PRIME Minister Andrew Holness and United Nations Secretary General Antonio Guterres have decried the lopsided nature of the international economic and financial system, calling for more reform that would lead to fairer treatment of small developing countries such as Jamaica.
Speaking to journalists at a joint press conference at Jamaica House on Monday, Holness noted that since 2016 the Jamaican Government and Canada's Prime Minister Justin Trudeau have consistently pushed for this reform, and he was pleased to see new initiatives built on the foundation laid.
"We note the financial institutions have been responsive to calls for reform in this respect, which gives hope for progress to address funding gaps and to provide emergency liquidity to developing countries of resilience building. But there is still much more work that needs to be done," Holness stressed.
At the same time, Guterres described the financial system as dysfunctional and unfair, arguing that there is a serious moral problem with it, as well as a problem of power and practicality.
He pointed to the situation countries such as Jamaica faced in the scramble for COVID-19 vaccines, which were not evenly distributed, and the struggle for pandemic recovery.
"We all remember that Europe, the United States and other rich countries were able to print trillions [of dollars] to support their economies after COVID, for the recovery of their economies, to support their populations. I don't think Jamaica had the possibility to print money, and most developing countries had not that possibility," Guterres argued.
He said this partly contributed to the increase in inflation and interest rates that all developing countries are now experiencing.
"Then, because there was a huge global liquidity problem, the IMF (International Monetary Fund) was able to issue special drawing rights. The countries of the European Union, 500 million people, received US$160 billion. The African continent, three times the population, received US$34 billion. There is something fundamentally wrong in the rules because these are the rules of the system that allow for these injustices to take place," Guterres said.
He added that a lot more can be done in multiplying the effect of the work of multilateral development banks, suggesting that they "change their business model" and use their resources to "leverage massive access to private finance at reasonable costs for developing countries".
The secretary general also insisted that much more can be done in new instruments that allow swaps between debt and investment in adaptation for climate change.
"So, there are lots of things that can be done if there is political will to do so, even if we will not be able to solve — and I hope we will be sooner or later — the moral problem and the power problem," he stated.
Holness commended the UN's steadfast support in the development of a multi-dimensional vulnerability index, to more accurately assess the true state of small island developing states and increase their eligibility to receive financing to address their unique vulnerabilities and challenges, including climate change.
Guterres was in the island from May 14-15 on a working visit.
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