12 November 2020
Today the first Finance in Common Summit (FiC) - which brought together 450 Public Development Banks (PDBs) - concluded with an official declaration. The summit aimed to align PDB activities with the objectives of the Paris Agreement and advance commitments towards delivering global public goods, including universal healthcare. As recognised in the official statement “combined, the volume of funding invested by the community of all PDBs amounts to about USD 2.3 trillion annually”.
Development movements from across the world - The Asian People’s Movement on Debt and Development (APMDD), The African Forum and Network on Debt and Development (AFRODAD), The Latin American Network for Economic and Social Justice (Latindadd), Third World Network (TWN) and The European Network on Debt and Development (Eurodad) - have issued the following joint response:
We are disappointed that the summit falls short of the expectation that it would contribute concrete actions in key areas that would make a substantial contribution to ‘build forward better’ for people and the planet. Despite these concerns, we do welcome some of the language on PDBs’ role in delivering a resilient, inclusive and sustainable recovery post Covid-19, including in advancing gender equality , women’s rights and delivering climate mitigation activities.
These are our main concerns:
First, proposals by PDBs are the same old tried and failed recipes: a firm belief in capital market development and on the institutions’ capacity to leverage private financial flows, which have proved to not deliver in the public interest. No specific references are included on the need to build new ways to ensure accountability.
Second, no commitments have been made to strengthen public health systems or ensure high quality and universal public services by, for instance, ending the facilitation of privatisation. There are also no commitments to address ongoing losses and damages caused by climate change or to outline a timeline to end fossil fuel investment once and for all.
Third, the PDBs gathered at the Summit - and the G20 governments backing them - do not offer a concrete response to the current sovereign debt crisis that limits the capacity of developing countries to deal in an effective way with the multiple crises that they face.
Jason Braganza, Executive Director, AFRODAD said: “Developing countries are in desperate need of debt relief. Without it, the "sound development financing" that is being called for by the FiC is an empty slogan and actually risks worsening developing countries’ debt vulnerabilities. The FiC’s failure to recognise the necessity of substantial debt cancellation and the need for a sovereign debt resolution mechanism is not only a lost opportunity but a turn away from the promise to ‘leave no one behind.’”
Lidy Nacpil, Coordinator, APMDD, said: “Southern movements and peoples’ organizations from around the world delivered a clear and urgent message to public financial institutions gathered at the summit that concrete, immediate steps must be taken to end public financing of fossil fuels. They also called for debt cancellation for developing countries. The FiC Joint Declaration falls very short of these calls. There are no clear indications that there would be a substantive shift from paradigms and dogmas that have aggravated the devastating impacts of the multiple crises - Covid-19, the global economic recession and the climate emergency.”
Patricia Miranda, Global Advocacy Director, Latindadd, said: “Developing countries need urgent access to concessional financing to respond to the multiple crises that they face. PDBs can - and should - play a greater role in providing that financing to avoid the creation of another debt wave through new loans.”
Bhumika Muchhala, Senior Researcher on Global Economic Governance at TWN, said: “PDB financing has to be non-debt creating and must avoid the pitfalls of blended finance mechanisms and public-private partnerships. Decision-making agency in national governments must be ensured. Fossil fuel financing and projects that harm biodiversity and the people who safeguard these resources must be avoided by PDBs. ‘Nature-based solutions,’ which are being used by fossil fuel emitters to offset their emissions and thus to continue emitting, should also be avoided by PDBs.”
Jean Saldanha, Director, Eurodad, said: “The global coalition of PDBs formed at this summit is committed to deliver a work program and accountability framework, building on their Joint Declaration. Words now have to be put into action. At the same time, the mandate, policies and operations of PDBs have to be changed to deliver in the public interest, instead of reproducing a problematic development model. The international community must hold PDBs accountable for the good intentions delivered today.”
Notes to editors:
- Finance in Common Summit Joint Declaration: https://financeincommon.org/sites/default/files/2020-11/FiCS%20-%20Joint%20declaration%20of%20all%20Public%20Development%20Banks.pdf
- FiC Joint CSO Statement “Public Development Banks must deliver on the world we want” https://www.eurodad.org/fic_joint_cso_statement_public_development_banks_must_deliver_on_the_world_we_want
- Statement of Southern Movements and Communities – Finance In Common Summit https://www.apmdd.org/campaigns/statement-of-southern-movements-and-communities-finance-in-common-summit
- Youth activists calling for the Summit to deliver on ending fossil fuel finance: https://www.climatechangenews.com/2020/11/09/young-people-urge-financial-institutions-stop-financing-fossil-fuels/
- OpEd ahead of the Fic by María José Romero (Eurodad) and Thomas Marois (SOAS University of London): “Reclaiming Public Development Banks to Finance a Sustainable & Equitable Recovery Post Covid-19” https://www.eurodad.org/reclaiming_public_development_banks
- Eurodad report: “Shadow report on the limitations of the G20 Debt Service Suspension Initiative: Draining out the Titanic with a bucket?” https://www.eurodad.org/g20_dssi_shadow_report