Tuesday, September 24, 2024
1:30 p.m. EDT
Keynote at CGI2024 Leaders Stage: Innovating in a Time of Crisis
Venue: Trianon Ballroom, New York Hilton Midtown
[Chelsea Clinton]
I really am just so profoundly grateful to Professor Yunus for being with us. As he shared, he’s known my parents for the entirety of my life, and he is certainly someone that has not only inspired me, but clearly a whole generation, and certainly exemplifies that one person very much indeed can change the world. Someone else who certainly exemplifies that is Prime Minister Mia Motley of Barbados.
When she was elected a handful of years ago, it was part of her platform, program, and purpose to completely change the conversation around climate change, to not only make it more radically urgent, but to make it more radically equitable, and to ensure that we collectively were thinking about what we collectively owe to those who are most disproportionately affected by climate change, including people living in low-income countries who’ve done the least to contribute to it. Someone that I am so deeply inspired by, who has been an extraordinary partner to many of us here in the CGI community, someone I’m so thankful will now take the podium. Please welcome, with great enthusiasm, Prime Minister Motley.
[Hon. Mia Amor Mottley, Prime Minister of Barbados]
Thank you. Thank you very much. Thank you, Chelsea, for your introduction.
I told President Clinton that I didn’t want to come after him because he’s still the best, but innovating in a time of crisis. Why are we here? Because we are in crisis, and we’ve had some level of innovations in the last few years. To be fair, the IMF, in terms of monetary financing, would have put in place programs all through its life to be able to stabilize balance of payments.
But for the first time, a few years ago, they established the Resilience and Sustainability Trust, which provided, for the first time, long-term capital at affordable rates for middle-income, vulnerable countries. Since President Banger came to the World Bank, he has not only introduced climate-resilient debt clauses, which, for small states, which is critical for us to be able to afford the reconstruction post-natural disaster, but he’s also announced 50-year loans for climate-related matters so long as they are cross-border, and with a few other conditions that, even though it is not where we fully want to be, is a major start and a major innovation. I refer to those two, along with the innovations that have been taking place with debt for nature and debt for climate swaps, which my own country has been involved in.
Indeed, the debt for nature swap we completed two years ago and repurchased our debt, and with the savings on interest, with the help of the Inter-American Development Bank and Conservancy International, put together the money to fund the Marine Conservation Trust, with 50 to 60 million U.S. dollars expected over a 15-year period, to be able to help us do marine conservation in that Marine Conservation Trust. As we speak, I’m working with the Inter-American Development Bank and the European Investment Bank and the Green Climate Fund for a debt for climate swap, where we’re going to repurchase a larger amount of our debt, and the interest savings will be used and diverted towards financing the reconstruction of a sewage treatment plant so that we can have tertiary-treated water replenish the aquifers. Why? My country is one of the 15 most water-scarce countries in the world, and it therefore means that we have to find all of the possible ways that we can to augment our groundwater.
At the same time, Hurricane Beryl hit us at the beginning of July, not with the ferocious human tragedy that it gave to Karakul and Union Island and Mairo, but in our case, it decimated our fishing industry. Ninety percent of our fishing industry was destroyed, and most of our coastal infrastructure was damaged in some manner or form. I speak to these things because it is important to understand context, and it is important for you to understand that when we talk about innovating finance in a crisis, that this is where the rubber hits the road.
We need longer-term capital in the region, across the world, in small island states especially, if we are going to be able to meet our date with destiny, which is to build resilience. I repeat that for every dollar we spend in building resilience, we save five to seven dollars in damage, not to count also the fact that we may lose lives in those natural disasters and we’ve not found a way to give back life to anybody. So that the urgency with which we speak about the need for greater speed and greater scope is absolutely critical, and we need as many people to keep their voices up in this matter.
The private sector financing has to be scaled up, but we all know the problem that with respect to investment in the Global South, there are multiple reasons why people can find why they may not want to invest, and one of those may relate to foreign exchange issues, currency hedges, some may relate to the fact of lack of available data, and in many instances, there is simply just not a familiarity with the country or the people. We have to overcome these hurdles because the truth is that there is a potential win-win in terms of financing for everyone, but even as we do it, we need to see how best we can scale up domestic resource mobilization to ensure that when investments are made to build adaptation or for mitigation, that the people who stand to be affected in the countries are not left out of it. Can any of them probably invest on their own or even collectively on our own within our countries, on all of the projects that are needed? Probably not, but to exclude our own people’s savings from the investments that have to be made would be to make our own people tenants in their own country, having attained independence, and that is simply not on the cards.
So we need to innovate with respect to how we use public and private funds, and we need to innovate also with respect to understanding that the big, big jump that is needed now is a recognition that without some form of global levies, we are unlikely to bridge the gap. Whether we like it or not, most of the G7 countries are in some kind of fiscal restructuring, turbulence, anxiety, call it what you want. It therefore means that the level of public money is unlikely to be there in the scales that we need.
Yes, we need to leverage the balance sheets better, all of that, but even when we do all of that, there is still a gap, and this is where we need a mental reset, recognizing that if we have the large number of multinational corporations with balance sheets that dwarf the majority of the countries of the world’s balance sheets, then we need to be able to work out how can we get them to play their part so that we can sustain global public goods. Whether it is speaking to oil and gas companies who have helped to contribute to the problem, or whether it is speaking to renewable energy companies where their rates of return may be excessive beyond what might otherwise be normal, and I’m not suggesting that that is the case in every instance, but the principle is that those who contribute to the problem or those who stand to benefit egregiously from the solution, both of you, please put two, three, five cents, one cent on the board out of every dollar. Why? Because that is a form of sustainable funding that is needed at this point in time to guarantee that when countries and companies start to make the clean transition, that there is a pipeline of funding that is secure.
And we’re not limiting this to climate alone, by the way. The world has a number of global challenges, and if we are to sustain a strong global commons, if we are to ensure that small countries do not put at risk the well-being of the planet, then we need to make sure that we are in a position to provide and secure those global commons, both against the issues in the climate crisis, and in particular food and water insecurity, because when all is said and done, you can’t go without food and water for a very long period, so the bureaucracy can’t be keeping you spinning if you want to save lives. Secondly, against the next pandemic, and not just the traditional ones, but also what I call the slow motion silent pandemic, and on Thursday this week, the heads of government of the world and heads of state will meet to be able to come with new declarations on antimicrobial resistance, because it is the third killer, largest killer of people across the earth, simply because our bodies, when infected, cannot and are not receiving the same benefits from antibiotics as they previously did.
Thirdly, I don’t need to tell you about the consequences of war, there’s too much of it across the world, and it’s not just traditional war, but it is the conflict that takes place in the urban and national environment, like here in the Americas, where there is not a military theatre for war, but where there is in fact the level of homicides that are destabilizing the functioning of societies. And then of course there is the problem of the digital divide, and the question as to whether AI will be regulated sufficient such as not to create a threat to human civilization. These five things constitute the core of what a global commons needs to be protected for to ensure that none of these issues can decimate global progress, and more importantly, civilizations within the global community.
If we are serious about innovating financing, then while we have made progress in the areas that I started out at the beginning, it is my view that 80 years on, it is time for a serious global reset, and the World Bank ought to be the place where the global public commons is preserved. And the World Bank ought to be the entity that is capable of collecting levies, CESs, whatever you want from oil and gas companies, from shipping, there’s $7 trillion in value every year in shipping. If you put a 1% CES on that, not to refinance or to cause the owners to turn their ships into green and more sustainable vessels, but for the benefit of adaptation and climate finance in which it is causing us problems with, if we were to put that 1% CES, it would earn us $70 billion minimum a year, and possibly rising based on the increases as we go forward.
That is a sustainable form of financing instead of us arguing, where is the $100 billion that was promised in Denmark? We need to think outside of the box, and we need to create new mechanisms. What is going to be the fundamental issue? That many of these companies operate cross-border, and therefore there will be the issue of capacity to collect. Some may say that if governments collect, they won’t pass over the money.
It may be true. So do we use the international entities like the International Maritime Organization, like IATA and ICAO, like the international entities to help us collect these funds in trust for World Bank to be able to hold? I believe that that is the beginning of the new direction. Do we have it all fleshed out? Not yet.
But do we need to force the issue and to start the research in this direction? Absolutely. Because if we don’t, we’re going to have a declining pipe being forced to cater to ever-expanding challenges and crises across the world. And if we doubted it five years ago, we were not contemplating that war would be at the center of all that we are dealing with.
And the distractions of war and populism and elections, regrettably, may seem an acceptable excuse for those who want to use it, but it didn’t stop the world from hitting the hottest day ever on July 22nd. We are in the midst of multiple crises, and the last time I checked, human beings throughout history have had the capacity and the ingenuity to make major changes. Nobody believed that slavery would be abolished until it happened.
Nobody believed that women would have the right to vote until it happened. Nobody believed that apartheid would go until it happened. And as Chelsea reminded me, even when we were trying to deal with acid rain and hydrochlorobenz, it was dealt with under President Reagan, with the Montreal Agreement, and others.
And look where we are in terms of success on those fronts today. We need to do what Nike taught us. Just do it.