President Ali calls for financial reform so developing nations can achieve sustainable development

In a call to world leaders, President Dr. Mohamed Irfaan Ali emphasized the importance of improving financing options for developing countries. The President acknowledged that sufficient financing is crucial in achieving sustainable development goals, particularly in ensuring food and energy security, as well as addressing the impacts of climate change.

President Ali reiterated the call while speaking on Wednesday, at the High-level Dialogue on Financing for Development on the sidelines of the United Nations General Assembly in New York, USA.

President, Dr Mohamed Irfaan Ali

The engagement provides an opportunity to reinvigorate international commitment to the Addis Ababa Action Agenda, showcasing areas of global progress. In addition, it raises awareness about emerging challenges to finance for development, as well as new solutions to align and mobilise resources for the 2030 agenda.

The president pointed out that the current financial architecture does not bode well with the needs of developing countries and threatens development progress.

“The lack of progress is directly linked to the deficit in available financing to developing countries. The consensus is that the existing financial architecture is incapable of addressing the global challenges confronting us – food insecurity, energy insecurity, and the impacts of climate change,” the head of state underscored.  

For context, 60 per cent of least developed countries (LDCs) are in debt distress or are at a high risk of debt distress, meaning countries have or will have, a difficult time repaying their debts.

These countries dedicate an average of 14 per cent of the domestic revenue to interest payments compared to 3.5 per cent in developed countries, President Ali pointed out.

Additionally, interest rate hikes and soaring debt levels will cost developing countries billions in the coming years.

In the area of climate change, the International Energy Agency (IEA) estimates that to limit the rise of global temperatures to less than two degrees Celsius, investments in the energy sector will need to be increased to approximately $1 trillion per year to transition from fossil fuel.

“This is most sobering when we consider that close to 900 million people in developing countries have no access to electricity. Commitments that have been and are being made must be fulfilled. The financial architecture that is out of sync with the needs of developing countries must be reformed,” President Ali expressed firmly.

He added, “The early adoption of a multi-dimensional vulnerability index, implementing the measures in the Bridgetown initiative and addressing liquidity support, private capital, development lending and more inclusive governance of the international finance institution must form part of the reform agenda.”

President Ali reiterated Guyana’s firm commitment to continued collaboration with the international community on measurable actions to achieve the SDGs.

The president is currently in the US and will be attending several forums to advance talks on the SDGs, financing, and climate change.