UN Secretary General says moral problem exists in int’l financial system
KINGSTON, Jamaica (CMC) – The United Nations Secretary General, Antonio Guterres on Monday called for an end to a “moral” problem which he used to describe the “injustice” in the existing world economic order.
“We are, today, facing when we look at the present international financial architecture, a moral problem, a power problem and a practical problem,” Guterres, who held talks with Prime Minister Andrew Holness told a news conference.
The UN Secretary General, referring to the moral problem, reminded journalists that during the coronavirus (COVID-19) pandemic “vaccines were not evenly distributed.”
“You all remember that Europe, the United States and other rich countries were able to pinch billions in order to support their economies after COVID, the recovery of their economies to support their populations.”
He said adequate care was not taken and that led to increases in inflation. Developing countries are now feeling the brunt of their policies.
“Then, because there was a huge global liquidity problem, the IMF was able to issue special drawing rights (SDR),” he said, noting that some countries like Europe received US$180 billion, while African countries, three times the population of Europe, received US$34 billion.
“There is something fundamentally wrong in the rules because these are the rules in the system which allow for the injustice to take place,” he said, noting small island developing states “do not face adequate debt relief mechanisms and do not face the possibility of access of concessional funding at the level that is necessary because they are considered to be middle-income countries.”
“This is injustice because small island developing states in particular have a high level of vulnerability because of the structure of their economies, because of their geographic location, their size and because of the enormous impact they suffer because of climate change,” he added.
“So there is a serious moral problem in the international financial system. And there is a power problem,” Gutteres continued.
“They are outdated and so the system is unfair and dysfunctional. The system needs reform to adapt it to the realities of the global economy.”
