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Today, world leaders will convene in London for the highly anticipated G20 summit. Without a doubt, the current global economic crisis has transformed the geopolitical landscape and is heralding profound shifts in the international distribution of power.
The debilitating ramifications of the crisis are not geographically localized, and therefore, any solution requires a global response that includes not only the most developed nations, but also the emerging market economies of the world. In this respect, Latin America is an integral part of the equation. At today's opening, Brazil, Argentina, and Mexico will represent the region's interests, as President Obama initiates his study of Latin American realities. Although not dubbed as such, the area nations could play a pivotal role in London and the gathering could be looked back upon as an economic summit dominated by the developing world, with Latin America being an important constituent.
As a result of its precarious financial situation as well as its fractious political atmosphere, Argentina's influence at the summit will be limited in comparison to Brazil and Mexico. Buenos Aires' immediate concern is that it is strapped for cash and unable to tap traditional lines of credit following the dreadful economic crisis of 2001 and its subsequent debt default. Consequently, Argentina is more apt to continue petitioning for greater flexibility on the terms of loans granted by the IMF to recipient countries. Furthermore, Argentine President Cristina Fernandez de Kirchner recently met with Brazilian President Luiz Inacio Lula da Silva to coordinate their positions. In conjunction with Brazil, Argentina is likely to denounce protectionist measures and greater restrictions on trade with developed countries. However, given the country's lackluster track record in recent years -- Argentina has twice raised tariffs on imported goods from neighboring countries in the past six months -- it is unlikely that such recommendations will gain much traction coming from Fernandez alone. It was thus a wise decision to collaborate with Brazil prior to the summit.
The G20 summit is yet another opportunity for President Lula to enhance his country's position as an up-and-coming global leader. Julia Sweig, a highly regarded political analyst at the Council on Foreign Relations, captured the great irony of how the economic crisis relates to the circumstances in Brazil, when she noted, "the crisis paradoxically, while hurting [the country] domestically, may well enhance Brazil's standing as a leader in and voice for the emerging world." This, in fact, is precisely Lula's intention as he heads to London. Over the course of his presidency, he has vociferously argued for his country, as well as other developing nations to have a more equitable role in multilateral international organizations. Lula will assuredly continue to press for greater voting rights in the IMF and join his Latin American counterparts in calling for the recapitalization of the fund.
Furthermore, the Brazilian president will join Mexican President Felipe Calderon in pushing for increased trade financing and export credits to bolster the precipitously declining figures for world trade. Lula has advocated that the world's largest economies, including Brazil, should contribute up to $100 billion to boost global trade through financing and export credits that has all but evaporated over the past year, especially for less credit worthy borrowers from Latin America and the Caribbean. Averting protectionist measures from developed countries will also be a major concern for Brazil. In an interview with CNN over last weekend, Lula dubbed anti-trade measures a "drug" threatening to poison the system and strangle any hope of an economic recovery in the near future.
Mexico will join Brazil in its denunciation of protectionism, as it has been on the receiving end of such measures from the United States. In an interview with The Financial Times, Calderon castigated the Obama administration for its decision to restrict Mexican trucks from using U.S. highways. He declared it a blatant violation of the 1994 NAFTA agreement, and thus a breach of international law. Mexico responded to these measures by imposing countervailing duties ranging up to 10 percent on 90 U.S. products entering the country. As the malevolent violence of the drug conflict begins to spread north over the border, the U.S. and Mexico are in no position to be engaging in what some would call factitious trade disputes. The danger is that such commercial quarrels will quickly turn into political debates, deteriorating the goodwill between the two nations and preventing collaboration on more germane matters like national security.
Similar to Brazil, Mexico will also be concerned with greater global financial regulation and increased funding for the IMF. Both countries are reportedly dickering with the IMF, and earlier this week, Calderon stated that Mexico would be ready to accept between the odd $30 and $40 billion from the IMF's new flexible credit line to fund infrastructure projects in the country. This new credit line was set up earlier this month to replace the short-term liquidity facility that failed to attract any borrowers due to its rigid repayment schedules. Recipients can now use the modified fund as a type of collateral and draw upon the cash only if their economic conditions further decline. The fund targets functioning emerging market economies for its generosity, precisely like that of Mexico, that have maintained sound fiscal policies during the boom years but have since found themselves particularly vulnerable after the downturn. Calderon's recent insistence that Mexico, along with other major developing countries, must assume a responsibility to limit their own carbon emissions will not be lost upon the world's rich nations.
Latin America Pushes for a Common Agenda for Developing Countries
In the weeks leading up to the summit, the developed world has addressed the crisis in a particularly jagged manner-- Europe has called for tighter global financial regulation, while the U.S. has pushed for increased spending. Latin America, on the other hand, has sought to forge a consensus with its counterparts in the developing world in an effort to form a united front. On Tuesday, leaders from the 22-member Arab League and the 12 South American nations gathered in Doha, Qatar for their second summit. It is not a coincidence that the leaders decided to convene in Qatar. It lays at the center of the latest Word Trade Organization (WTO) negotiations, in which the European Union and the U.S. have joined forces in a ferocious debate with developing countries over the level of agricultural tariffs in the developing world. Brazil was one of the leaders of the opposing fronts and has been pushing for the resumption and completion of the talks, which Lula will likely argue at the G20 summit. The location of the gathering sends a message to the developed world that the emerging market economies will be unified in their position against protectionism. While the G20 is indeed an important summit, any agreements brokered concerning trade will most likely be mainly political in nature and do not carry the force of law. Completing the Doha rounds would institutionalize through international law anti-protectionist measures.
To further convey this sentiment, the Arab and South American nations made strong commitments to push for reforms to the system of international organizations now in effect and increase trade between the two blocs, which has tripled to $18 billion since their initial commercial bilateral exchanges inception in 2005. In this respect, Latin America has taken audacious steps to protect itself from anti-trade restriction by diversifying its trading partners. Brazil's Lula stridently noted that, "the wealth of the Arab world is now becoming an important factor in development...and you have to protect it." With the World Bank estimating a steep decline in world trade of up to 6.1 percent, and the WTO predicting the figure to be as high as 9 percent, diversification in terms of links with non-traditional trade partners is beyond dispute. Only this tack can be counted on to limit the severity of the present economic blows now being visited upon the developing world.
The Outlook for Deterring Protectionism
Despite these poignant commitments to combat anti-trade restriction, it is unlikely that Argentina, Brazil, and Mexico and their Latin American neighbors will be able to secure much more than empty promises from the developed world despite the fact that they most likely will be demanding much more. At a time when unemployment is on the rise, wages are stagnant, and the strong contraction in growth is strangling the markets, there are intense domestic pressures pushing protectionist measures in the U.S. and E.U, even though the experience during the Great Depression suggests that such tactics will only exacerbate already straitened conditions. At the same time, there will be those who will presumably argue that some form of protectionism is called for due to the economic discrepancies recorded among rich and poor nations.
To rectify the problems confronting global trade, the leaders at the G20 summit will be faced with the conflict that has troubled statesmen for the centuries: the incommensurability between a nation's domestic and its international experience and obligations. Ultimately, a nation will judge a policy based on its domestic relevance as well as its legitimacy. By this standard, many American citizens and their European peers have been more concerned with protecting jobs at home, as well as their agriculture and manufacturing sectors, at the expense of trade relations abroad. Thus far, however, the decline in trade is largely the result of falling demand and limited financing and credits rather than protectionist measures. In an effort to increase trade financing and offset further declines, Brazil, Argentina, and Mexico have supported proposals by Gordon Brown to secure a $100 billion fund and another from World Bank President, Robert Zoellick for $50 billion. This fund would be largely reserved for the poorer nations in which the governments of the world's largest economies would provide most of the financing and assume most of the risk. Orchestrating an agreement at the G20 to introduce these liquid funds into the system would send a positive message in support of world trade.
Lending a Helping Hand
One of the most prudent issues needing to be addressed at the G20 and of major concern for Latin American and Caribbean nations is the recapitalization of the world's international lending facilities. Of these, the most relevant during these times of financial upheaval, is the IMF, which traditionally has assumed the role of lender of last resort. At a time when credit has only been available to the highest quality borrowers and even then it is very expensive and in relatively short supply because of the high interest payments demanded by investors. These multilateral institutions have become an important source of funds for emerging market economies. As the crisis continues to spread, the World Bank has identified a $700 billion financing gap for countries of the developing world.
Moreover, the forecasts for a sharp contraction in growth make these lending institutions more important now than ever. The World Bank has estimated a zero percent growth rate for Latin America in 2009. Additionally, the once booming capital flows that poured into the region are down 57 percent in 2009 from a year ago, to a dwindling figure of $34 billion. This will significantly hurt large parts of the region, especially the small countries of the Caribbean that lack the foreign currency reserves of countries like Chile and Brazil to spend their way out of the crisis. Accordingly, these malignant economic conditions are now taking a human toll.
In a poignant speech expressing the dire necessity to institutionalize support for the poorer countries of the world, Zoellick, using a rhetoric that was not his style during his USTR days, professed that, "in London, Washington and Paris people talk of bonuses or no bonuses. In parts of Africa, South Asia, and Latin America, the struggle is for food or no food." He predicted that an additional 53 million people will be pushed into poverty this year as a result of the crisis. This figure is heaped on top of the 155 million people who were forced to live below the poverty line last year as a result of sharp spikes in the price of food and fuel. For their part, and out of a diversity of motivations, Argentina, Brazil, and Mexico have all pledged to be a voice for the world's most vulnerable nations.
For these reasons, recapitalizing the IMF and regional lending facilities such as the Inter-American Development Bank (IADB) has become a central concern for the cadre of developing county leaders of the G20. The aforementioned restructuring of the IMF flexible credit line has been a step in the right direction. To supplement these efforts, COHA would agree that the G20 should conform to the demands of the IMF to increase its funds from $250 billion to $500 billion. Also, China, Saudi Arabia and Brazil are being called upon to make greater contributions. In return for this much needed liquidity, however, they should be given a greater voice in this international forum. With the IMF voting rights set for renegotiation in January 2011, the summit seems like an opportune time to introduce the subject. President Michelle Bachelet of Chile recently expressed such a perspective when she stated, "we must call on the IMF for more democratic governing and to give more funds to the developing banks to be more effective in the countries [that need the funds] the most." As the crisis continues to wreak havoc across the globe, it is becoming increasingly clear that the developing world must be further integrated into the existing system.
Aside from the IMF, the IADB is making a move to present itself as an important regional lending facility for Latin America and the Caribbean. In 2008, the IADB made 131 loans totaling $11.2 billion, which is a far jump from the 89 loans worth $7.7 billion allocated in 2007. Assuredly, the IADB is scheduled to become a major part of the solution for the developing countries of the Western Hemisphere. The bank, however, has not escaped the crisis unscathed. It has posted an estimated loss of $1.6 billion for the 2008 fiscal year.
As a result, IADB executives and member countries petitioned earlier this week to raise the bank's capital from $101 billion to $280 billion. Increased loan requests for the 2009 fiscal year could be as high as $120 billion, up from last year's requests of $7 billion, making fresh capital a necessity if the bank's lending facilities are to meet new aggregate demand. To this end, the United States, the bank's largest shareholder, has been cooperative. Treasury Secretary, Timothy Geithner, told the IADB that the U.S. was prepared to start a review of permanent IADB capital increases after the existing resources are exhausted. China and Brazil also have indicated that they are prepared to contribute to this fund. Sustaining the IADB's liquidity is crucial to the economic health of the Latin American and Caribbean region during what deserves to be seen as a uniquely perilous time.
Moving Closer to a Multi-Polar World Order
Hopes are high for the outcome of the G20 summit, but it may turn out to be just another parading of world leaders forging empty promises and failing to deliver on their sputtering pledges. Nevertheless, the marked differences in the exchanges between representatives of the developed and developing world cannot be underscored. A decade ago, it would have been unheard of that Britain would be taking economic council from Chile. In a recent summit with U.K. Prime Minister Gordon Brown, Bachelet condemned Britain's frivolous economic behavior during the boom years. She cited that while Britain was out spending and overly leveraging itself, Chile saved revenue from exports, allowing it to implement a stimulus amounting to 2.8 percent of the country's GDP. Britain, on the other hand, was unable to afford such a comparable package.
It is truly a testament to these new times when Latin America, a region notorious for economic crisis, is giving the U.S. and Europe veritable schoolroom lectures on sound public finances. When the current crisis subsides, it could very well be that a new world system will emerge. The reverberations of the downturn may turn out to have leveled the playing field and now the Latin American representatives of the G20 will be coming to the negotiating table with an exceedingly stronger voice.
This analysis was prepared by COHA Research Associate Lilly Briger
Founded in 1975, the Council on Hemispheric Affairs (COHA), a nonprofit, tax-exempt independent research and information organization, was established to promote the common interests of the hemisphere, raise the visibility of regional affairs and increase the importance of the inter-American relationship, as well as encourage the formulation of rational and constructive U.S. policies towards Latin America.
"Free advice for the speaker of the House: if you want to cut spending so bad, start and end with the Pentagon budget," said one watchdog group.
With the U.S. just 10 days away from a possible default, House Republicans are now demanding a military budget even larger than the record $858 billion that Congress authorized for the current fiscal year as they continue pushing for steep cuts to key aid programs.
The GOP demand was reported over the weekend after Republican negotiators rejected a White House offer to "freeze" both military and non-military spending—an idea that congressional Republicans previously appeared open to—in exchange for a debt ceiling increase, causing talks to break down. The powerful defense industry, which donates heavily to Democrats and Republicans, howled in protest earlier this year at the prospect of military spending cuts.
Republicans are also, according toPolitico, "demanding work requirements for SNAP recipients that are more rigid than those they originally proposed" and "insisting on adding new immigration provisions from the GOP's recently passed border bill" while dismissing White House proposals to cut prescription drug spending and close tax loopholes exploited by the rich.
"Republicans in D.C. are pushing for a massive increase in the $858 billion Pentagon budget, a $1.8 trillion tax break to people who inherit over $1 billion, and a $3.5 trillion extension of Trump's tax breaks," Sen. Bernie Sanders (I-Vt.), who is urging President Joe Biden to act unilaterally to end the debt ceiling standoff, wrote over the weekend. "Oh, did they tell you how very, very concerned they are about the deficit?"
Higher military spending would mean that, in order for Republicans to achieve their stated spending-reduction goals, non-military spending would have to be slashed even more aggressively. The Center on Budget and Policy Priorities has estimated that cuts to other federal programs—from housing to childcare to medical research—"would be enormous" if military spending and veterans' healthcare were spared: "33% in 2024 rising to an eye-popping 59% cut in 2033."
The fresh GOP push for an even more bloated Pentagon budget came as a new "60 Minutes" investigation examined how private military contractors—a major lobbying force in Washington with nearly 800 registered influence-peddlers—price gouge the Defense Department with impunity, fueling the agency's annual spending growth.
"The gouging that takes place is unconscionable. It's unconscionable," Shay Assad, a former top contract negotiator at the Pentagon who previously worked at Raytheon—making him a so-called "reverse revolver"—told the program.
"No matter who they are, no matter what company it is, they need to be held accountable. And right now that accountability system is broken in the Department of Defense," said Assad. "If you're happy with companies gouging you and just looking you right in the eye and say, 'I'm gonna keep gouging you because I know you don't have the guts to do anything about it,' then I guess we should just keep doing what we're doing."
\u201c\u201cThe gouging that takes place is unconscionable. It's unconscionable.\u201d \n\nShay Assad, a former Defense Department contract negotiator, said the Pentagon overpays for almost everything \u2013 from missiles and planes to spare parts.\u201d— 60 Minutes (@60 Minutes) 1684710554
"This is what Rep. Barbara Lee and I have been talking about," Rep. Mark Pocan (D-Wis.), co-chair of the Defense Spending Reduction Caucus, tweeted in response to the "60 Minutes" probe. "We need to #AuditThePentagon."
A Pentagon-backed study released last month found, unsurprisingly, that "publicly traded U.S.-based corporations in the defense industrial base are, in aggregate, financially healthy."
"They are profitable," the study continued. "They generate substantial amounts of cash beyond their needs for operations or capital investment; the bulk is returned to shareholders so they can invest it elsewhere. They generate total returns to shareholders well in excess of what one might expect given their relative low risk to investors. Bankruptcies or other signs of financial distress are exceptionally rare. Strong financial performance was maintained even during periods of market turmoil."
Stephen Semler, co-founder of the Security Policy Reform Institute, has estimated that more than half of all Pentagon spending between fiscal years 2002 and 2021 went to private contractors that provide the government with military equipment.
"Free advice for the speaker of the House: if you want to cut spending so bad, start and end with the Pentagon budget," the progressive advocacy group Public Citizensaid on Saturday. "Don't touch SNAP or Social Security or Medicare and Medicaid."
"MAGA House Republicans are threatening a default that could cost us millions of jobs and trigger a recession," said the president. "All because they are demanding deep cuts that will hurt hardworking families—even while they protect tax breaks for the wealthy and corporations."
Before a meeting with U.S. House Speaker Kevin McCarthy planned for Monday, President Joe Biden on Sunday renewed his criticism of what GOP lawmakers are demanding in exchange for raising the debt ceiling to prevent an economically catastrophic default.
"I've done my part," Biden told reporters—pointing to his trillions of dollars in proposed spending cuts and new sources of revenue—before heading back to Washington, D.C. from Hiroshima, Japan, where he attended a three-day Group of Seven summit.
"Now it's time for the other side to move... from their extreme positions, because much of what they've already proposed is simply, quite frankly, unacceptable," Biden said of McCarthy (R-Calif.) and the other House Republicans holding the economy hostage.
\u201cMAGA House Republicans are threatening a default that could cost us millions of jobs and trigger a recession.\n\u00a0\nAll because they are demanding deep cuts that will hurt hardworking families \u2013 even while they protect tax breaks for the wealthy and corporations.\n\nI\u2019ve got a plan to\u2026\u201d— President Biden (@President Biden) 1684685203
The president continued:
Let me be clear: I'm not going to agree to a deal that protects, for example, a $30 billion tax break for the oil industry, which made $200 billion last year—they don't need an incentive of another $30 billion—while putting healthcare of 21 million Americans at risk by going after Medicaid.
I’m not going to agree to a deal that protects $200 billion in excess payments for pharmaceutical industries and refusing to count that while cutting over 100,000 schoolteachers and assistants' jobs, 30,000 law enforcement officers' jobs cut across the entire United States of America.
And I'm not going to agree to a deal that protects wealthy tax cheats and crypto traders while putting food assistance at risk for... nearly 1 million Americans.
"It's time for Republicans to accept that there is no bipartisan deal to be made solely... on their partisan terms," Biden added, while also declaring that "America has never defaulted... on our debt, and it never will."
However, Treasury Secretary Janet Yellen has warned that if Congress doesn't raise the debt limit soon, the federal government could run out of money to pay its bills by June 1. Growing fears of a default have prompted some legal scholars and progressive lawmakers to pressure Biden to stop negotiating with GOP hostage-takers and invoke the 14th Amendment to the U.S. Constitution, which says in part that "the validity of the public debt... shall not be questioned."
Among them is Sen. Bernie Sanders (I-Vt.), who wrote in a Sunday email to supporters: "In a manner that is unprecedented and incredibly reckless and cruel, these Republicans have hijacked the debt ceiling process. Their position: If the Congress does not agree to impose savage cuts on the needs of working people, the elderly, the children, the sick, and the poor, they will push the U.S. government to default on its debt. In other words, they are prepared to wreck our economy if they don't get their way."
"In my view, President Biden has the authority and the responsibility under the 14th Amendment of the Constitution to make sure that we continue to pay our bills. The language in that amendment is quite clear," Sanders said, urging anyone who agrees to sign a petition "calling on President Biden to exercise that authority in order to protect the country from the savage Republican budget."
In response to a reporter's question Sunday, Biden said that "I'm looking at the 14th Amendment, as to whether or not we have the authority. I think we have the authority. The question is: Could it be done and invoked in time that it... would not be appealed and, as a consequence, pass the date in question, and still default on the debt? That's a question that I think is unresolved."
The American Prospect executive editor David Dayen suggested in a pair of tweets that rather than inquiring if Biden will invoke the 14th Amendment, journalists should be asking how he plans to respond to an existing lawsuit that involves it.
\u201cA good question from the Gang of 500, instead of "will you invoke the 14th amendment" (which is not how it works) is "you've been served, how will you respond?"\u201d— David Dayen (@David Dayen) 1684678216
Earlier this month, lawyers for the National Association of Government Employees (NAGE)—which represents roughly 75,000 workers across federal agenices—filed a suit against Biden and Yellen in the U.S. District Court for the District of Massachusetts.
NAGE, which has endorsed Biden for reelection in 2024, aims to have the debt ceiling law declared unconstitutional, and on Friday—after Dayen publicly pointed out lack of progress with the case—the union's legal team requested emergency action by the court.
Meanwhile, Politicoreported Friday that some Biden aides fear invoking the 14th Amendment "would trigger a pitched legal battle, undermine global faith in U.S. creditworthiness, and damage the economy," and "officials have warned that even the appearance of more seriously considering the 14th Amendment could blow up talks that are already quite delicate."
After departing Japan on Sunday, Biden spoke with McCarthy by phone from Air Force One. Following the call, the GOP speaker confirmed plans to meet with the president on Monday but also said that "my position has not changed."
Sanders, in his email Sunday, wrote that "Republicans' willingness to hold the world's economy hostage to their draconian and cruel demands, and their refusal to consider one penny in new revenue from the wealthy and large corporations, has made it seemingly impossible to enact a bipartisan budget deal at this time."
"The debt ceiling is about paying money that has already been appropriated and spent. It has nothing to do with future budgets and future spending," he stressed. "And throughout the history of our country, the U.S. government has always done what it is supposed to do—we pay our debts."
"We can return to the path of progress. We can realize our ambitions for health and well-being for all," said António Guterres. "But only if the world works together... despite the tensions straining relations between nations."
"Progress is in peril."
That was United Nations Secretary-General António Guterres' warning Sunday to the 76th World Health Assembly.
Over seven decades ago, he noted, "countries came together and affirmed some fundamental truths: that peace depends on health; that disease in one nation endangers all; and that achieving the greatest possible health for everyone, everywhere relies on cooperation."
Since the creation of the World Health Organization (WHO), Guterres continued, "human health has advanced dramatically: global life expectancy—up over 50%; infant mortality—down 60% in 30 years; smallpox—eradicated; and polio on the verge of extinction."
But now, "war and conflict threaten millions. The health of billions is endangered by the climate crisis. And the Covid-19 pandemic has stalled, and even reversed, progress in public health," the U.N. leader said in a video address kicking off the assembly.
"We can return to the path of progress. We can realize our ambitions for health and well-being for all. But only if the world works together. If we cooperate, despite the tensions straining relations between nations," he stressed.
\u201cSmallpox \u2013 eradicated.\n\nPolio - on the verge of extinction.\n\nInfant mortality \u2013 down 60% in 30 years.\n\nHuman health has advanced dramatically since the birth of the @WHO, but now progress is in peril.\n\nWe can return to the path of progress but only if the world works together.\u201d— Ant\u00f3nio Guterres (@Ant\u00f3nio Guterres) 1684699200
Guterres called for "strengthening the independence, authority, and financing of the World Health Organization," and said that "it is vital to prepare for the health threats to come—from new pandemics to climate dangers—so that we prevent where we can, and respond fast and effectively where we cannot."
WHO Director-General Tedros Adhanom Ghebreyesus—who earlier this month declared Covid-19 over as a global health emergency—similarly urged international coordination during his welcome speech to the assembly. The agency leader said that "in 2020, I described Covid-19 as a long, dark tunnel. We have now come out the end of that tunnel."
"To be clear, Covid-19 is still with us, it still kills, it's still changing, and it still demands our attention," Tedros continued. The end of the emergency "is not just the end of a bad dream from which we have woken. We cannot simply carry on as we did before."
"This is a moment to look behind us and remember the darkness of the tunnel, and then to look forward, and to move forward in the light of the many painful lessons it has taught us. Chief among those lessons is that we can only face shared threats with a shared response," Tedros added. He stressed that the pandemic accord now being negotiated "must be a historic agreement to make a paradigm shift in global health security, recognizing that our fates are interwoven."
\u201cLIVE: Opening of the 76th World Health Assembly with @DrTedros. #WHA76 https://t.co/RwqX5YGr98\u201d— World Health Organization (WHO) (@World Health Organization (WHO)) 1684673003
As the assembly—scheduled through May 30—got underway in Geneva, Switzerland, Guterres was in Hiroshima, Japan, for the Group of Seven (G7) summit, where he also underscored the importance of global cooperation while speaking to the press on Sunday.
"My message to G7 leaders is clear: While the economic picture is uncertain everywhere, rich countries cannot ignore the fact that more than half the world—the vast majority of countries—are suffering through a deep financial crisis," Guterres said. "The crushing economic impact of the Covid-19 pandemic, the climate crisis, Russia's invasion of Ukraine, unsustainable levels of debt, rising interest rates, and inflation are devastating developing and emerging economies."
"There is a systemic and unjust bias in global economic and financial frameworks in favor of rich countries," he declared, highlighting that "access to Covid-19 vaccines was deeply unfair" and "the recovery has been extremely unbalanced."
While the U.N. chief argued that "it's time to reform both the Security Council and the Bretton Woods institutions," referring to the International Monetary Fund and World Bank, he also said that "even within the present unfair global rules, more can and must be done to support developing economies."
G7 countries are "central to climate action," Guterres said, noting the need for "faster timelines to phase out fossil fuels and ramp up renewables," an end to dirty energy subsidies, and financial support for developing nations that are disproportionately bearing the brunt of a crisis largely created by the Global North.
As Common Dreamsreported earlier Sunday, since G7 leaders on Saturday put out a communiqué addressing a wide range of topics, campaigners around the world have decried the statement's support for further investments in planet-heating gas, calling it "a blunt denial of the climate emergency."