Sunday, September 22, 2024
1:45 p.m. EDT
Homi Kharas, Sr. Fellow, Brookings Center for Sustainable Development
Venue: SDG Lounge (Dag Hammarskjold Library, Woodrow Wilson Reading Room), UNHQ, New York
Transcript:
Hon. Mia Amor Mottley, SC, MP:
Thank you.
Homi Kharas:
So another strong, vital voice in this conversation and a voice from developing countries of developing countries reflecting the needs and aspirations of developing countries. My guest, Prime Minister Mia Motley, needs no introduction here. And she has been instrumental in bringing to the discussion a somewhat more practical, detailed, and almost what I would call pragmatic set of issues under the general title of the Bridgetown Agenda.
We’ve gone through several versions. We’re approaching Bridgetown 3.0. So my first question, Prime Minister, is you put out a discussion draft some time ago. When are we actually going to see Bridgetown 3.0?
Hon. Mia Amor Mottley, SC, MP:
This week. We’re going to release it this week. And we would have launched it for consultation at the Small Island Development States Conference in Antigua.
And we wanted to be able to get feedback. We’ve done that. And we felt that this was as good a week to be able to distribute it now to others, particularly on the eve of the annual meetings.
Without prejudice to that, we’ve been doing a lot of work to try to bring pressure to bear on those who can help change, for example, the surcharges at the IMF and other aspects of what we’re facing. And the beautiful thing about Bridgetown is that we have used the document to be able to foment change. And as we see the change, we make the adjustments and move forward.
Now, have we gotten the majority of what we asked for? Not yet. But we have seen significant change.
The Resilience and Sustainability Trust on the IMF, the debt clauses, as we call them, natural disaster clauses, being used by the World Bank, we’d like to see them embraced by the private sector. Because it’s not only governments that will be challenged post-disaster, but a lot of private enterprises. And therefore, what happens to that private debt with those private sector enterprises is critical.
The issue of insurance, we want to be able to see. And we’ve started the conversation. And we see that the markets have, for example, stopped taking coverage of risk in California for fire, and in the Eastern Seaboard, and Northern Caribbean in particular, for hurricanes and floods.
And for those where you still have access to it, the premier have just shot through the roof. We have seen some changes. But Bridgetown’s three points here is fundamentally about changing the rules of the game.
That’s what we’ve been speaking about here in the PAC for the future. And that’s what I just finished speaking on. Two, shockproofing vulnerable economies.
And even though we’ve been talking about it, we still do the lazy thing of using historic per capita GDP, which excludes countries like my own, at the very time that we continue to face problems like Hurricane Beryl. And the new phenomenon of convection rain every afternoon. We’re flooding last week.
Two years ago was when we started to see this convection rain consistently. And we also saw, for the first six months of the year last year, less than a rainfall that was less than 50% less than the average, the 30-year average for rainfall. So that’s why I talk about the season of superlatives, because we’re lurching from one end to the other extreme, all within the same year.
And of course, that has implications for agriculture, it has implications for infrastructure, it has implications for people’s living. And these things are not going to await the slow, deliberate consultation of bureaucracy until we get there. Because in the meantime, lives are being lost and livelihoods are being compromised.
So I hope that that shock proofing we can deal with. And then the third aspect of Bridgetown is continuing to make the case for a serious increase in the amount of money available for SDGs and climate. But equally, for a change in the terms and the approach, we cannot continue using short-term money to fuel development.
And that is why the SDGs are only 17% on track. Now, if we keep doing the same thing the same way, then don’t expect different. Einstein told us, it’s the definition of madness.
Homi Kharas:
So you said, partly, you’re going to release this on the just before the World Bank IMF…
Hon. Mia Amor Mottley, SC, MP:
We’ll do it this week.
Homi Kharas:
What do you hope that will come out of those meetings that will advance the agenda? In this, do you want to give us some little bit of…
Hon. Mia Amor Mottley, SC, MP:
I know that the board and entities have been having a lot of conversations on the surcharges. I think we’ll see some progress on that. Not all that we would have liked to have seen.
I think that there is still too conservative an approach. And I don’t like using that word. But the truth is that if the fund has a precautionary balance of 27 billion, and earning at 3 billion a year, then why do you want to see those numbers on paper, while people are suffering in real time?
Makes no sense. At the very time when the world is at war in Europe, in Middle East, in Africa, we’re not talking about Sudan. We’re not talking about the consequences of famine there.
We’re not talking about the consequences of the lack of citizen security in the Americas, even in the absence of war, because of the ready access to assault weapons. We’re not talking about the absence of access to serious concessional funding. And we’re not talking about the access to grant funding, which is still critical, because in many instances, the debt to GDP ratios are too high to be able to facilitate any serious movement on the part of almost 80 countries in the world.
These countries are at the edge of a debt crisis, and you know it better than I do. But we also recognize that the things that we are calling for are utilized, it’s just not utilized across the board in a fair and transparent manner. So when you said, when we said to the world, no quantitative easing, but then the G7 countries proceeded with quantitative easing that was supercharged during COVID, we have a problem of trust thereafter.
When we say no subsidies for electricity, but yet the G7 countries in 2022 gave themselves $227 billion in electricity subsidies, while at the same time in all structural adjustment programs or IFA programs, you’re telling countries to remove subsidies for electricity because they’re unfair. We have a problem of trust. When we say that you are not going to permit debt to GDP ratios above a certain level, but then you do it for others.
So we have some serious problems of trust, and regrettably, what fuels political instability, and what fuels social instability is the absence of trust. And that is why I say that in all of these things, Bridgetown is fundamentally rooted, not far from where we were this morning when I talked about the need for the principles of Ubuntu, the principles of that common agenda, that common destiny that the SG keeps talking about. But we get in here, we speak wonderfully well about it, but then the ministers of finance, ministers of economy forget that it has been spoken about, and don’t give the remit at the level of the international financial institutions for the changes in governance.
And I think you shared with me an example, for example, in Bhutan, where they have been ring-fenced an element of the debt, largely because of the specific nature there, but we’ve been saying ring-fence the climate-related and pandemic debt. If you do that, then I’m still left with the ability to raise longer-term money, to build hospitals, to build schools, to do the critical things to keep people’s lives better, and to give people opportunity to build a platform for prosperity, ultimately.
Homi Kharas:
So, very quickly, you’ve, you know, in this program, you have measures where you talk about how important it is to have a greater degree of liquidity and immediate access in the face of a shock. You’ve talked about the need to make some progress, like you just said, on the ring-fencing of certain types of investments and changes in the debt sustainability approach. You’ve talked, and the Prime Minister of Jamaica also talked about the private sector and insurance, and what can be done now there.
So, in each of those three areas, where do you think we’re making progress, and where do you think we’re just stuck?
Hon. Mia Amor Mottley, SC, MP:
I think that we are hearing some of the right songs on debt sustainability, and even the example that you gave me recently with Bhutan, shows that possibility of progress is there. But we haven’t closed the deal. And, you know, there’s many a slip between cup and lip.
And the British subway system would tell us, well, mind the gap. The reality is that even though we’re seeing those elements of progress, we’ve seen it on climate disaster clauses, but we need to see it available to private sector entities who will be affected as much as a government if a hurricane hits. With respect to the governance structures, we’ve seen Kristalina admit that there’s a need for Africa to have a greater presence.
And if we take Ambassador Thomas Greenfield’s statements with respect to the Security Council, it gives us also the precedent that we need not only to look at Africa, but small island states, which constitute one quarter of the world’s countries, also needs a place not just on the Security Council, but also on the board of these IFIs. Why? Because if you don’t know the road that I walk, then you may well make decisions that will negatively impact me innocently, but they’re still impacting me nevertheless.
And therefore, if I’m at the table, sharing my perspective and saying, look, you may think this is all right for most middle-income countries and most middle-level country, but this is the impact for a country where there is no, there is smallness and there’s no other opportunities. You know, when they tell you in California or in Florida, go and get insurance elsewhere. You can’t get a mortgage because you can’t get insurance for yourself and the property.
You can go to another state. When they tell us in Barbados you can’t get insurance, where are we going to go? Who’s going to give me support?
And then the next thing I’m going to hear is that I’m a migrant. And then the next thing I’m going to hear is that I’m not going there. I’m not doing the things that I should do.
I’m not going there. Cats and dogs are not going to get me to do it. Even if it’s raining.
Homi Kharas:
The sun is shining and that’s why I have yellow on for a hopeful future. Let’s close. And perhaps I can ask you the same question as I asked the Prime Minister of Jamaica, summit of the future.
What’s your hope? What’s your one message that you really want to get across?
Hon. Mia Amor Mottley, SC, MP:
That we need to have a reset. We have to have a reset of the world through a reset in our attitude. If we only want to pursue what is good for us individually, we will not make the changes necessary.
But I’m satisfied that since we have no other planet to live on, and since ultimately the world has known what it is, humanity has known what it is, to make difficult decisions, to bring wars to an end, to end slavery, to end apartheid, I believe that this generation is equal to the task. And what we are simply seeing is the growing pains and the tensions, before we reach the level of consensus necessary to take the difficult decisions. And it is up to the rest of us to recognize that even though success is possible and win-win is possible, there are also examples where the world took the wrong decision and went the wrong way.
And we have seen failed civilizations and we have seen also a planet compromised in a serious way. So we are at that point, but I am hopeful. As I said, I’ve worn yellow to express that hope for the future.
I genuinely believe that human beings and the population across the world want a signal from the leaders of the world here at the UN this week, that we can win this battle to save people and planet. But it does require a different mindset that has governed the world in the last five centuries. And that mindset that believed in the preservation of power for a very, very small few, cannot be what is necessary.
We need more people in the battle to save people and planet. And the most more people will only come if there’s trust, and trust will not be there if we keep the old systems of governance.
Homi Kharas:
Prime Minister, thank you so much for being such an inspiring voice. I hope you noticed that I wore pink to signify a new dawn in the relationship.
Hon. Mia Amor Mottley, SC, MP:
Homi is very modest. I keep making the point, Bridgetown 3.0 is not Barbados alone. We have used Barbados as the basis for propelling and corralling these positions.
And people like Homi and many others have contributed to us being able to be in this position. And we thank you for your continued conscience and support. Because as His Holiness has said, the greatest crime now is the desensitization that’s taken place, where we see suffering and we do nothing about it, where we see murder and we do nothing about it.
You have shown that you’re prepared to step up to the plate always. Thank you. Thank you.
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