Published on: January 21, 2024

President emphasizes immediate reforms in global financial structure

  • Contemporary International Debt Settlement Model deemed inappropriate in the present context.
  • Developing Nations Unduly Affected by Current System – Revealed President Wickremesinghe at the 3rd South Summit of G77 + China.

President Ranil Wickremesinghe addressing the 3rd South Summit today (21) in Kampala, Uganda, highlighted the numerous challenges the world faces, such as conflicts, pandemic repercussions, climate disasters and financial market uncertainties. The President also emphasized the disproportionate impact on vulnerable G77 economies.

In his statement, President Wickremesinghe stressed the urgency of reforming the global financial architecture. The President also pointed out that the contemporary international debt resolution architecture is more suited for a world where the Paris Club and London Club dominated global debt resolution. Currently the global debt and particularly debt in the developing world is dominated by international bond markets, and non-Paris Club lenders.

The President lamented the diversion of financial resources to debt service, hindering spending on essential public services and human development, impacting Sustainable Development Goal (SDG) targets. He criticized the Common Framework for its inability to provide speedy debt resolution, causing delays in addressing recent sovereign debt distress in many G77 countries.

Addressing climate finance, President Wickremesinghe highlighted the failure of the global financial system to meet the Global South’s needs for mitigating and adapting to climate change. Despite commitments made in global forums, he pointed out the lack of real contributions. He introduced Sri Lanka’s Tropical Belt Initiative, aiming to catalyse private investments for global public goods, including biodiversity, oceans, and forest resources.

Expressing concern about rising protectionist tendencies in global trade, the President urged decisions to be made in multilateral forums rather than unilaterally. He emphasized the need for coordination between the G77 and BRICS to ensure the smooth efficiency of global trade and investment.

President Wickremesinghe also touched upon the challenges of job creation in developing economies, quoting Joseph Stiglitz on technological changes making manufacturing skills and capital-intensive, resulting in fewer jobs.

While advocating for global financial reforms, the President called on the G77 + China to formulate strategies for member countries to prepare for energy transition, digital transformation, the green economy, and a skilled workforce for the new global economy.

President Wickremesinghe also thanked President Museveni and the Government of Uganda for their hospitality and congratulated President Museveni on hosting the 3rd South Summit and assuming the Chairmanship of the Group of 77 + China.

The President also expressed gratitude to Cuba for its leadership during the past year and commended their effective leadership in the Havana Declaration.

As the G77 + China commemorate their 60th year, President Wickremesinghe emphasized the importance of remaining united to overcome multidimensional challenges based on the group’s founding principles of unity, complementarity, cooperation and solidarity.

As the largest alliance of developing countries within the United Nations, the G77 provided a platform for the Global South countries to express and advance their collective economic interests. It also served as a forum for joint discussions on international economic issues, fostering mutual cooperation among its member countries. The 3rd Southern Summit was convened under the theme of “Leaving No One Behind,” aiming to enhance collaboration among its 134 member nations in areas such as trade, investment, sustainable development, climate change, poverty alleviation, and the digital economy.

The presidency of the G77 + China summit, previously held by the Republic of Cuba, was assumed by the Republic of Uganda during this session.

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