The UN has highlighted a severe imbalance in global finance, where some of the world’s poorest nations allocate more resources to debt repayments than to health, education, and infrastructure combined. This financial strain severely impedes their economic development. UN Secretary-General António Guterres has called for a comprehensive overhaul of the international financial system, emphasizing that the current framework, established in 1945, is failing under modern pressures.
Guterres’ 2023 policy brief underscores that excessive debt is stifling critical investments in social protection and healthcare in these countries. With the deadline for the Sustainable Development Goals (SDGs) of the 2030 Agenda approaching, the urgency for reform is heightened. At the halfway mark in 2023, only 15 percent of the SDGs had been achieved, prompting a renewed push for progress at the recent SDG Summit.
The UN chief advocates for a “new Bretton Woods moment,” referring to the post-World War II agreements that led to the creation of the IMF and World Bank. He argues that the current global financial system, with its outdated structure and inequitable power distribution, is ill-suited for today’s challenges, including climate change, systemic risks, and extreme inequality.
Guterres proposes several reforms: increasing financial support to eradicate poverty, democratizing the decision-making processes of the IMF and World Bank, and establishing a new global body to oversee economic decisions, akin to an “Economic Security Council.” These proposals will be discussed at the upcoming Summit of the Future and will be reflected in the Pact for the Future, a document aimed at revitalizing the SDG commitments.
The Summit will also set the stage for the International Conference on Financing for Development (Ffd4) in Spain in June 2025, which will further address these global financial challenges.
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