(MENAFN- ValueWalk)
Finance ministers from various Commonwealth countries have called for a systemic reform of the global financial architecture to enhance access to development financing for vulnerable countries
The collective call for reform came at the Commonwealth Finance Ministers High-Level Working Group meeting in Washington DC on 14 April 2023.
Finance Ministers Discuss National Fiscal Policies
At the inaugural Commonwealth Finance Ministers High-Level Working Group Meeting on the margins of the 2023 World Bank Group and the International Monetary Fund (imf ) Spring Meetings, finance ministers discussed national fiscal policies, measures for financial sustainability, eligibility criteria for development finance and potential reforms required for a more equitable financial architecture.
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In their call, ministers stressed that any reforms must increase funding and consider the realities of vulnerability when allocating support to help vulnerable countries invest in resilience and achieve sustainable development.
In her opening remarks, the Commonwealth Secretary-General, the Rt Hon Patricia Scotland KC said:
She continued:“To create meaningful change, the global financial system must take into account the realities of vulnerability when allocating support to developing countries.”
In this regard, Secretary-General Scotland highlighted that the Commonwealth's Universal Vulnerability Index provides a solid basis to better target support for those who need it the most.
Delivering a keynote address at the working group meeting, the Prime Minister of Barbados, the Hon Mia Mottley, said:
Focusing On The Global Financial Architecture
The working group meeting also gave ministers an opportunity to focus on the urgent need to influence the global financial architecture, which is still underpinned by fiscal rules and conditions deemed unfit to meet the needs of the current global economic landscape and overlapping challenges.
Eligibility criteria for accessing concessional finance are based on sole metrics of gross national income (GNI) per capita, which mostly disregards national vulnerabilities. However, recent overlapping crises have exposed and provided evidence of countries' susceptibility to external shocks. The traditional rules and governing conditions for access to international development finance are no longer relevant in this era of interlocked and overlapping crises.
The Commonwealth Secretariat paper titled 'Fiscal Policy Options for Resilient and Sustainable Development' considers the multidimensional vulnerabilities and socio-economic development challenges faced by countries and recommends several fiscal and policy reforms to facilitate more resilient and sustainable development outcomes.
Speaking at the working group meeting, Senior Director for Economic, Youth and Sustainable Development at the Commonwealth Secretariat, Ruth Kattumuri said:
The ministers agreed for India to be the chair, and Nigeria as the deputy chair, for the Finance Ministers Working Group for a Commonwealth Call for Reform of the Global Financial Architecture.
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