A Tortoise ThinkIn in partnership with
Date: Monday 5 December 2022
Host: Giles Whittell, Deputy Editor, Tortoise Media
Our current interlocking global crises, namely climate change, war in Ukraine, pandemics and growing inequality, must be tackled by reorganising global power and evolving our international order. Rather than admiring the problem, this ThinkIn asked ‘What the world would look like if it was fairer, and how we might get there?’
The contributors for this ThinkIn were Gayle Smith, the CEO of the ONE Campaign, Avinash Persuad, the Special Envoy to Mia Mottley, the PM of Barbados, Martin Wolf, an Associate Editor and Chief Economics Commentator at the Financial Times and Frances Coppola, a prolific commentator for the BBC, Financial Times. There was also input from the online-audience in the Zoom chat.
Select points from the chat:
“The problem isn’t with the EU, or the WTO, or national governments, etc in principle, but in the practice that there will always be selfish interests that get some power and use it to their own advantage” – Jennifer Allerton
“What would I change? A universal income; pay politicians a heck of a lot more; but bring in severe restrictions and harsh punishments for straying; significant and terrible fines for corporations for falling short of meaningful ESG rules; meaningful rewards for companies that do social good; city/town-wide vouchers for SMEs (customers pay £5; get £10 to spend at local cafe); remove all obstacles to green energy. I hope the thing that replaces neoliberalism is a system which shows we individually win when our communities win. We help ourselves by helping others.” – Andrew Girdwood
“Here’s a stat: The United States, with a population of 330 million people, controls roughly 16 percent of the voting power at the IMF and World Bank, while Africa’s fifty-four countries, accounting for 1.4 billion people‚ collectively have a voting share of roughly 7 percent. Per capita, an American’s vote is worth twenty times as much as a Nigerians at the IMF, and sixty-four times that of an Ethiopian. That needs to change” – David McNair
Global problems, global solutions
Our world is riddled with challenges, and the current mechanisms to resolve them are not fit for purpose. Much of the ways we convene global power – the G20 summit, G7 Summit, UN, IMF, World Bank – have been modelled on a Western system of governance, and were born out of a post-World War 2 crisis, which are outdated for our modern times.
The following list is a starting point for how we might build a fairer world in an era of polycrisis:
- Invest $1 trillion in Multilateral Development Banks (MDB). MDBs are underfunded and are ill-equipped to tackle all 17 Sustainable Development Goals effectively. According to Avinash Persuad, the G20 working party has shown that they can lend about one trillion dollars more – 3X the annual lending today – over the next 10 years. How can this be mobilised? Start with an annual Spring Meeting and encourage a greater risk appetite from the investing community by protecting their investments.
- Provide emergency liquidity. Allow governments access to greater emergency liquidity during moments of crisis. For example, the IMF should return access to its unconditional rapid credit and financing facilities to previous crisis levels and temporarily suspend its interest surcharges.
- Expand concessional lending. Many of the world’s poorest people live in countries that are not eligible for concessional borrowing from multilateral development banks. Given that concessional lending is scarce, it would be prudent to lend money to climate vulnerable countries only when they are investing in climate resilience mechanisms.
- Reform our global debt architecture. The Bridgetown initiative calls for a ‘Global Climate Mitigation Trust’, backed by $500 billion in unused Special Drawing Rights (SDRs) for climate mitigation and development.
- Follow the spirit of the EU. Regional collaboration and a shared identity will help to improve our preparedness to regional and global polycrises.
- Modernise frequently. Our international bodies — such as the UN, EU, etc – should be modernised and revolutionised every 60 or 70 years, so that they can keep pace with changing global challenges and renegotiated power hierarchies.
- Look forward, not back. Rather than look upon the past with rose-tinted glasses, we need to be stubbornly forward-thinking, optimistic, and embrace uncertainty in the future.
- Use quantitative easing constructively. Frances Coppola remarked that quantitative easing (QE) allowed governments in the post-1930s depression “to get away with brutal treatment of vulnerable people”. Covid-19 was a good example of how QE can be used constructively by governments to pull countries out of recession and give money to businesses more directly. However, it should be treated with caution, and not be used as a silver-bullet for every crisis.
- Short-termism needs to go. Politicians who are elected for four five six year terms are often begrudged to think of issues that seem far into the future, outside of their elected term. However, investing now in the resilience needed for the future, across the spectrum of all transnational threats, will be cost-effective and serve society well as a whole.
- The solution is a set of building blocks. Taking action, step-by-step, can be just as transformational and revolutionary as tackling an issue all in one go. Be patient, mobilise and collaborate with others, and be resolutely focused on achieving the Sustainable Development Goals.