Summit for a New Global Financing Pact: towards more commitments to meet the 2030 Agenda?

On June 22-23, 2023, France is set to host an international Summit for a New Global Financing Pact. Called for by French President Emmanuel Macron, how does this summit fit into an international context marked by the cascading consequences of concurring climate, energy, health and economic crises, particularly in the most vulnerable countries? What can the international community and international solidarity actors expect from it? Latest intel and analyses.

France will host in Paris, on June 22 and 23, 2023, the Summit for a new global financing pact, whose stated goal is to build a new contract between the countries of the North and the South to address climate change and the global crisis. This event will be an opportunity to address key issues: reform of multilateral development banks, debt crisis, innovative financing and international taxes, special drawing rights (SDRs)... Analysis. 

Context and stakes behind the Summit for a New Global Financing Pact

In November 2022, on the occasion of the G20 Summit and at the end of a COP27 with mixed results, Emmanuel Macron announced the organization of an international conference in Paris in June 2023, aimed at taking stock “on all the means and ways of increasing financial solidarity with the South”.

This announcement took place in a particular international context: while the climate crisis threatens in particular the countries of the Global South (and including island states), the Prime Minister of Barbados, Mia Mottley, has been leading since COP26 an initiative for financing climate action. This "Bridgetown Initiative" aims to facilitate access to international financing for the countries most vulnerable to climate change to enable them to better respond to climate challenges.

While President Emmanuel Macron’s announcement is in line with the Bridgetown initiative, the June 2023 summit aims to propose solutions to finance issues that go beyond the climate question, including access to health and the fight against poverty. The Covid-19 pandemic, the war in Ukraine and their successive consequences have indeed reduced the fiscal and budgetary space of many countries, affecting their ability to finance their populations’ access to basic social services. As a result, the UNDP noted a decline in human development in nine out of ten countries around the world in 2022, mainly due to a drop in life expectancy and an increase in poverty.

In a statement on January 6, 2023, Catherine Colonna, the French minister of Europe and Foreign Affairs, declared the summit would aim to “build a new contract with the North and the South”, in order to facilitate the access of vulnerable countries to the financing they need to address the consequences of ongoing and future crises.

The same day, the Secretary of State for Development, Francophonie and International Partnerships, Chrysoula Zacharopoulou, and the Permanent Representative of France to the OECD, Amélie de Montchalin, took part in a webinar organized by the Finance for Development Lab on the issues at stake at the upcoming Summit. On this occasion, four main objectives were announced, which will be followed up on by four working groups :

• Restore fiscal space to countries facing short-term difficulties, especially the most indebted countries
• Fostering private sector development in low-income countries
• Encourage investment in "green" infrastructure for the energy transition in emerging and developing countries
• Mobilize innovative financing for countries vulnerable to climate change.

In addition, a group of high-level experts, the One Planet Lab, will be responsible for formulating proposals to mobilize innovative sources of financing.

The Summit’s ambition is to bring together several agendas (climate, development, debt) and to propose innovative solutions to address these issues. It is part of a series of other international events that will take place during the year (G20, SDG Summit, COP28, etc.) and aims to push for concrete results on these occasions. In order to ensure its success, the organizers have expressed their interest in benefiting from the contributions of civil society and private sector actors.

The Summit is scheduled to take place on 22-23 June 2023 in Paris, as announced in a joint statement by the Franco-German Council of Ministers on January 22. The first day of the Summit will be punctuated by an opening ceremony, followed by 6 round tables, 30 branded events and over 50 parallel events. A closing ceremony will take place on the morning of June 23 to announce the conclusions of the Summit discussions.

Numerous leaders have already been confirmed, including Mia Mottley, Prime Minister of Barbados, Olaf Scholz, Chancellor of Germany, Filipe Nyusi, President of Mozambique, Luis Inacio Lula Da Silva, President of Brazil, and many others. Numerous representatives of international organizations, philanthropists and activists will also be present: Ajay Banga, President of the World Bank, Antonio Guterres, Secretary General of the United Nations, Ursula Von der Leyen, President of the European Commission, Vanessa Nakate, activist and UN Goodwill Ambassador, Melinda French Gates, philanthropist and co-founder of the Bill & Melinda Gates Foundation, and more.

The preparation of the summit is carried out by a high-level international steering committee composed of states and international organizations. It includes France, Barbados, South Africa, Germany, Brazil, China, the United Arab Emirates, the United States, India, Japan, the United Kingdom, Senegal, the European Commission, the United Nations Secretariat, the International Monetary Fund, the World Bank and the OECD.

Civil society campaigns

• In its campaign "It’s time to make big polluters pay", CARE France calls on governments to tax the super profits of fossil fuel companies. A campaign available in English and French.

• ONE’s #FundtheFuture campaign calls for reform of the multilateral development banks to free up billions of dollars for development. As part of the campaign, ONE has developed an online tool to understand the parameters of how World Bank reform could result in billions of dollars in additional lending. In addition, 120 public figures signed an open letter to the new World Bank chief outlining 10 demands for his first 100 days in office. A cartoon by Safely Endangered artist Chris McCoy completes the initiative.

• Through its "Power Our Planet" campaign, Global Citizen is calling for urgent reform of the global financial architecture to build a sustainable, just and equitable world. In particular, Global Citizen is inviting citizens to sign a petition addressed to world leaders and financial institutions, urging them to keep their commitments, increase their financial support and implement a carbon tax.

• Ahead of the Summit for a New Global Financing Pact and in the context of multilateral development bank reform, the Pandemic Action Network and 19 organizations from around the world have issued a statement calling for the inclusion of pandemic debt relief clauses in new country lending agreements.

• Save the children publishes 3 key principles to guide the Summit in ensuring that no child is left behind. The organization is calling for children’s voices and rights to be at the heart of the Summit’s preparations, discussions and conclusions, urging the international community to recognize that children are bearing the full brunt of the current polycrisis - particularly those most affected by inequality and discrimination - and to take action accordingly.

To go further

To find out more about the issues that will be debated on the occasion of the Summit, the following documents can be consulted (list updated regularly):

• On the reform of the multilateral development banks:

• World Bank roadmap dating from 18 December 2022 on the evolution of its missions, operations and resources.
• Paper by the "Sovereign Debt" chair at Sciences Po published on 28 November 2022 on the links between finance, climate and global debt and on the reinvention of multilateral development banks.
• Discussion paper by Global Health Advocates on the role of multilateral development banks in the financing of global health, especially during the Covid-19 pandemic.
• Climate Policy Initiative discussion paper on reforming international financial institutions to benefit developing countries.

• On Special Drawing Rights (SDRs):

• Presentation by the African Development Bank dating from 3 February 2022 on the impact of special drawing rights for developing countries.
• Article from ONE published in September 2022 and updated in March 2023 dedicated to the presentation of SDRs and their stakes in responding to current and future crises.
• Most European countries have committed to reallocating part of their SDRs, but face informal opposition from the European Central Bank, which argues that legal obstacles would prevent member states from making this reallocation through multilateral development banks. The Finance for Development Lab puts forward four arguments against this position in its latest policy note published in May 2023.

• On taxes and innovative financing:

• IDDRI Note from April 2023 on the different possible fiscal instruments to finance loss and damage.
• Oxford Climate Policy Note on financing the loss and damage fund through the implementation of international taxes (airline tickets, maritime tax, etc.).

• On global debt:

• Finance for Development lab working paper published on March 14, 2023 on the rise of debt in the global South between 2011 and 2021.
• Finance for Development Lab report published on 17 January 2023 proposing an analytical framework for assessing economic adjustment and debt restructuring measures.
• Methodology paper and introduction to Finance Development Lab’s new public debt decomposition tool, published on June 5, 2023.
• Paper by the Centre for Disaster Protection and UKaid on debt standstill clauses in the event of climate-related disasters.
• Study carried out by the Debt Relief for a Green & Inclusive Recovery project on the debt crisis in developing countries and the financial needs to be mobilized to tackle it.
• Sustainability-linked Sovereign Debt Hub paper on building a viable market for sustainability-linked debt can address the triple challenge of public debt, climate shocks and natural degradation.
• Global Citizen analysis in favor of debt standstill clauses in the event of climate disasters in vulnerable countries.

• On Financing global public goods:

• Center for Global Development note published on 17 January 2023 on the future of global health spending in the context of multiple crises.
• Center for Global Development paper published on 13 January 2023 on the links between rising debt and health spending.
• IDDRI report published in January 2023 on the international financing of biodiversity in the South.
• Avaaz position paper on why biodiversity must be at the heart of all IMF policies, published April 2023.

• On the Bridgetown Agenda:

• World Economic Forum article published in January 2023 that breaks down the issues at stake in the Bridgetown initiative.
• Interview with Avinash Persaud, Barbados Prime Minister’s special envoy for climate finance, on the Bridgetown initiative in The Week.

• Cross-sectional documents:

• Report by the UN Secretary General on reviving the Sustainable Development Goals to achieve the 2030 Agenda in the face of the current global crises.
• Policy brief from the United Nations Development Programme (UNDP) that outlines the elements needed to overcome the current crises and achieve the Sustainable Development Goals.
• Ferdi working paper "Financing global policies : but for whom?" on defining and addressing vulnerability criteria for financing development.
• Finance for Development Lab Policy Note which summarizes the official priorities for the Summit for a New Global Financing Pact.
• Accra-Marrakech Agenda adopted on April 16, 2023 by the V20, the group of 58 countries most threatened by the consequences of climate change, which sets out their expectations in terms of reforming the global financial architecture ahead of the Summit for a New Financial Pact and other international events.
• Climate Action Network International and its partners to transform the financial system through 7 key measures.
• ECDPM study published on June 8, 2023, presenting solutions to make the European Union’s institutions and member states more responsive to the challenges of international sustainable development.