In a third iteration of the Bridgetown Initiative supported by several poor nations, Barbados will advocate for the establishment of a new World Bank financial facility to supply emergency cash to climate-vulnerable nations, according to people briefed on the preparations.
While there have been some improvements made, Barbados Prime Minister Mia Mottley informed the Council on Foreign Relations that more reforms of international financial institutions were required to address the mounting issues of high debt levels, climate change, and slower development.
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She stated, “The success that we need is a change of attitude and a resetting of attitudes across the world.”
She added, “Changing the rules of the game to allow us to be seen and heard is absolutely critical, particularly given the multiplicity of challenges that we are facing.”
The Bridgetown Initiative, which was initially published in 2022 and revised again in 2023, advocates for changes to lower borrowing costs for developing nations and emerging markets, of whom 70 are in danger of financial crisis.
Additionally, nations are researching a range of tax policies, including taxes on shipping and aviation as well as a tax on the ultra-wealthy, to generate the substantial amounts required to develop more climate-resilient economies without incurring additional debt.
According to the sources, Bridgetown 3.0 advocates for certain measures that might open up additional funding to support nations in adapting to climate change and strengthening their economy against shocks from natural catastrophes, all the while fostering long-term economic growth.
It projects that emerging markets and developing nations will require $1.8 trillion a year to address the climate catastrophe and investments connected to the environment, and an additional $1.2 trillion a year to accomplish other Sustainable Development Goals such as improving education, reducing poverty, and achieving sustainable development.
The agenda proposes that the Group of 20 Common Framework for Debt Treatment be reformed to make it more relevant and that international financial institutions provide developing nations with a bigger voice in governance and decision-making.
Additionally, it demands that the World Bank create a special “universal contingent finance facility” to offer emergency funding to all nations that are susceptible to climate change on low- or no-interest conditions in the event of a natural disaster.
The revised proposal also calls on donor nations, both new and old, to provide at least $120 billion this year to restock the World Bank’s low-income country arm, the International Development Association (IDA), and to mobilize an extra $500 billion annually from private sources.
The president of the Rockefeller Foundation and a former administrator of the US Agency for International Development, Rajiv Shah, praised the revised project and stated that, if put into action, it might help attract billions of dollars in additional funding for poor nations and emerging economies.
