COP27: Multilateral lenders failed poorest on climate – Commonwealth chief

  • The existing financial system has ‘obviously failed’
  • The climate makes fiscal prudence even more difficult for governments
  • Need to assess climate vulnerability when evaluating aid

SHARM EL-SHEIKH, Nov 17 (Reuters) – The world’s multilateral banks “clearly failed” low- and middle-income countries when climate disasters struck and need to better assess their vulnerability and resilience when offering support, said the Commonwealth leader. Reuters.

Pressure on development finance institutions such as the World Bank has increased over the past year amid fears that there is not enough money flowing to developing countries to help them prepare for and resist the effects of global warming.

US climate envoy John Kerry said at a side event at the COP27 climate talks in Egypt on Tuesday that he wanted a plan to reform bank lending practices to be ready early. next year.

As general secretary of the Commonwealth, a voluntary association of 56 countries that grew out of the British Empire, Patricia Scotland said the current global financial architecture was not fit for purpose.

“We have to think again; we cannot continue with the old structure because the old structure has obviously failed,” she said, calling for greater attention to the link between climate change and levels of health. indebtedness.

While in the past fiscal prudence was seen as the best way to manage and grow a country’s economy, thereby meeting the needs of the people, climate change has upended the calculus.

“You could have been as conservative as you wanted. You could have been as fiscally strict as you wanted. Go tell the hurricane that. When the hurricane hits you and takes 226% of your GDP and that you move from a middle-income country to a zero-income country, it has nothing to do with tax correctness.”

The Commonwealth, which emerged after the Second World War, presents itself as a partnership of equals.

To help better assess countries’ vulnerability to shocks, including climate-related disasters, the Commonwealth has created the Universal Vulnerability Index, Scotland said, urging the World Bank and others to use it in their decision-making of decision.

Rather than assessing a country’s state of development and any likely financial aid, through the prism of gross domestic product, Scotland cited the recent destructive floods in Pakistan as an example of why it was important to also take into account climate vulnerability.

“Many middle-income countries are extremely vulnerable to climate, and Pakistan… (is) an example.

“Pakistan would be considered too big, too prosperous. It has 172 countries below (in terms of economic output), but it is the fifth most climate-vulnerable country; and that middle-income status has not protected them. monsoons.”

“It didn’t protect them, and it didn’t protect the people who died either. So we have to think again.”

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