By Lehlohonolo Lehana.
President Cyril Ramaphosa called on the United Nations Biennial Summit to fast-track the reforming of global tax rules to curb the illicit financial flows.
Ramaphosa was participating in the inaugural Biennial Summit for a Sustainable, Inclusive and Resilient Global Economy, convened and chaired by UN Secretary General António Guterres.
Guterres envisioned the summit as a platform to bring coherence, ambition and inclusive induction to the global financing conversation. “We also understand that today’s international financial architecture needs reform to respond to the world of today and the scale and complexity of its challenges.”
Scarce public resources and an unfair system necessitate the reform. “There is a huge bias against the interests of the developing countries,” the UN general secretary said.
UN Economic and Social Council President Lok Bahadur Thapa said the summit was designed to strengthen systemic links between the United Nations and international financial institutions. Trade frictions are eroding trust in the multilateral trading systems, and “our task is to restore the trust… It also means ensuring reforms are inclusive, equitable, and legitimate,” Thapa said.
Ramaphosa said a succession of crises had exposed the fragility of interconnected economies and revealed deep inequities in the capacity to respond.
“While some nations are able to mobilise trillions to shield their citizens and economies from pandemics and other emergencies, others are left constrained by debt and denied fair access to global capital,” he explained.
He urged the need to mobilise affordable, accessible financing from a wide range of sources, calling for strengthened coordination by the UN.
“We must strengthen coordination between the UN, the African Union, the G20, international financial institutions and other global financial actors, embedding inclusivity at the heart of global economic governance,” he said.
He noted that beyond financial instruments, there was a need for commitments that would be honoured and global rules that would be shaped by all members, not just a few.
Ramaphosa urged the rechannelling of unused Special Drawing Rights to countries in need, and to scale up concessional finance through development banks.
“Let us forge a new compact for financing sustainable development rooted in solidarity, equity and mutual accountability. South Africa stands ready to ensure this Summit becomes a turning point in our collective effort to build a sustainable, inclusive and resilient global economy,” he highlighted.
International financial institutions, including the WTO, the IMF, the World Bank and regional banks, joined UN member states on Wednesday in discussing and addressing the critical challenges facing development finance.
IMF Managing Director Kristalina Georgieva held that the global economic system is being reset in multiple ways, adding that the IMF will “continue to play a very constructive role and support financially our members, especially lower-income countries.”
“The trading system needs deep reform,” said WTO Director-General Ngozi Okonjo-Iweala. “We should deploy scarce resources more effectively.”
“Africa’s voice has too little influence in shaping global economic governance. Today, this summit provides an inclusive platform where the priorities and needs of African countries can be heard and translated into global action,” said African Union Commission Chairperson Ali Youssouf. “Africa’s financing needs are immense.”
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