President urges IMF leader to champion innovative financing solutions for climate change
– also economic opportunities for small islands PRESIDENT Bharrat Jagdeo, on Friday last, urged the newly appointed Managing Director of the International Monetary Fund (IMF), Christine Lagarde, to support the fight against climate change by championing a shift away from traditional instruments of overseas development assistance (ODA) among multilateral lending institutions when dealing with funds for tackling climate change. Meeting on the margins of the World Bank/IMF annual meetings in Washington DC, Jagdeo urged Lagarde to support a shift to a new mindset in thinking about climate finance, highlighting that this is a new type of finance that is distinctly different from ODA, and one that requires new and different instruments.
He noted that developing countries are losing confidence in existing institutions, whose current set of financing instruments are not well suited for addressing the challenges associated with climate change, and that new thinking is needed to rebuild that confidence.
Jagdeo further emphasised that it would not be difficult to create the required instruments, and that this could be done without compromising environmental and social safeguards and fiduciary standards.
Under Jagdeo’s leadership, Guyana has taken pioneering steps to address climate change through its Low Carbon Development Strategy (LCDS) and in the establishment last year of the Guyana REDD+ Investment Fund (GRIF), which has thus far received US$70 million in performance-related payments for avoided deforestation from Norway in support of the LCDS.
However, disbursement of the funds towards much-needed development projects has been delayed by the bureaucracy and inflexibility of the international institutions involved, highlighting the urgent need for these institutions to develop innovative, new instruments to manage new types of finance.
President Jagdeo also raised the issue of the high levels of public debt in many Caribbean countries, and urged the IMF leader to consider debt relief for middle income countries with very specific sets of circumstances.
He noted that many of the small island countries in the Caribbean are dependent on few economic sectors, and are highly vulnerable to shocks such as natural disasters. High levels of debt in these countries is a major burden that limits economic growth and curtails development prospects.
President Jagdeo also emphasized the important role that debt relief from the IMF played in Guyana’s own history, noting that the country’s economic success over the past decade was made possible in part by the IMF funded programme of Heavily Indebted Poor Countries (HIPC) support in 1999.
Lagarde had herself previously served together with President Jagdeo on the UN Secretary General High Level Advisory Group on climate finance. President Jagdeo was joined at the meeting by Finance Minister Dr. Ashni Singh and Central Bank Governor Lawrence Williams.