Martin Kessler, economist at Finance for Development Lab, spoke on franceinfo this Friday after the closing in Paris of the Summit for a new financial pact.
During the Summit for a new financial pact which took place in Paris from Thursday 22 to Friday 23 June, Emmanuel Macron spoke of a “full consensus” For “in-depth reform” the global financial system, in order to make it “more efficient, more equitable and more adapted to today’s world”.
Martin Kessler, economist at Finance for Development Lab, spoke to him on franceinfo on Friday June 23 about a “mixed results” but he admits the summit helped raise “subjects for the next six months, or even the coming year”in particular on the debt of the poorest countries, he explained.
>> New global financial pact: what conclusions can be drawn from the summit organized by Emmanuel Macron to reconcile the North and the South?
France info: What is your assessment of this first summit dedicated to this desire to change global financing to help the poorest countries?
Martin Kessler: It’s a mixed record. In the end, there has been very little concrete progress. There were principles that were stated that are important, but in terms of results, we are still a little disappointed. Among the announcements, there are these 100 billion dollars for the climate which have been promised for ten years, it remains a little bit abstract. There are other elements that have been announced and it is not yet clear how the principles will be implemented.
With a peak of only a few days. Was it possible to get better results?
It was a very special summit. It’s neither a G20 nor a COP. It was hard to know what to expect. It was based on major principles of reform. The summit was announced, finally a short time ago, in November. There were technical discussions, many working groups. It was hard to expect real progress. However, among the progress, there is the energy that has been shown, the countries of the South have asked for things. They were able to have their voice really heard in the continuity of the Bridgetown agenda carried by the Prime Minister of Barbados, Madame Mottey.
What is the next step ?
One of the real advances from the summit is that there is a roadmap that details the next steps. So there will be decisions within the International Maritime Organization on this question of a maritime tax that could be reallocated to efforts to combat climate change.
Afterwards, in September, there will be a summit on climate finance in Africa, led by the President of Kenya. In October, the meetings of the World Bank and the IMF, which will focus on debt issues and fundraising for the poorest countries. The Paris summit, its advantage, is to have raised issues for the next six months, even the coming year and to give a mandate to these various international organizations to make progress, but that remains very uncertain.
The subject of the debt was not frankly mentioned. There is aid, obviously to fight against climate change, but the debt of these countries is quite heavy and their erasure has not been mentioned too much?
There has been major progress, particularly in the case of Zambia. This is a country that had been in discussions with its creditors for three years now and there was an agreement. I think this is really due to France’s diplomacy linked to the summit. There were blockages in connection with the disagreement between China, the IMF, the United States. The fact that it has been released is really progress because it is the second country to come out of what is called the “common framework” which is this framework created in 2021 for the most indebted countries. So it’s promising for the other countries that have entered into this framework, like Ghana or for the other countries that are over-indebted and are negotiating like Sri Lanka. Now the negotiations are going to be long.