABABA- The global financial system needs ambitious reforms to address the inequitable and dysfunctions that mainly affects developing countries, Ethiopian Foreign Minister urged in a meeting where the UN Secretary General also admitted the assertion.
Speaking at the opening of the first preparatory committee conference for the Fourth International Conference on Financing for Development (FfD4), Foreign Minister Ambassador Taye Atske-Selassie said that the Addis Ababa Agenda is not being fully implemented as anticipated so that it needs to search for another ways to implement the pledge made a decade ago.
He mentioned that poverty and hunger are on the rise and geopolitical tensions are affecting global security and undermining multilateralism.
Covid-19 Pandemic aggravated the debt crisis in most developing countries and has led to a decline in government revenues and these countries also lack financial resource to effectively respond and mitigate the effects of climate change, he stated.
Existing financial mechanisms, such as government aid and climate funds are inadequate, fragmented unresponsive to the special needs of developing countries, Taye indicated.
“In evaluating the reasons for failure to deliver on the promise of the sustainable government agenda, it is fitting to mention the words of the UN Secretary General, who warned us that without massive investment or vision of creating a world free of poverty would remain elusive. The preparation for the fourth international conference on financing for development in Spain to be held next year, it is upon us to identify the gaps in the implementation of the Addis Ababa action agenda,” he remarked.
This process should lead to the adoption of a transformative and ambitious financial framework to achieve the sustainable development goals as promised and agreed in 2015, he added.
The FM also underlined the need to recognizing the abundance of sufficient financial sources to meet the 2030 agenda. The only thing that the international community lacks here is the political will. The financial architecture should be reformed to be more inclusive and equitable.
“We also must revamp efforts to combat illicit financial flows and we should enhance endowers on international tax cooperation. Moreover, developed countries should enhance climate financing including by operationalizing the loss and damage funding mechanisms.”
UN Secretary General, Antonio Guterres, on recorded video, also transferred his message that the global financial system needs reforms, saying, the existing architecture is outdated and inequitable.
“Despite progress, we must face facts. Many commitments remain unfulfilled. Meanwhile, the world is facing shocks that make financing challenges harder to solve. On the other hand, geopolitical divisions undermine collective action faced with sky-high debt burdens and cost of capital. Developing countries have limited prospects of financing the sustainable development goals,” he noted.
The fourth International Conference on Financing for Development provides a unique opportunity to tackle these challenges. It opens the door for world leaders to adopt ambitious reform to deliver affordable long-term financing and presents a unique opportunity to reform an international financial system that is “outdated, dysfunctional and unfair ” from the tax and debt architecture, to the system of public development banks to trade an investment rules, to the financial safety net and global governance, he mentioned.
“We need the best ideas to inform discussions and maximum political will to act.I count on all of you to move forward with the determination to rescue the 2030 agenda. And together, we can deliver, not only a financial system but a world that is more just, equitable and sustainable,” he said.
BY YESUF ENDRIS
THE ETHIOPIAN HERALD TUESDAY 23 JULY 2024
