In her speech at the 2022 United Nations Climate Change Conference or Conference of the Parties in Egypt the Prime Minister of Barbados Mia Mottley observed that in the area of global financing the world today still has a noticeable resemblance to the era of Caucasian imperialistic empires.
Prime Minister Mottley, who has been championing the cause of major reforms in international financing and the institutions largely responsible for global financing, lamented that countries of the Global South are still disproportionately at the mercy of the countries of the Global North.
To drive home her point about the disparities in concessions existing between the Global North and the Global South, Prime Minister Mottley cited the borrowing interest rates extended to the North, which stood at between one to four per cent. Conversely, nations of the Global South were paying interest rates in the vicinity of 14 per cent on loans from international lending agencies.
In another forum organised by the Rockefeller Foundation, Prime Minister Mottley decried the fact that interest rates on existing loans extended to her country had been raised by the World Bank and the International Monetary Fund (IMF). She frankly stated that she had to beg the World Bank for a loan after Barbados was devastated by the COVID-19 crisis. After granting the loan, the World Bank raised the interest rates from 1.09 per cent to 5.48 per cent. Prime Minister Mottley also pointed out that the repayment period of loans from the international lending agencies was shorter than the repayment period for a personal mortgage.
Andrew Mitchell, the current minister of state for development in the British Government, augmented Prime Minister Mottley's message in the same interview by stating that there is mounting anger around the world among the poor because of the failure of the richer nations to deliver on the promises made to alleviate the plight of the poorer nations.
The lack of political will was cited as the major obstacle in the path of raising and disbursing finances so badly needed by the Global South as poor nations grapple with the aftermath of the COVID-19 crisis, diminishing financial liquidity, climate crises, and a host of other existential threats.
The disparities in the international system of finance clearly have many nations of the South walking on a tightrope. The deputy secretary general of the IMF is on record stating that 52 developing countries, home to half the world's poor, are suffering from severe debt problems. This source adds that 25 of the 52 developing nations are being forced to spend 20 per cent or more of their public revenue on servicing external debt.
The perpetuation of the current global status quo in international financing can only spell disaster in the near future for most of the human family. The hoarding of wealth in the Global North and by multinational corporations will only serve to exasperate social and political conditions in the Global South. Without the much-needed correctives being advanced by Prime Minister Mottley in her Bridgetown Initiative, many of the 52 nations on debt row could disintegrate and become failed states.
Towards the end of the interview hosted by the Rockefeller Foundation, a journalist asked if she foresaw or was looking forward to social unrest as a result of the inertia and the slow rate of change in the system of international financing. After dismissing the question as a no-brainer, Prime Minister Mottley used the question as a platform to make the point that reforming the global system of financing should be seen as an investment and not an act of charity to the Global South.
In her closing statement Prime Minister Mottley threw out a solidarity challenge to the people of the Global North who are equally being impacted by climate change and the same economic issues confronting people of the Global South. In her final salvo, she charged the masses in both regions to pressure their leadership to act in the best interest of humanity and the planet that we call home.
Lenrod Nzulu Baraka
Founder of Afro Caribbean Spiritual Teaching Center
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