Mia Mottley hints at G-7 support for the Bridgetown Agenda at COP 27

Barbados Prime Minister Mia Mottley is “quietly confident” that her proposals to reform the international financial system to better serve crisis-affected lower-income countries will be adopted, and suggested to Devex that her agenda may have backing from one of the Group of Seven leading industrial nations. The reforms, known as the Bridgetown Agenda after the capital of Barbados, are “resonating with a number of people,” Mottley told Devex Monday on the sidelines of the 27th United Nations Climate Change Conference in Sharm el-Sheikh, Egypt. “It’s pleasing, but I think it resonates because what we’ve done is take the experiences of people, and put them in one place, and to say look, if this international financial system is going to work for us, we need reform, and these are the areas we see the reform,” Mottley said. Mottely said she wanted to “strengthen [the system], but it needs to be able to work for us in the immediate needs that we have.” Asked by Devex who her allies were among G-7 on the Bridgetown Agenda, she replied, “I think you’ll soon find out.” Both France and Canada have been linked to the proposals, and Mottley is co-chairing a meeting on climate finance with French President Emmanuel Macron at COP 27. The Bridgetown Agenda proposals featured in a list of demands Mottley made Monday when she addressed world leaders in a high-level COP 27 event. She told them that flaws in the global financial architecture cripple the global south from adapting to and mitigating against the climate crisis as they simultaneously face “apocalyptic weather” that devastates their populations. “The global south remains at the mercy of the global north,” she said. Mottley has shot to prominence for her climate justice advocacy on behalf of low-income countries and has taken a leading role in advocating for a more equitable global system to address the crisis. Many climate advocates hope this year’s annual climate summit serves as a turning point for countries to move from pledges to implementation. While many lower-income countries want to be part of the solution to the climate crisis, the status quo — in which financial systems that don’t serve their needs — makes that impossible. And when they can't access financing for their own transitions to green economies, many will inevitably exploit gas reserves instead. “This world still looks too much like it did when it was part of an imperialistic empire. The global north borrows between interest rates of between 1 to 4%. The global south at 14%. And then we wonder why the just energy partnerships are not working,” she said to world leaders, adding that climate-vulnerable countries need concessional financing — or below-market-rate finance provided by financial institutions. She called for a trust focused on climate mitigation to unlock trillions of private sector financing and for the allocation by the International Monetary Fund of 500 billion Special Drawing Rights (approximately $650 billion) — SDRs are an international reserve asset that can provide countries with liquidity. Last year, IMF issued $650 billion, the vast majority of which went to wealthier nations and only $21 billion went to the poorest countries. Many wealthy countries have yet to reallocate their share, including the U.S., where Congress has blocked any such move. Motley also argued that standing in the way of future issuances is the U.S. Congress — as it has an effective veto over fresh distributions over certain thresholds. Civil society has pushed for the establishment of a funding mechanism around “loss and damage” for countries pummeled heavily by climate disasters. But this has been controversial because it deals with issues around the liability of wealthier nations that grew their economies by burning fossil fuels. Parties to COP 27 have agreed to add loss and damage to the agenda, but in a watered-down form, which does not include liability or compensation. Mottley said this conversation cannot only include high-carbon emitting countries but must also include oil and gas companies. “How do companies make $200 billion in profits in the last three months and not expect to contribute $0.10 on every $1 of profit to a loss and damage fund?” she asked. She also emphasized the need for natural disaster and pandemic clauses on debt instruments, which would give countries grace on repayment timelines. “What we get is the flexibility in the first two years to address issues of damage and loss,” she said. And the current monetary management system is outdated, she said, calling for the world to “revisit Bretton Woods.” The Bretton Woods Institutions — IMF and the World Bank Group — were formed in 1944 in the wake of the Second World War. Many countries today weren’t even in existence at that time, she said, meaning those countries’ interests were not built into the structures of the institutions when they were founded. “There needs to be a new deal in respect to the Bretton Woods institutions and we need to ensure that they have a different view to their risk appetite; that we look at the [Special Drawing Rights] and that we look at other innovative ways to expand the lending that is available from billions to trillions,” she said. Update: Nov. 9, 2022: This piece has been updated to reflect that Mottley referred to 500 billion in Special Drawing Rights, which comes to about $650 billion, as well as clarifications on the foundations on the Bretton Woods Institutions.