By Andrea Shalal

WASHINGTON (Reuters] – Major public and private organizations stated in a statement that the global development finance system must undergo urgent reforms. They also need far more private capital. This is needed to tackle multiple crises that have pushed 250 million people back into extreme poverty.

Woochong Um (head of Asian Development Bank), former British Prime Minister Gordon Brown and Dr. Rajiv Shaikh, presidents of Rockefeller Foundation and Andrew Steer, President of Bezos Earth Fund signed the statement. It calls for significant changes in order to assist developing countries with their massive debts and climate change.

They stated that “the standard models aren’t working” in a joint statement after gathering 60 top government officials and experts on development finance in Washington to have a three-hour conversation at the International Monetary Fund (IMF) spring meeting.

We call upon governments and private sector to mobilise the development financing at the speed and scale required to address these complex crises. They stated that this is how the world can achieve Sustainable Development Goals and the Paris Climate Agreement.

On Tuesday, the IMF lowered its global economic growth forecast by almost a whole percentage point. It noted that Russia’s invasion of Ukraine has fueled inflation and threatened to increase inequality between rich and poor over many years.

Statement: The conflict in Ukraine, COVID-19 and escalating debt burdens, fuel and food crises and other extreme weather events have reversed more than 80 years’ worth of growth and global convergence.

They claimed that Russia’s invasion of Ukraine had also caused food insecurity worldwide by increasing the price of soybeans, wheat, and fertilizers.

These were great needs, but they stated that public financing was getting increasingly scarcer and less equitable, and that private financial was more cautious.

Group of Seven and larger Group of 20 advanced economies need to fulfill their commitments of support for South Africa’s energy transition. They should also push Indonesia towards a cooperation in energy transition.

They suggested that major economies use other innovative tools, including the International Finance Facility (IFF), to provide guarantees, and then channel their IMF Special Drawing Rights reserves to developing nations.

Multilateral banks should be able to provide more funding and create facilities for private capital to help developing countries take climate action and address the pandemic. This will allow them to manage their food, fuel, and debt crises.

“If we don’t solve these problems, we are going to have much more instability, and much less faith in the public finance and development system, to the point where it will no longer be credible,” said Eileen O’Connor, a strategic adviser to Shah at the Rockefeller Foundation.