FILE PHOTO: Prime Minister of Barbados Mia Amor Mottley addresses the "Summit of the Future" in the General Assembly Hall at United Nations Headquarters in New York City, U.S., September 22, 2024. REUTERS/David Dee Delgado/File Photo
NEW YORK (Reuters) - Barbados will call for creation of a new World Bank finance facility to provide emergency liquidity to climate-vulnerable countries in a third version of the Bridgetown Initiative backed by many developing countries, sources briefed on the plans said.
Barbados Prime Minister Mia Mottley told members of the Council on Foreign Relations some changes were already in progress, but further reforms of international financial institutions were needed to address the growing challenges of high debt levels, climate change and slower growth.
"The success that we need is a change of attitude and a resetting of attitudes across the world," she said. "Changing the rules of the game to allow us to be seen and heard is absolutely critical, particularly given the multiplicity of challenges that we are facing."
The Bridgetown Initiative, first released in 2022 and updated once before in 2023, calls for reforms to make it cheaper for emerging markets and developing countries - about 70 of whom are at risk of debt distress - to borrow money.
Countries are also studying various tax measures - including levies on shipping and airlines and a tax on the super-wealthy - to help raise the huge sums countries need to build more climate-resilient economies without going further into debt.
Bridgetown 3.0 calls for specific actions that could unlock more finance to help countries adapt to climate change and shock-proof their economies from natural disasters, while promoting long-term economic growth, the sources said.
It estimates that emerging markets and developing countries will need $1.8 trillion annually to address the climate crisis and nature related investments, and another $1.2 trillion each year to reduce poverty, improve education and achieve other Sustainable Development Goals.
The agenda calls on international financial institutions to give a stronger voice to developing countries in their governance and decision-making and demands reforms of the Group of 20 Common Framework for debt treatment to make it more timely.
It also calls for the World Bank to establish a dedicated “universal contingent finance facility” to provide emergency liquidity on low- or zero-interest terms to all climate-vulnerable countries after a natural disaster hits.
The updated initiative also urges new and existing donor countries to replenish the International Development Association (IDA), the World Bank’s arm for low-income countries, with at least $120 billion this year, and for private finance to mobilize an additional $500 billion a year.
Rajiv Shah, former Administrator of the U.S. Agency for International Development and president of the Rockefeller Foundation, welcomed the updated initiative and said it could help raise trillions of dollars of new funding for emerging markets and developing countries, if implemented.
(Reporting by Andrea Shalal; Editing by Lincoln Feast.)
