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Rethinking Humanitarianism | How a small island nation is leading the charge for more equitable global governance

Barbadian Prime Minister Mia Mottley’s ambitious plan is changing the conversation around debt and disaster relief.

How a small island nation is leading the charge for more equitable global governance

For many countries in the Global South, tackling today’s interlocking crises – climate change, the pandemic, the rising cost of living supercharged by Russia’s invasion of Ukraine – is made practically impossible by sky-high interest rates on runaway government debt.

Enter Barbados.

No world leader is being invoked more at the moment than Barbadian Prime Minister Mia Mottley, along with her ambitious plan to change the global financial system to end this crippling debt and build climate resilience: the Bridgetown Agenda. 

For this episode of our podcast, Rethinking Humanitarianism, host Heba Aly sits down with two people close to the plan: Avinash Persaud, Mottley’s special envoy on finance and investment; and François Jackman, the island nation’s UN ambassador.

"We don't use the word reform too much, because for 50 years, countries have been saying reform, and that just leads to nothing,” Persaud tells Aly. “But we say there are five things that you can do. And if you did those achievable things, it would actually redraw the global financial system."

Launched in September, the Bridgetown Initiative (as it is also known) lays out a step-by-step roadmap that begins by pressing the International Monetary Fund and other international financial institutions to unlock financing on more palatable terms for crisis-hit countries so they can better prevent and respond to disasters. It also calls for the setting up of a global mechanism to accelerate private sector investment in mitigation and reconstruction.

Can this tiny Caribbean country of 300,000 people reform the international architecture around government debt and disaster relief?

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TRANSCRIPT | How a small island nation is leading the charge for more equitable global governance

Heba Aly

Nearly 80 years ago, after a devastating Second World War, a new global financial system, known as the Bretton Woods architecture, gave the countries destroyed by the war generous financing to rebuild. A Marshall Plan backed by the US added to that support. And Western European countries had decades to pay it all back. Today, developing countries hit by conflicts and disasters get financing under much less favorable terms. One of them is Barbados, a Caribbean nation at the frontlines of the climate crisis. At the UN General Assembly this year, Barbadian Prime Minister Mia Mottley gave a passionate speech about the need for a new global financial architecture.

Mia Mottley, Prime Minister of Barbados: "Financing for development cannot be short-term financing… and that it needs to be at least 30-year money. The world recognized that when it allowed Britain to be able to participate in the refinancing of its world war bonds which were only paid off eight years ago – 100 years after World War One started. Or when it allowed Germany to cap its debt service at the equivalent of five percent of its exports conscious that the cataclysmic experience of war would not have allowed them to finance reconstruction while repaying debts incurred for war. My friends, we are no different today. We have incurred debts for COVID. We have incurred debts for climate. And we have incurred debts, now, in order to fight this difficult moment with the inflationary crisis and with the absence of certainty of supply of goods. Why, therefore, must the developing world now seek to find money within 7 to 10 years when others had the benefit of longer tenors to repay their money? 

Heba Aly

It’s a refrain we’ve been hearing more and more from countries in the Global South: that today’s global financial system simultaneously helps and preys upon countries at their moments of greatest need. We live in an era of multiple, inter-related crises: climate change, the COVID-19 pandemic, rising costs of living, protracted conflicts – and all these crises require of countries significant resources to be able to respond. But rules of the World Bank and International Monetary Fund often cripple the Global South, in particular, from adapting to and mitigating these crises because they spend much of their money paying back debts. So in that speech at the UN General Assembly, Prime Minister Mottley put forward a proposal

Mia Mottley, Prime Minister of Barbados: We had the good fortune of collecting in Barbados a large number of persons from civil society in academia at the beginning of August, end of July. And we settled on what we have come to call the Bridgetown Agenda, because we believe it to be a Bridgetown Agenda for peace, a Bridgetown Agenda for prosperity, a Bridgetown Agenda inspired by love of humanity. And it is that agenda that speaks to the reform of the Bretton Woods architecture. 

Heba Aly

What is the Bridgetown Agenda? And can this idea from a small Caribbean nation of less than 300,000 people really reform the entire global financial architecture?

From Geneva, Switzerland, this is Rethinking Humanitarianism. I’m your host, Heba Aly.

Barbados was first occupied in 1627 and remained a British colony until its autonomy was granted in 1961.Mia Mottley has become somewhat of a celebrity politician since she became prime minister in 2018, calling – with oratory panache – for a more equitable global order on the world’s biggest stages, from the UN General Assembly to COP27. Since we started exploring on this podcast what a new world order could look like on this season of the podcast, no name has been invoked more than Mottley’s. She's been lauded for her leadership in climate justice, for her bluntness in calling out ongoing colonialism in global institutions like the UN and the World Trade Organization.

This fall, Mottley announced the Bridgetown Agenda – her plan to radically reformulate the long-entrenched international monetary system known as the Bretton Woods architecture. That includes institutions like the World Bank and the International Monetary Fund, created to stabilise world markets after World War Two, but still disproportionately controlled by the winners of that war nearly 80 years later. The agenda is named after the capital of Barbados, Bridgetown, which Mottley’s grandfather served as its first Mayor. But its scope goes far beyond the small island nation. Her aim is that all developing countries can deal with an era of polycrisis without succumbing to mounting debt.

To understand this ambitious plan I can think of no better person to speak to than its very architect, Avinash Persaud is an economist and professor. He is Mia Mottley’s Special Envoy on Investment and Financial Services, and he Chairs the Commission on the Economy of the grouping of Caribbean states known as CARICOM. He joins us from outside Bridgetown. Avinash, welcome to the Rethinking Humanitarianism podcast.

Avinash Persaud

Hello.

Heba Aly

We are also joined by François Jackman, the Permanent Representative of Barbados to the United Nations in New York City. He has worked for the government of Barbados since 1995, most recently as its ambassador to China. And he joins us from New York. François, welcome.

François Jackman 

Thank you very much.

Heba Aly 

Avinash, your relationship with Prime Minister Mottley goes back, way back, sorry to date you, to your days as students at the London School of Economics more than 30 years ago. Take me back to your earliest conversations about Barbados and the global financial architecture and what preoccupied you in those days.

Avinash Persaud 

Well, we weren’t talking about the global financial architecture back in the 1980s. I was gripped with anti-apartheid. I was heavily involved in anti-apartheid politics and leading an occupation of the London School of Economics to get rid of their investments in South African-related firms, being taken to the High Courts of Justice, and being egged on Mia Amor Mottley. But the CARICOM Caribbean community was less engaged in UK politics, whilst the LSE Student Union was very UK politics-focused. So we really only began talking about the Caribbean and Caribbean development many years later, when she invited me to start doing some work on developing the financial sector in Barbados. I guess that was around 2010 or so. I think what really changed our relationship is the 2017 hurricane season…

World Meteorological Organization, ‘Caribbean 2017 Hurricane Season Review’

“High-powered, high-impact hurricanes – including Harvey, Irma, and Maria – left a path of destruction in more than a dozen territories in the Caribbean [...] climate change is modifying the intensity and frequency of extreme events…”

Avinash Persaud 

… in the Caribbean. It was an unusual season. We had two Category Five hurricanes within two weeks. Normally, that's a once-in-1000-year event. And she, being she, sort of said, I had to go to Dominica.

World Meteorological Organization, ‘Caribbean 2017 Hurricane Season Review’

“Hurricane Maria was the first Category Five hurricane to strike Dominica, leading to major destruction

there .

>> We were in front of the hurricane, but we really didn’t think that it would be so serious.”

Avinash Persaud 

She called up the Prime Minister of Dominica and said I had to go and help them revive, recover from this devastating hurricane. They lost 226% of GDP in four hours.

World Meteorological Organization, ‘Caribbean 2017 Hurricane Season Review’

“When that Maria started, light went off, DBS went off, there was no communication

Avinash Persaud 

And that whole process really educated me and her about climate, about some of the challenges we had in raising the finance to respond to the events, to build resilient countries.

World Meteorological Organization, ‘Caribbean 2017 Hurricane Season Review’

“It really wasn't easy having to deal with a storm or hurricane one week and a few days after you have to deal with another one, and then another one. It really was a test of the resources of the of the country.”

Avinash Persaud 

And also the urgency of climate mitigation around the world. So even though we can't do much mitigation, so much removal of greenhouse gases, we are so dependent on that. She has been trying to form a new coalition, rather than the traditional small island states – that's a grouping we're very proud to be part of – but we're also belonging to something called the frontline states, which is a coalition of countries that lie between the tropics of Cancer and Capricorn, but 40% of the world's population, about 3.2 or 3.3 billion people. And these are people most acutely vulnerable to climate change. And so we've been focused on this group and how we can create instruments to help them respond to loss and damage and to build resilience.

Heba Aly 

And I imagine the Bridgetown Agenda is one of the outcomes of that. You have been described, and I quote, as “a fount of possible solutions churning out or delving into economic innovations you think might save the world”. So what is this Bridgetown Agenda, exactly? And I am a layman in this regard, I'm no economist. So help us understand it for those who aren't steeped in economics the way you are.

Avinash Persaud 

The Bridgetown Initiative is made up of around nine proposals. It's roughly split between proposals to address the current debt crisis – there is a silent debt crisis ripping through developing countries at the moment, triggered by rising US interest rates on the back of the COVID debt, and this has been transmitted across the world by the strong US dollar. So the first four points of the Bridgetown initiative is the kinds of things the IMF should be doing to be much more proactive in responding to this global debt crisis. They need to expand the emergency liquidity facilities. They need to suspend their extra interest rate surcharges for people who are borrowing. They need to rechannel something called Special Drawing Rights – which is the IMF’s currency, which they give to various countries. The vast majority of the SDRs, Special Drawing Rights, end up with countries that don't need them, so there's a rechanneling process of sending them to countries that do need them. And so that's the first part of the Bridgetown initiative. It's really short-term responding to the current crisis. It's about being reactive. And we're trying to say, the model here is the way governments responded to the banking crisis. And we are worried that the governments were quick to respond to the banking crisis, and being slow to respond to this debt crisis.

Mottley at IPI: One in five countries is experiencing fiscal and financial stress.One in five. Global leaders are, I would like to think, now experienced in managing crises. They know what to do and they have the means necessary. We must act now. Not next year or the year after, or when the next set of leaders comes. We cannot be good at rescuing banks but bad at saving countries.

And it's partly by design. By being slow and being reactionary, it gives the institutions greatest influence and power. If they treat every country on a case-by-case basis after they've had a disaster, then they would have much greater influence on their recovery, their policy, environment. Whilst what we did with the banks is we said “We don't care if you're in trouble or not, any bank could get access to cheap funding any time”. And that helped to reduce the pressure, the tensions in the marketplace. And once they announced that back in 2009, if you may recall, it really eased a lot of financial pressures. And we think the same thing could happen if they did so for countries rather than just for banks. So that's the first part. It's about the debt crisis. The second part is about the climate crisis. And that's much more longer term. And there are about five proposals on how to deal with the climate crisis, and the three different parts of the climate crisis. The first one is, well, we didn't mitigate in time, and so we've got huge climate loss and damage. And we haven't adapted in time, and so we're suffering this loss of damage. So part of these five proposals about how to deal with loss and damage, and we got a victory at the COP27 on creating a fund. Part of it is how to get concessional money from the development banks to go towards those countries very vulnerable to climate change so they can invest in resilience.

Heba Aly

Concessional money being at very low interest rates?

Avinash Persaud

Yeah, so the international financial architecture has something called the IDA lending [The World Bank's International Development Association], and a country that is eligible for IDA lending gets 50-year debt, with the first 20 odd years interest-free, and the last part on very low interest rates. But only countries whose income per head is less than $1,253 per year, are eligible. Seventy percent of the world's poor, 70% of the world's poor, live in countries not eligible for that concessionary money, including many of the climate-vulnerable countries. So we’re saying, why did this eligibility include climate-vulnerable countries so they can invest in making themselves more robust? And a final thing on the Bridgetown Initiative is how do we make the global financial system more adept for dealing with shocks, because at the moment, whenever there's a big shock, developing countries don't have the other ways developed countries can deal with it – they can't print money, like quantitative easing, they end up with more and more debt. Each time there's a shock, there’s more and more debt. And so that's why the climate crisis is leading to a debt crisis, which is leading to a development crisis.

Heba Aly

I just want to drill down on the interest piece in particular, because that's been, really, to my mind, one of the big cruxes of this, that the Global North can borrow, as Mia Mottley often says, at interest rates of between one and 4%, while the Global South is charged interest rates of 12 to 14%. You just mentioned it as well, that the Special Drawing Rights, when when the IMF draws on its reserves, are often made available to wealthier countries. I'm trying to get my head around how that has been justified, that the countries that needed the most get the least.

Avinash Persaud

Well, we're proposing a change. But the reason why it was done that way was because it's linked to the size of their economies. It is a way of expanding liquidity in the world. And you will always have those people who fear inflation, who fear that we are creating too much indiscipline, and so the way they dealt with that was by saying, well, we'll expand liquidity by creating these Special Drawing Rights, but it'll be in proportion to the size of the economy. So the United States, the largest single economy, gets the most. China gets, probably, the second most, and European countries get the bulk. So the poorest countries, they get some, and they use them, they need them. They’re using around 80% of the Special Drawing Rights they use. The differences interest rates, of course, you talked about what's about the market interest rate. So that's not people imposing that rate on us. That's the market imposing that. The market imposes that in part because when you are an international reserve currency, and we have an international financial system, which has a handful of currencies or international reserve currencies, it’s based on their history, it’s based on the size of their trading, which in no small part relates to the old history of their empires. So these countries, they have tremendous flexibility. When there's a crisis going on, people want their reserve currencies, so they can issue more of them. So they can have responsive monetary and fiscal policies responding to the crisis. But when you're in a developing country, and you don't have that kind of currency, when a crisis happens, no one wants your currency, they're fleeing it. So you have to tighten your interest rates, you have to raise interest rates, you have to cut back your spending. So the response tends to be this very divergent response. So rich countries are able to respond to a crisis and be activists, the poor countries have to double down on the crisis, and actually make things worse through policies. So we’re trying to change all that by creating a global Climate Mitigation Trust seeded by $500 billion of Special Drawing Rights to be re-channeled to this trust, which will then lend money to those countries that don't want to invest in climate mitigation and climate resilience.

Heba Aly 21:03

I'm going to try to summarize this because it is quite complex, but you've just talked about the Climate Mitigation Trust as one piece of this. We've talked about freeing up money and national budgets by reducing the debts. And I believe there's another element of this, which is around putting debt payments on hold altogether when a disaster strikes. But overall, you're really trying to unlock finance for countries to be able to respond to disasters on terms that are more palatable. Was that a reasonable summary?

Avinash Persaud 

Perfect, perfect, yes.

Heba Aly

I see you nodding, good. François, I want to turn to you, because there's the number crunching that Avinash has just walked us through to some extent, the policy formulations. But then the diplomacy and the politics come in. You were in New York when Prime Minister Mottley announced the Bridgetown Agenda, or Initiative, as it's otherwise called. Walk us through how you've been thinking about how to sell this idea politically, and how a small country like Barbados can get Wall Street or the IMF to agree to these kinds of terms.

François Jackman 22:10

Well, I'd start off by saying it ain't easy, I suppose. And Avinash knows this very well, having just come out of the trenches in Sharm el-Sheikh with a significant success, it's got to be said. But in terms of how these kinds of ideas can be sold, this is part of a broader debate, a continuum of debate, dialogue, disagreement within the international community about the broader shape of the international system, and how to address the many tiers of the inequities that exist within it. And one of the reasons is that because of the present international system was created, let's simplify, say, in the 1940s, by a group of countries for themselves, essentially. And much has changed since then, countries that were not around, then countries like ours, are now present [and] have particular kinds of needs, and indeed contributions to make. And the system, for a long time, has not reflected this new reality. So this is true in the financial and economic domain. It's true in the geopolitical domain. It's true in the way in which countries and peoples talk to one another. You can see these inequities throughout the entire international system. And what I think the the success that Avinash and Prime Minister Mottley have had so far with the Bridgetown Initiative is essentially to show up in very clear, very stark terms, how the system, which we have all more or less accepted to be a part of is not generating the kinds of outcomes that the majority of its members require. And therefore, there is a pressing an urgent, an existential need for the system to be reformed.

Mia Mottley at IPI: What we need is a New Internationalism. A truly inclusive United Nations and international system. The United Nations was forged with the intention that it should be, “The indispensable common house of the entire human family.” The indispensable common house of – not half, not a quarter, not three quarters – of the entire human family. And for a while, it was getting there. But in the last 77 years, haven’t we recognized that the world has changed? And if the organisation is to serve today’s member-states, if it is to not run the risk of becoming irrelevant, it has to be more inclusive.

This is not a new idea. I mean, we have been talking about – and you would know this in the work that your shop has done – we've been talking about reshaping the international system to better reflect the needs of its members for a long time. But as Avinash pointed out, I think perhaps we are at a moment in our history where a series of events, crises, opportunities, has arisen, such that even in the face of the asymmetry that's built into the system, it is impossible for those with the power to ignore the gross inequities that the system is now clearly producing for everyone to see when they turn on their television. So I think that in a way has given a relatively favorable context to the initiatives which Avinash and the Prime Minister have been putting forward, which are part, as I said, of a longer debate – we've been talking in the UN about the Addis Ababa agenda, we've been talking about Financing for Development, the UN Secretary General's put out a report on Our Common Agenda, there's a global crisis response group in the UN. All of these processes, all of these bodies are essentially pointing to the same inequities, and we have an opportunity right now, with clear thinking, with practical suggestions, and – I would take this as a compliment to Barbados as a whole – with a leader who is able to articulate this at the highest level. We have an opportunity really to tackle some of the most egregious of these inequities head-on. And we have been getting a little bit of positive response. The music, the tone, has changed somewhat in the last few years.

Avinash Persaud 

I think there is as much a strategy around how these ideas take hold as there is an economic strategy. I think there are three elements to it. One is, we are looking at a global problem.

Mottley at UNGA: All of us in here have suffered as a result of the weakest of us being unable to rise to the occasion for the protection of public health. All of us in here now know what it is to be on the frontline of the climate crisis. Years ago, we spoke about Small Island Developing States on the frontline because we were the canaries in the mine. Today, we speak of all countries.

Avinash Persaud 

The Bridgetown Initiative is not about Barbados. Barbados will benefit from the Bridgetown Initiative, but it is dealing with a global problem. And that instantly gives us and the Prime Minister a certain amount of moral authority. We are not pleading for ourselves, we are pleading for countries who need that support. And we are pleading for a planetary and world system to be better. The second thing is, we identified the big global problem, which today is climate, and we filled the vacuum of ideas with clear proposals which are practical and of the size of the problem. People often say “Whether you'd like to plan or not, there's no other plan out there of the size that treats the size of the problem we're facing”. And then the third thing I'd say is listening. So the ideas have been refined. François will remember the first time they were developed, and we looked at them again today, they all keep on being refined based on listening. Listening to people, what they're saying, which doors are opening, which doors are shutting. We don't care what things are called. We don't care if they want to change the word, if they want a funding arrangement rather than a fund. We don't care about those things. What matters is something gets done. And then a final thing is building a coalition. In Sharm el-Sheikh, one of the reasons why we got a historic result, we got the first ever established fund, was based on two political ideas that François talked a bit about. Firstly, the Alliance of Small Island States was absolutely united 100%, and the leadership there was not directly from Barbados, but from Antigua, and the G77 (the group of developing countries) decided that they were at one with the Alliance of Small Island States, and at no point did they break, even though that group of countries – some of them are large emitters – are quite different than the Alliance of Small Island States. But at no point was there a breaking of that unity. And by listening to the Europeans presenting a solution to a global problem that Europe considers itself to be a leader in, Europe considers itself to be a climate leader, and by offering them solutions, Europe crossed the floor. And once you had G77 and Europe, everyone else was isolated. America was isolated. America moved across, not because they were persuaded by the idea, but because of the isolation. The G77, plus China, plus Europe. The American strategy is to isolate China, and they found that they isolated themselves. And so that's what led to this global, unique, historic movement. The combination of the vacuum of ideas, big ideas, listening, but political – what François was talking about – the political unity behind this coalition.

Heba Aly 

But I just want to understand what really that has resulted in. So I think it's clear that momentum for this idea is growing. Barbados is all over the news these days. Last we heard, IMF, France, Canada were backing the agenda. So as you've both described, COP27 was a big win. We heard French President Emmanuel Macron, saying we have to change the rules of the IMF and the World Bank. So really, clear messaging there.

Emmanuel Macron, COP 27 (Rappler translation): We launched an initiative with Mia Mottley of Barbados, and I wanted to welcome her force of character and what she’s brought to this debate. And we have set up a group of wise minds at the highest levels to come up with climate financing solutions. Next spring – not in another year or two years – next spring, we call on the IMF, the World Bank, and the OECD to come up with concrete solutions to activate the innovative financing solutions…

Heba Aly 

But in practice, what have the IMF and World Bank actually agreed to? What does backing this plan actually look like in practice?

Avinash Persaud 

Well, COP cannot determine what the IMF and World Bank do. COP is a launching pad for certain things. There are five parts of the Bridgetown initiative. One of them is the creation of a loss and damage fund, and that was decided and agreed at COP. They agreed to do two things. To establish a fund. If we asked them to establish a fund perfectly formed, we would end up with nothing, because you can't establish a fund perfectly formed without long periods of deliberations. So it was a strategic element that we did it in the two-step process. This year, a transition committee established with the mandate to identify the the mechanisms and the funding to report and recommend those to the next year's COP, at which point if approved, the fund becomes operationalizing. Bridgetown 2, you referenced it. The UK announced that they are taking on board the Barbados-style natural disaster clauses in which interest payments and principal repayments are suspended for two years and then added back on. They presented at COP a model clause that anyone else can take and put into their debt. And they announced that they were going to put it into their export credit lending. So that was Bridgetown 2 being half-approved. We want big borrowers to do it, to normalize it, because once they normalize it, then it becomes easier for other developing countries to issue them. Bridgetown 3 is eligibility and widening MDB lending. That was the COP Presidency’s report came out, they agreed to support it, the Europeans and the Americans agreed, that's an agenda. But the target place for that is Spring Meetings in D.C. next year. And then finally, Macron came out and said in terms of the big Mitigation Trust – the $500 billion SDR idea – that we need a global summit to discuss this, and at that summit, the blueprint will be presented and he’s appointing a wise persons’ group to develop that blueprint.

Heba Aly 

So you've talked a little bit about individual countries doing what they can within their own remit, and that that's a bit different than the IMF or the World Bank making decisions across the board. Although I do understand that they have also bought into this to some extent…

Avinash Persaud 

The IMF and the World Bank, are not decision-making bodies. It is their shareholders who decide. You will never get the World Bank to reform itself, you will get the shareholders of the World Bank to reform it. Adn the shareholders of the IMF.

Heba Aly 33:55

So François, maybe coming back to you. The IMF and the World Bank were created at a particular time, as we've discussed, and represent a certain set of powers. And Avinash, you yourself have said that this kind of whole system beats up low-income countries. How hopeful are you, François, that the institutions and governments that make up this world order can be part of the solution to a problem that they themselves have created? To what extent are they negotiating in good faith?

François Jackman

Well, by disposition, and I suppose of necessity, I'm an optimist, because being a diplomat for a small country, if you're not an optimist, I don't think you'd last very long. But I'd come back to the bigger picture in a way and I think that there is there is an emerging appreciation that the present order has essentially run its course, and that one way or another, it is being shown up for its shortcomings, and that the responsibility lies with all of its member states. But as Avinash was making the point about the shareholders of the international financial institutions, the responsibility lies principally with the major shareholders of the international system to change this order. So, for example, right now, here in New York, I would say there are prospects of a reinvigorated debate on the reform of the UN Security Council. This prospect is built, amongst other things, on the fact that a record number of countries have been saying out loud to their interlocutors in formal and in informal spaces, that this UN Security Council system, can no longer, is no longer functioning. And all you need to do is to look around you to see how it's failing. In our own region, you could look at what is going on in Haiti as an example of where the international system has failed most spectacularly to render the support that it needs to be rendering to countries like ours. So the debate is going in the right direction. There's a realization that we can no longer continue with the system as it presently exists. And the next couple of years – and here, I'm thinking really just of the UN, which is the place that I see the clearest – over the next couple of years, we're going to have the opportunity to make this case, including specifically with regard to financing, but more broadly in a growing number of key fora. There's going to be a big water conference next year. Clearly, the question of water is one of those global public goods, transnational issues, that is environmental in nature, which is deeply linked to a proper financial system. There's going to be a big meeting later next year on universal health coverage. You couldn't want a more pressing emergency topic, given where we've just come out on questions of global health. There's going to be an SDG summit, a summit to review the implementation of the Sustainable Development Goals, which, as we have all recognized, as the UN Secretary-General has recognized, that implementation is not where we want it, in part, because of the failures on the financial side. In part due to the failures of implementing SDG 17, which is a fancy way of saying partnerships, funding and finance. There's going to be a big conference on the least developed countries, the fifth in the series. Clearly, the question of finance and changing the way in which financial resources are made available to the least developed countries, is going to be part of this discussion. And finally, in 2024, there's going to be a special meeting on the sustainable development of small island developing states, 30 years after the Barbados Conference, which launched this whole small island developing states paradigm. And there is going to be the Summit of the Future, which is the UN Secretary General's big idea for launching a renewed international order. So we have all of the fora, I think, set up for us to make the case that Avinash and the Prime Minister have been making clearly on financing climate, but to broaden this into an entire revamp of the international system. Of course, we're not going to get everything that we want, because that's simply not how the international system works. But we have the opportunities to make the case in clear practical ways, just like we've made the case for climate and for climate finance.

Heba Aly

So you are making the case for this major restructuring of global financing, but our audience is primarily made up of policymakers and practitioners working in humanitarian response, specifically, and most of them have dedicated their careers to helping people in need through aid. Avinash, you have described official development assistance as irrelevant in global development, and as per this conversation, that tackling debt, especially at the scale the Bridgetown Initiative proposes, would have much more impact. What is at stake for humanitarianism if this doesn’t happen?

Avinash Persaud 

Well, the challenge is that the levels of ODA are stuck and diminishing. We need about four to $5 trillion a year to transform development and climate. ODA is $180 billion, and that’s spread across 17 essential Sustainable Development Goals. So we need new instruments. And that is why we want to triple the amount of lending that the multilateral developments do from $80 billion to $240 billion, so even bigger than total ODA. But within that, we need to increase the amount of concessional lending – that special kind of IDA-type lending, which is as close to grant-like as possible. We don't use the word reform too much, because for 50 years, countries have been saying reform, and that just leads to nothing. But we say there are five things that you can do, that if you did those achievable things, it would actually redraw the global financial system. Changing eligibility, tripling the amount of bank lending, creating new instruments for getting private investment, is one way because we assume that we are not going to get what we should have, which is an increase in ODA lending.

Heba Aly 

So to make that concrete, as I understand it, Barbados has already managed to negotiate a 26% reduction in its debt, enough – at least temporarily – to drop interest payments from 7% of the economy to 3%, which frees up a chunk of money. How are you going to use that new money specifically to benefit people that are affected by crises on the ground?

Avinash Persaud

Well, of course, the reason why we did was to release some of our resources that we can dedicate it towards public health and public education. And those are very important parts of our budget that are getting squeezed by levels of debt interest. But I think it's important to remember that our situation was a middle-income country, and middle-income countries have private creditor problems, and debt restructuring can work for them. Well, once, because you can't do debt restructuring every year, because once you've done it, if you need money… you have to do it infrequently. So that makes sense for countries that are heavily indebted to the private sector, to consider a debt restructuring to release resources. You can do debt swaps – we did one – but they're not really going to give you the kind of release of resources that can have meaningful change. They sound wonderful, they’re very sexy: climate for debt swaps, debt for education swaps. We did one of the largest – we released $50 million over 12 years. $50 million over 12 years is not going to move the needle over anything.

Mottley at IPI: “It was the slave trade and it was the gun that built empires; and empires that financed industrialization, and that the face of colonization allowed their countries to thrive and to become wealthy. My country and others like mine have been pushed to the brink of disaster as a result of it. And the very same countries which have pushed us there, while growing their economies, will take the money made at the expense of our blood, our sweat, and our tears and lend it to us at commercial rates or insurance premium to fix the climate crisis that they have caused by extracting the money from us to fuel the industrial revolution which now fuels the climate crisis. We cannot abide this injustice anylonger [...]\ And when we make the case for reparations, it is not a case that is being made with emotion or acrimony, but it is simply to right the wrongs so that we can go together in harmony, as one, to fight the great battles of our time.

Heba Aly 

So one question would be: why focus on repaying debts at all, and not lobby for reparations, or something that challenges the entire system and the reason you have to pay these debts in the first place?

Avinash Persaud 

Because we're focused on five achievable things that will meaningfully redraw the system. We do not believe it makes sense to to dig our heels in on something that will not happen, because it may be the righteous thing to do the right thing to do is just thing to do., but it's not going to happen. They're hardly writing checks for their own people today, far less the idea that they would write a check for foreigners. They are there deporting foreigners, deporting refugees, they’re not expanding the ODA budgets. But these are five things. And we've already seen movement on all five – five achievable things that will redraw the global financial system

François Jackman

It's not as though we're saying this is the only thing. As our Prime Minister often says, especially in small countries, you have to do several things at the same time. We can make several arguments at the same time. And the argument about ODA is not to be set aside as no longer relevant. It's still highly relevant. But there are these other things, which as Avinash has identified, are practical [and] treat to some issues, which are frankly emergency issues. We can still and we still need to make the broader argument with regard to ODA and other issues.

Heba Aly 

So a final question, picking up on your point, Avinash, that it has to be practical, it has to be achievable. Every time I talk to people in the humanitarian sector about a reformed global governance system or a new world order, it feels so far away and so impossible to change. Even the Bridgetown Initiative is a big plan with a whole bunch of strands to it, as you've been talking about. So, what do each of you see as the practical starting point or the most accessible entry into this question about a more equitable world order?

Avinash Persaud 

I think our political strategy has been different. For 50 years, developing countries have said we need to reform the global financial system, we need to reform the global governance system. And for 50 years, nothing, nothing has happened. So we are not repeating the same thing. Those things need to be done. Those things need to be pushed for. People need to argue for them. But we've identified five things that they could do, and we've listened carefully. And these are five things they don't have a problem doing, [and] they could do. So individually, they are achievable. Collectively, they've been specially curated to meaningfully change the global financial system. And I think that's the approach to get change in the current environment.

Heba Aly 

François, last words?

François Jackman 

I don't think I can add much to what Avinash has said. In a way, it presents a model for other problem-solving approaches in the international system: find achievable goals; present them in ways which your interlocutors can understand and appreciate. And which are politically possible for them as well. Because it's one thing to say, here's the right thing to do, but as Avinash hsa said, the politics of our interlocutors drive them as well. So in a way, this is a model perhaps for how we can approach some of the other issues by showing what are the practical solutions that are palatable to as broad a spectrum of actors as possible, including – and this is the reality of the international system – including the richest and most powerful, without abandoning the moral high ground, the insistence on an equitable overall arrangement in which those who have the most, bear the most responsibility.

Heba Aly 

Well, we do often hear from those calling for that greater equity, but it's really interesting to speak to those in the trenches of international diplomacy trying to make it happen, which, if you succeed, will have quite a significant effect on those who actually experienced crises on the ground. So François, Avinash, thank you very much for taking the time to speak to us today.

François Jackman

Thank you.

Avinash Persaud 

Thank you very much.

Heba Aly

Avinash Persaud is the Special Envoy to the Prime Minister of Barbados on Investment and Financial Services, and François Jackman is the Permanent Representative of Barbados to the United Nations in New York City.

If you’ve got thoughts on this episode, write to us or send us a voice note at [email protected].

And before we wrap up today, we’re joined again by our podcast producer, Melissa Fundira to go through the mailbox. Hi Melissa.

Melissa Fundira

Hi Heba.

Heba Aly

What have you got for us this time?

Melissa Fundira

Last week, one of our listeners wrote to us with a question from a recent episode we did on Global Public Investment, or GPI as it’s also called. It’s a proposal for a more democratic financing system for global public goods that basically brings together all nations to contribute funds, to all decide how those funds are going to be used, and to all benefit from it. Michael Thaw, a listener working in South Sudan, wanted to know what’s the difference between GPI and the United Nations. Isn't GPI basically trying to do what the UN was set up to do, and is, perhaps, equipped today already? So we called up one of our guests from the GPI episode and she has answers for you Michael. Solange Baptiste is the executive director of the International Treatment Preparedness Coalition (ITPC), and she was part of the Expert Working Group that was working towards making GPI a reality. Here’s what she had to say in answer to that question

Solange Baptiste: I think it's important to understand that one can support the other. So GPI are really principles that are centered around equalization, and that all can contribute, all should decide, and all should benefit. Whereas the UN is the current system that exists in the world for collective action at a global level. But what we can interpret is that the UN system is actually not working to solve the polycrisis that we found ourselves in. We're not coming up with solutions that are for everyone, everywhere, for all the issues, because of the power dynamics and the political power struggles that exist within the different bodies of the UN system.

Heba Aly

That’s something we heard right at the beginning of this season when Tim Murithi was talking about how the UN, as it is currently set up, really doesn’t really give everyone equal voice at the table.

Melissa Fundira

And like Tim Murithi, and like almost every single guest we’ve had on this season of the podcast, Solange also brings up Barbados Prime Minister, Mia Mottley, and her description of the UN as a colonial institution. And for that reason, Solange says that integrating the GPI principles into the UN system will be a challenge because the UN, as it currently stands, is at odds with 3 pillars of GPI, which is “All contribute. All decide. All benefit.”

Solange Baptiste: I think that GPI can come in and be applied to a different system, or integrated within the UN system. nut that will be difficult because of how it's fundamentally set up. You have to balance these very interesting and complex issues, for example, around repatriation, whether it's climate, whether it's race, whichever lens, you look at. How did we get ourselves into the state that we are in today, where there are rich countries and there poor countries? And how did the rich countries get rich? Do we just say, well, that's just how it is? Or do we actually look at the brutal role or history that brought us to the state we are in today? And so there are many different issues that we're going to have to tackle if we can get and instill the GPI principles into our way forward.

Heba: I think this really echoes a lot of what we’ve been hearing on this season, but also previous seasons, that the UN that exists today was set up at a certain point in time to serve a certain purpose, and that we might be beyond that now and needing a new system for the world order of the future.

Melissa: Yes, and Michael did have a second question that also speaks to some of the conversations that have been had on this podcast in this season and in previous seasons as well, which is “How political sentiment could be removed from decision-making?”.

Heba: I suppose thinking back to that episode on GPI, I can understand where that question comes from, because we spent so much of the conversation asking Solange and the other guest, Jonathan Glennie, how the countries who hold power within the UN today would ever agree to the GPI principles, given that they benefit from the global governance system as it’s currently organized.

Melissa: Exactly. So when we put this to Solange, she says it would require some relinquishing of decision-making power, for sure. Essentially, she thinks that GPI is a practical approach to this issue.

Solange Baptiste: No matter how you spin it, if you're dealing with countries, groups of bodies, you're ultimately dealing with people. And to deal with people means that you have to deal with the human condition, which is one of self-interest and therefore of politics. So it's impossible to really remove politics from the equation. So decision-making, I think, in order to equalize it, is how do you make it at least the least problematic when it comes to the political. Maybe we can substitute that word for power inequalities. And I think that has to do with the fact that all are contributing, so all have a say, and all have an ability to benefit. And so, therefore, all should have an opportunity to make a decision. I think that's the only way, because the pervading view is that if you contribute more, then you should have more say. Or if you contribute, you should have say and those who don't contribute have no say. So if we all contribute, then we can all, according to our ability as a country, you should be able to have ability to make a decision. And so that's one way that GPI is able to sort of control for the political dynamics that are inevitable as we deal with humans, and we deal with countries, and with regions, and at the global scale.

Heba Aly

I still think that’s a little bit idealistic, but as Francois was saying in today’s conversation, maybe the political landscape or environment that exists today enables some of those ideas that may have been considered idealistic in the past to become realistic today.

Melissa

Right, which is something that Solange said in the GPI episode as well, that crisis is their partner as they’re trying to push forward these ideas that may have seemed quite radical just a few years ago.

Heba Aly

Right. Well, thank you to Solange Baptiste, executive director of ITPC, for taking those questions from our listener, and thank you Michael for sending them. Goes to show you – if you send us your thoughts, you might just get an answer! Thanks, Melissa.

Melissa: Thanks Heba.

Heba: Today, we’ll leave you with some thoughts from the Deputy Director of the International Monetary Fund, Franck Bousquet, speaking at the recent Paris Peace Forum. You’ll hear him describe how the IMF is helping countries finance responses to crises, but he also argues that the IMF is just one piece of a much larger puzzle. You’ll also hear from Eric Pilofsky of the Rockefeller Foundation, who – much like Avinash argued today – says it’s the major shareholders of the IMF who would need to change the rules of the game for the institution to better respond to crisis.

This podcast is a production of The New Humanitarian. This episode was produced and edited by the wonderful Melissa Fundira. Original music by Whitney Patterson. And I’m your host Heba Aly. Thank you for listening to Rethinking Humanitarianism.

Franck Bousquet: “Financing of course we are scaling up support. We provided just over the past years in response to the COVID crisis that hit big time those fragile and conflict-affected States more than $16 billion to those countries, in addition to that were covering about 24 of them, in addition to $16 billion of SDR allocations. We have created a food shock window to provide support for those countries responding to food security crises, and we set up resilience and sustainability trust to also support those low, medium-income countries that are facing climate change. So we are trying to look at the type of financing that will be helping to address the specific challenge in addition to the major scale-up and response that was provided over the past years in response to the COVID. As I mentioned, those countries will see their per capita income of 2019 recover only in 2024. So the whole point is that there is a risk of, clearly, divergence between those countries and the rest of the world, and this is why we are scaling up our engagement with those countries. But as you saw, as you heard from me today, it's not just by providing financing – yes we are doing our part – but it's also trying to see how can we best improve our efficiency and impact, including with all the other actors because we are just one piece of a much bigger puzzle.

Eric Pelofsky: “I'm absolutely convinced that Franck [Bousquet] and his colleagues are doing what they can within the existing system, but the fact of the matter is, the amount of stimulus – and I'm sure that he can give you the numbers – the amount of stimulus that the low-income and middle-income countries had access to as compared to the developed countries, it's not even in the same universe. And it's up to the shareholders of these institutions to create new circumstances in which the [World] Bank and the IMF can do more because the current structure has limitations that are not dealing with the scale of the problem. Developing countries had double-digit stimulus in response and the developing countries had single-digit and barely-break-the-surface-of-the-ocean kind of responses to the crisis that the pandemic caused. And so, it's really upon the burden of the shoulders of the shareholders, the major shareholders, to change the environment that Franck is working in, in order to actually make a considerable difference to these countries. Otherwise, there's severe limitations on what can be done.”

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