COP27: Barbados PM calls to reform IMF and World Bank, finds support from US, France

Over 77 years after the end of World War II, the world leaders gathered at the UN's climate change Conference of Parties (COP27) in Egypt, are considering reforms in two of the world's most significant financial institutions: the World Bank and International Monetary Fund. Both World Bank and the IMF were created in 1942 to help the rebuilding efforts in the countries devastated by the second World War. But in 2022, a big number of world leaders say that an overhaul of the two crucial global institutions is necessary to address the challenges posed by the growing effects of climate change worldwide.

The climate change-oriented reforms in the World Bank and IMF currently bear the face of the 'Bridgetown Initiative', named after the capital of the Caribbean nation Barbados. Prime Minister Mia Mottley put forward the initiative earlier this year by gathering economists and senior officials of the United Nations in Barbados' capital Bridgetown. The initiative called for the need to develop long-term financial instruments that can mobilise $3-4 trillion in finance for carbon-cutting projects and a mechanism for raising reconstruction grants to help nations rebuild after climate disasters.

WATCH |WION Climate Tracker | COP27 Summit: Egypt looks at developed nations to fulfil financial purpose

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This can be done: US envoy John Kerry

John Kerry, President Joe Biden’s special climate envoy, said at a Bloomberg News event on the sidelines of COP27 on Wednesday that reforming the World Bank could ensure the release of previously unavailable capital that could save lives.

"That can be done," he said, adding that if everything goes as planned, it could result in more than $1 trillion in new funding. "That’s real stuff."

President Emmanuel Macron of France said on Monday that he supported Barbados Prime Minister Mia Mottley’s plans and supported her calls for the formation of a task force that would make recommendations for new climate financing programs before the annual meetings of the World Bank and I.M.F. in Washington.

"Those institutions need to come up with concrete proposals to activate these innovative financing mechanisms, to develop access to new liquidity, new concessional financing ideas for emerging economies, to propose solutions taking into account vulnerability," Emmanuel Macron said on Monday.

The World Bank and the IMF are the products of a 1944 Bretton Woods Conference in which delegates from 44 countries gathered to design a more interconnected global financial system.

Barbados Prime Minister Mia Mottley, in her address to the world leaders on Monday, said, "Yes, it is time for us to revisit Bretton Woods."

"Yes, it is time for us to remember that those countries who sit in this room today did not exist at the time that the Bretton Woods institutions were formed for the most part. And therefore, we have not seen, we have not been heard sufficiently."

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