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46 poor countries question the feasibility of the international financing system and call for a complete review of the economic model


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The 46 poorest countries in the world have questioned the international finance system and multilateral aid and see it as a tool of domination, calling for a complete revision of the economic model inherited from the 1944 Bretton Woods agreement that established the International Monetary Fund. Many country leaders saw the system that governs aid from north to south as being responsible for keeping them in poverty.

Participants in the Least Developed Countries Conference held in Doha raised several questions about international finance system and multilateral aid, inherited from the post-World War II era, as inappropriate for poor countries and a tool of domination.

The 46 poorest countries in the world, which includes 33 African countries, called during the conference, which continues until Thursday, for a complete review of the economic model inherited from the “Brettton Woods” agreement concluded in 1944 that established the International Monetary Fund.

Thanks to their classification in the category of least developed countries, these countries are supposed to benefit from trade privileges and facilities in obtaining aid and other forms of financing. In 1971, this category included 24 countries, but the number of countries in this category has almost doubled now.

These countries are now the first victims of climate warming, while they suffer under the weight of inflation related to food prices and energy sources resulting from the Ukraine war, while burdened by debts that struggle even to pay the interest on them.

Many leaders of states and governments present at the Doha conference held under the auspices of the United Nations believe that the system that governs aid provided from north to south is responsible for keeping them in a state of poverty.

“It is time for 12 international organizations, such as the Organization for Economic Co-operation and Development and the multilateral development banks, to stop using GDP per capita as the sole measure of development,” said Wavell Ramkalawan, President of the Seychelles. developed that succeeded in breaking out of this category.

Designed by the rich, for the rich.

“One size does not fit all! We have to recognize the needs of countries that have their own vulnerabilities,” the head of the tiny country added.

In turn, the President of East Timor, Jose Ramos-Horta, accused the countries of the North of holding the South responsible for its failed choices. “Our partners tend to hold the recipient partner fully responsible for any failure, and to avoid revisiting their aid programs that may have certainly contributed to the failures,” he said.

The Covid crisis was brought up as an example several times, as the poorest countries, which were burdened by the epidemic immediately after its spread, were initially denied access to vaccines, before they had to borrow again to control the situation.

In a speech delivered at the launch of the conference, UN Secretary-General António Guterres stressed that “the global financial system is highly biased, designed by rich countries in favor of rich countries, and allows dealing with the least developed countries unfairly.”

Fingers of accusation are pointed especially at major institutions, led by the World Bank and the International Monetary Fund, as these bodies are accused of imposing austerity measures and tightening the budget, based on a logic that poor countries cannot help but acquiesce to.

And the United Nations Development Program revealed at the end of February that 52 countries are either suffering from a debt crisis or are on the verge of default.

Debt relief and restructuring

Hence the intervention of the Deputy Prime Minister of Lesotho Ntumming Magara, who emphasized that “the burden of debt and interest has become an increasing challenge for the least developed countries. Therefore, there is a need for urgent debt relief, restructuring and cancellation.”

China now tops the list of lending countries, but the amount of debt owed to it is still much lower than that owed to multilateral institutions and private parties.

In parallel with the official interventions, a number of civil society activists are discussing the same issue in Doha.

“The financial system supports market-driven solutions to public policy problems, and history has taught us that this does not work,” said Kenyan economist and CEO of the NGO “Aphrodad”, Jason Rosario Braganza, to Agence France-Presse.

“We have to try to restore importance to multilateralism,” said Marina Durano of the UNI trade union. “We all know how unfair the situation is.”

As for the Filipino activist specializing in debt, Lady Nakpil, for her part, she denounced those who “use lending and debt relief in order to impose certain policies.”

For her, reform is no longer possible. Everything must be redesigned and built. “It is time to dismantle the Bretton Woods institutions,” she said.

France 24/AFP

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