BAKU, Azerbaijan, November 13. Financial system must be more responsive to the needs of vulnerable countries, said UN Secretary-General António Guterres as he addressed the COP29 Leader's Summit of Small Island Developing States on Climate Change in Baku, Trend reports.
Guterres called for urgent reform of the international financial system to address the challenges faced by vulnerable nations. "Your nations have faced a perfect storm of suffocating debt, high-capital costs, rising prices, and COVID-19 – which paralyzed your economies. The result: scant funds for climate action or broader sustainable development," Guterres said, emphasizing the need for transformative change.
The UN chief praised the "Pact for the Future," adopted by consensus in September, which made significant strides toward addressing global financial inequities. "It calls for reform of the international financial architecture, including effective debt relief," Guterres noted. "It commits countries to advancing an SDG Stimulus of $500 billion a year."
"It asks Multilateral Development Banks to look at ways to improve access to concessional finance for developing countries. And to consider structural vulnerability – including through using the Multidimensional Vulnerability Index," he said. He further underlined the importance of enabling vulnerable middle-income countries to access the necessary funds for their development and climate resilience.
As discussions on climate finance took center stage at COP29, Guterres pushed for a new climate finance goal that mobilizes the trillions of dollars needed by developing countries. "We need a new climate finance goal that mobilizes the trillions of dollars of finance developing countries need – with a significant increase in concessional public funds," he said. "That goal must provide clarity on how money will be mobilized."
In his call for action, the UN Secretary-General encouraged the exploration of innovative sources of funding, including levies on aviation, shipping, and fossil fuel extraction. "Tap innovative sources, such as levies on aviation, shipping, and fossil fuel extraction," he urged. Additionally, he called for the creation of a comprehensive framework that ensures accessibility, transparency, and accountability in climate finance. "Include an accessibility, transparency, and accountability framework to build confidence that funds will be delivered and available," Guterres added.
Guterres also stressed the need for substantial reforms in the MDBs to ensure they can better support climate action. "It must also include major capitalization boosts and reforms of the MDBs, including so they can leverage far more private finance at reasonable costs," he concluded.