PanamaTimes

Tuesday, Apr 23, 2024

Slow start on World Bank reform angers climate-hit countries

Slow start on World Bank reform angers climate-hit countries

The World Bank meetings were supposed to be a first step in a new era of affordable loans for developing nations hard hit by climate change like Prime Minister Mia Mottley’s Barbados, one of many Caribbean islands battered by worsening hurricanes.
But if this was a new era, the World Bank meetings that closed Sunday in Washington left Mottley feeling much like she did in the old one — sidelined by wealthy nations that balked at either providing more money themselves or significantly changing the lending rules for existing funds. And increasingly, beyond angry.

“I get really furious,” Mottley said, when hearing “that people are not ready, or people want to kick the ball down the road.”

She spoke at sessions held by the non-profit Rockefeller Foundation in conjunction with the World Bank meetings, where Mottley and some African leaders detailed the growing human and financial cost of natural disasters that are growing more relentless as the climate warms: a record-breaking tropical storm that sat over southern Africa for days last month, killing hundreds; tens of thousands of deaths from years of failed rains in the Horn of Africa; a formal declaration from Italy this month of a refugee emergency.

“How much more must happen?” Mottley asked. “How many more people must lose their lives?“

With a World Bank head appointed by former President Donald Trump on his way out, US Treasury Secretary Janet Yellen and others have been pledging a World Bank climate overhaul.

Momentum — and demands — have been growing for the World Bank and other powerful global and regional financial institutions to change their lending practices so that less-wealthy nations can afford to harden themselves against rising seas, worsening storms and other extremes of climate change.

Developing nations also need help with the big investments it would take to move their economies away from climate-damaging coal and petroleum.

But so far, the governments with the biggest say, including the US, have been reluctant to put more of their own money into lending. As a group, they’ve also shied away from some of the changes in lending rules encouraged by Yellen and some others, fearing any move that could risk the World Bank’s AAA credit rating and make borrowing more expensive.

And looking ahead, advocates of freeing far more climate funding for countries primarily in the southern hemisphere worry no one is putting together the big tough plan that will turn lending-reform talk into action.

Some climate advocates expressed exasperation at one of the sole concrete steps approved by World Bank member countries at last week’s meetings: reducing the bank’s mandated ratio of equity to loans from 20 percent to 19 percent. That 1 percent percent tweak is expected to free about $4 billion a year for more lending.

The figure pales next to the $2.4 trillion that World Bank officials estimate developing nations need, in public and private funds, each year for the next seven to deal with climate change, pandemics and conflicts.

Developing nations complain — accurately — that the United States, Europe, China and other bigger economies have caused most of the climate damage and are leaving poorer nations to deal with the results.

The cost ranges from the Pacific island of Vanuatu struggling to move dozens of villages to higher ground to Pakistan dealing with sustained floods last year that covered a third of the country.

Global inflation and the strong US dollar have increased the debt burden on global and regional development loans in just the past year. Barbados’ interest rates on existing development loans soared, such as with an IMF loan whose rate went from 1.07 percent to 3.9 percent, Mottley said. She has spearheaded a
World Bank lending-reform agenda, called the Bridgetown Initiative, by developing nations.

The US and other wealthy nations never made good on an old pledge to provide $100 billion a year in climate funding for developing nations by 2020.

US climate envoy John Kerry and other Biden administration officials make clear they see no point in asking a Republican-heavy Congress for that kind of money to give other countries for climate change.

Instead, the administration wanted to see how much money it could free up for developing countries with tweaks like the 1 percent cut in the equity-to-loan ratio, said Scott Morris, a former deputy assistant treasury secretary for development finance, now at the Center for Global Development research group.

Yellen last week called that move “responsibly stretching the balance sheet.” She promised discussions on “many more” procedural moves in the months to come.

There’s an argument, though, that Republicans in Congress would be more receptive to appropriating money for the World Bank, and that the Biden administration “ought to be willing to make the ask of Congress for this,” Morris said. The administration didn’t seem to anticipate “the degree of backlash” from developing countries against the modest steps so far, he said.

The World Bank and IMF spring meetings were the start of a series of upcoming global gatherings that advocates hope will build momentum toward significant action on emissions cuts and climate finance. They culminate with the annual UN climate talks in Dubai in November and December.

But climate is a “crisis that is obviously proving itself hard to adequately describe to people in a way that actually motivates them,” Kerry said at another side event to the World Bank and IMF meetings.

Evoking what international climate bodies say will be increasing flows of climate refugees worldwide, Kerry cited a 2015 refugee crisis in Europe, and the surge of nationalist and far-right political parties that followed.

“And the anger that my colleagues here, particularly Mia Mottley, have described is going to grow if we don’t respond,” Kerry said. “You’ve seen nothing compared to what is going to happen if we don’t respond more rapidly.”
Newsletter

Related Articles

PanamaTimes
0:00
0:00
Close
Apple warns against drying iPhones with rice
In a recent High Court hearing, the U.S. argued that Julian Assange endangered lives by releasing classified information.
Global Law Enforcement Dismantles Lockbit Ransomware Operation
Russian opposition leader Alexey Navalny has died at the Arctic prison colony
The President of Argentina Javier Mile does not fly private, he flies commercial, with the citizens he represents. And they LOVE him for it.
Bitcoin Reaches $50,000 for First Time in Over Two Years
Belo Horizonte: Brazil's Rising Carnival Hotspot for 2024
In El Salvador, the 'Trump of Latin America' stuns the world with a speech slamming woke policing after winning a landslide election
Tucker’s interview with Putin is over 50M views on X within the first 5 hours.
Finnish Airline, Finnair, is voluntarily weighing passengers to better estimate flight cargo weight
President Nayib Bukele has proudly announced El Salvador's remarkable achievement of becoming the safest nation in the Western Hemisphere.
Former Chilean President Sebastian Piñera Dies in Helicopter Crash
This farmer seems to understand science a bit more than the event organizer, Klaus Schwab.
Facebook turns 20: From Mark Zuckerberg's dormitory to a $1trn company
The Coolest Dictator in the World" on the Path to Victory in El Salvador
Macron, France and fake news
Indian-Origin Man 'King' Arrested For Smuggling $16 Million Drugs Into US
Can someone teach Americans that not every person with slanted eyes is Chinese?
Europe's Farmers Feeding the People, Protesting Against Politicians Who Do Nothing for Their Country and Serve Only Themselves at Taxpayers' Expense
Paris Restaurant That Inspired 'Ratatouille' Loses $1.6 Million Worth Of Wine
Brazilian Police Investigate Bolsonaro's Son for Alleged Illegal Spying
Police in Brazil Raid Residence of Bolsonaro Associate Over Allegations of Illegal Spying
Border Dispute Escalates as Texas Governor Vows Increased Razor Wire
OpenAI Enhances ChatGPT-4 Model, Potentially Addressing AI "Laziness" Issue
The NSA finally acknowledges spying on Americans by acquiring sensitive data
Report Reveals Toxic Telegram Group Generating X-Rated AI-Generated Fake Images of Taylor Swift
US Border Patrol States 'No Plans' to Remove Razor Wire Installed in Texas
Bitcoin Experiences Approximately 20% Decline in Value
Klaus Schwab recently appointed himself as the Earth's "trustee of the future."
DeSantis Drops Out, Endorses Trump.
Nikki Haley said former President Trump is "just not at the same level" of mental fitness as he was while president in 2016.
Residents of a southern Mexican town set the government palace on fire in response to the police killing of a young man
Samsung Launches AI-Driven Galaxy S24, Ushering in New Smartphone Era
Judge Questions SEC's Regulatory Overreach in Coinbase Lawsuit
The Ecuador prosecutor who was investigating the television studio attack, has been assassinated.
Is artificial intelligence the solution to cyber security threats?
Vivek Ramaswamy suspends his US election campaign and endorses Trump.
Viral Satire: A Staged Satirical Clip Mistaken as Real Footage from the 2024 World Economic Forum in Davos
The AI Revolution in the Workforce: CEOs at Davos Predict Major Job Cuts in 2024
Ecuador Reports 178 Hostages in Prison Gang Standoff
The Startling Cuban Espionage Case That Has Rattled the US Government
Two Armed Men in Ecuador, Dressed as Batman and The Joker Storm the Streets.
Armed Gang Raids Ecuadorian TV Station Following State of Emergency Declaration
Anti-Democratic Canada: Journalist Arrested for Questioning Canadian Finance Minister on Support of Terrorist Group
Ecuador's 'Most-Wanted' Criminal Vanishes from Prison
Mexican Cartel Supplied Wi-Fi to Locals Under Threat of Fatal Consequences for Non-Compliance
Border Surge Leads to Over 11,000 Migrants Waiting in Northern Mexico
Outsider Candidates Triumph in Latin American Elections
As Argentina Goes to the Polls, Will the Proposal to Replace the Peso with the Dollar Secure Votes?
Fatal Shark Attack Claims Life of Boston Woman Paddleboarding Near Bahamas Resort, According to Police
×