The Summit for a New Global Financial Pact, which was initially aimed at financing poor and vulnerable countries, was assessed on the basis of its contribution to improving this financing. FERDI's AIFD Chair has put forward ten recommendations to strengthen this contribution, while examining how they might be implemented. They aim to address situations of poverty and vulnerability.
Four of the ten recommendations were discussed more specifically with the qualified personalities, with a view to the follow-up to the summit:
- In addition to income, multidimensional vulnerability should be taken into account when allocating concessional funds. After the plea made in favor of this idea by senior political figures in the morning at Palais Brongniart, we explained how this principle can be implemented, in particular by reforming the MDB allocation formula. If there is a special envelope for adaptation, it is the physical vulnerability to climate change that must be taken into account.
- Massively encourage private investment to reduce poverty and vulnerability, with public support if necessary and depending on its impact, giving priority to investment geared towards local entrepreneurship and agricultural sectors, which may involve the creation of a dedicated financial tool. Poverty reduction is also expected from the largest investments, particularly in infrastructure, by means of appropriate support from the MDBs, implemented through a reorganization integrating support for the private sector into their country strategy.
- Act quickly when major shocks occur. One proposed solution is contingent debt treatment. And for poor and vulnerable countries that are not heavily indebted, access to automatic financing to prevent their collapse.
- Establish a body to monitor financial flows to the South and assess their compliance with the objectives, in particular their orientation towards poor and vulnerable countries. This body would deal with all flows intended for development and global public goods, not just ODA. Its membership should be broader than that of the DAC, including poor and vulnerable countries and other international coordination bodies.
.jpg)
