Published 9 June 2023 in News
On June 22 and 23, 2023, a Summit for a New Global Financing Pact will be held in Paris, organized by France. Many leaders from States, governments, international organizations, civil society and the private sector will be invited to discuss solutions for financing global development and the climate transition.
In order to decipher the stakes of this Summit, Focus 2030 aims to gather and highlight the point of view of organizations that are expert in their respective fields and is conducting a series of interviews with representatives of governments, international organizations, NGOs, think tanks, and others.
Discover our Special Edition about the Summit for a New Global Financing Pact and all the interviews with experts conducted ahead of the Summit.
Written interview received on May 28, 2023.
Focus 2030: The Paris Peace Forum, a platform for dialogue and cooperation on global governance solutions, is involved the organization of the Summit for a New Global Financing Pact, to be held in Paris on June 22 and 23. The Summit will focus on proposing financial solutions to the climate, debt and development challenges facing the world’s most vulnerable countries. What is the Summit’s philosophy? How can we ensure that the demands of all the groups concerned are heard, beyond the participation of State representatives?
Justin Vaïsse: We’ve come a long way since the Congress of Vienna, and I believe that over the past thirty years or so, international decision-makers have come to understand the importance of including the voices of civil society when collective decisions affecting the future of humanity are taken - mainly to safeguard their legitimacy. It is, of course, around the COP process that this multi-actor participation has been most observed, with the 2015 COP21 in Paris as the high point. Let’s be clear : at these summits, civil society is not on an equal footing with government decision-makers, who have the final say. The core of the reactor, so to speak, remains intergovernmental. But the presence and participation of a significant number of civil society actors on the meeting sites can be a game-changer, as it puts pressure on negotiators, constrains their choices and pushes for greater ambition and accountability. The transparency it brings also helps to reduce diplomatic maneuvering and hypocrisy (e.g. double standards between the negotiating and domestic arenas). Turning to the June summit, the Paris Peace Forum is helping to build this platform for civil society engagement, to make the voices of the South heard, so that the people present at the Palais Brongniart are more representative of the whole world, and of the groups most affected by the decisions that I hope will be taken.
Focus 2030: The Summit has raised many hopes of finding financial solutions to the challenges we’ve just mentioned. What do you think a successful Summit would look like, and under what conditions?
Justin Vaïsse: It’s clear that the Bretton Woods institutions are no longer adapted to the world we live in, with its more frequent climate disasters that disrupt long-term financing and repayment plans overnight and set back the affected countries by several years, with the need to finance climate adaptation for which the private sector obviously lacks interest, but also with the transformations in the very notion of development, much called into question in recent years. When we help protect the Amazon rainforest by developing local economic alternatives, are we fighting poverty in Brazil, or are we fighting climate change in our own interests? And then there’s the urgent need to tackle the debt problem, which has exploded as a result of rising interest rates, threatening many low- and middle-income countries.
For me, the two main markers of the summit’s success would be, on the one hand, a paradigm shift, a new consensus on the means and tools for financing development and climate, which would be a North-South consensus, and on the other hand, a series of more concrete advances, deliverables to be confirmed at subsequent international meetings (G20, UNGA, COP28 in particular), which would notably enable the Bretton Woods institutions and their practices to evolve. The list is well known : debt suspension clauses in the event of a climate catastrophe, conversion of SDRs into financial resources for developing countries, increased World Bank lending, etc. It will take time, but I think it’s essential to go beyond traditional fiscal resources. It seems obvious to me that fossil fuels should finance large-scale renewables, for example - it’s up to us to find the mechanisms for this.
And if we take a step back, I think it would be great if civil society could be heard and help build a form of North-South consensus, given that the question of allocating financial flows to poverty or climate change is essential - and on this point the disagreement on arbitration is not just between North and South, but also between countries of the South. I would add a final objective, one of raising awareness among the populations of the North of their responsibility in this matter. It’s not a matter of admitting guilt, but simply of recognizing that the bulk of climate change is caused by Northern countries, that rising interest rates also come from us, all the while recognizing that we control the main levers of action. Behind the North-South consensus, there is a great deal of work to be done in the North.
Focus 2030: This Summit is being held at a particular international juncture, at a time of major polarization between different States, crystallizing in particular around international measures to combat climate change and reduce debt. Is it possible to build a consensus around a reform of the international financial architecture in such a context?
Justin Vaïsse: That’s right: this summit is taking place against a backdrop of polarization, particularly between China and the United States, not to mention the war in Ukraine. When I was in Washington for the IMF and World Bank spring meetings, I was struck by the extent of Sino-American rivalry in these financial issues, which was not really the case before. The truth is that China now holds a significant share of the debt of the countries of the South, so it is difficult to restructure without its involvement. Yet, China is not a member of the Paris Club and weighs only around 6% at the World Bank and IMF, instead of the 16% or more its GDP would entitle it to - and in this respect, it is Western countries that ought to make their move. At the same time, it is often reluctant to write off the debts of distressed countries, and its receivables are sometimes opaque. Without going into the details of this debate, it’s clear that we need more coordination, and the announcement of a high-level Chinese participant to the Summit, probably the Prime Minister, is a good omen.