UNCTAD Official Highlights Bridgetown Initiative's Urgency in Addressing Global Financial Challenges

A senior official of the United Nations Conference on Trade and Development (UNCTAD) has voiced concerns that the international community is not committing enough resources to back the Bridgetown Initiative that seeks to address three triple threats to development of debt, climate and inflation crises.

At the start of a three-day workshop, Building Economic Resilience through South-South Cooperation and Integrated Policy Strategies, at the Accra Beach Hotel, Richard Kozul-Wright, the director of UNCTAD’s Globalisation and Development Strategies Division, said the initiative was needed to address issues related to the cost of capital, particularly affecting developing nations and island economies.

The Bridgetown Initiative, led by Prime Minister Mia Mottley before COP 27, the UN Conference on Climate Change in 2022, advocates for a comprehensive overhaul of the global financial architecture and development finance, focusing on debt, climate and inflation crises.

“Reforming the international financial system is not a small issue,” Kozul-Wright told Barbados TODAY. “The Bridgetown Initiative was important for two reasons. One, it came from the South which was incredibly important [as it] was coming from the developing world and Prime Minister Mottley was a very forceful spokesperson for that. Secondly, [it] had a very clear agenda of dealing with both the problem of the cost of capital because a lot of developing countries and island economies suffer from the fact that borrowing on international markets is not prohibitively expensive, but it’s very expensive. There are initiatives that I think have been picked up with respect not only to ways of reducing the costs but also to dealing with some of the related problems around exchange rate fluctuations that countries in the developing world have.

“You borrow . . . [and] you think you’re making a sensible decision based upon your current exchange rate, and then you find that two years down the line, for a set of reasons that have nothing to do with you, your exchange rate has plummeted significantly, and, the cost of servicing your debt has increased several-fold. There are now ideas about how we can reduce some of those challenges and stresses. If you were expecting a transformation of the system in a few years, that’s not happened, obviously. But if you’re seeing ideas from the initiative that are beginning to resonate, along with the people who will ultimately matter to the big powers, then I think it’s been a success.”

He noted the slow pace of transformation in the international financial system while highlighting the success of the initiative in generating resonating ideas with key global players. Kozul-Wright said the next five years would prove critical in aligning the initiative with commitments to Sustainable Development Goals (SDGs) and the Paris Agreement.