By Andrea Shalal
Barbados Prime Minister Mia Mottley is pushing for the establishment of a new World Bank finance facility to provide emergency liquidity to climate-vulnerable countries. This initiative, known as the Bridgetown Initiative 3.0, has gained support from many developing countries and aims to address the challenges posed by high debt levels, climate change, and slower economic growth.
In a speech to the Council on Foreign Relations, Mottley emphasized the need for a change in global attitudes and the restructuring of international financial institutions. The goal is to make it easier and more affordable for emerging markets and developing countries, many of which are at risk of debt distress, to access funding.
The Bridgetown Initiative 3.0 proposes various tax measures, such as levies on shipping and airlines, as well as a tax on the super-wealthy, to generate the necessary funds for climate-resilient infrastructure and sustainable development projects. The initiative estimates that $1.8 trillion annually is needed for climate-related investments and an additional $1.2 trillion each year to achieve the Sustainable Development Goals.
The plan calls for international financial institutions to give developing countries a greater voice in decision-making processes and advocates for reforms to the Group of 20 Common Framework for debt treatment. Additionally, it urges the World Bank to establish a dedicated "universal contingent finance facility" to provide emergency liquidity to climate-vulnerable countries after natural disasters.
Rajiv Shah, former Administrator of the U.S. Agency for International Development, praised the updated initiative, stating that it has the potential to mobilize trillions of dollars in funding for emerging markets and developing countries if implemented.
Analysis:
The Bridgetown Initiative 3.0 aims to address the pressing issues of climate change, high debt levels, and slow economic growth faced by many developing countries. By calling for reforms to international financial institutions and proposing tax measures to raise funds, the initiative seeks to unlock finance for climate-resilient infrastructure and sustainable development projects. If successful, this initiative could help countries adapt to climate change, reduce poverty, and promote long-term economic growth.