Mottley: Global financial system driving vulnerable nations back into poverty

Seigo­nie Mo­hammed

Bar­ba­dos Prime Min­is­ter Mia Mot­t­ley has launched a blis­ter­ing at­tack on the in­ter­na­tion­al fi­nan­cial sys­tem, ac­cus­ing glob­al lenders of ex­ploit­ing cli­mate-vul­ner­a­ble coun­tries and warn­ing that ex­ist­ing fi­nan­cial rules are ef­fec­tive­ly push­ing de­vel­op­ing na­tions back in­to pover­ty.

In strong­ly word­ed in­ter­ven­tions on cli­mate fi­nance and in­ter­na­tion­al trade, Mot­t­ley con­demned a sys­tem in which coun­tries fac­ing dev­as­tat­ing dis­as­ters are forced to pay high­er in­ter­est rates pre­cise­ly when they can least af­ford them.

“If you see a coun­try falling, do you now want to ex­ploit them by charg­ing them high­er in­ter­est rates or by deny­ing them ac­cess to a fair and lev­el play­ing field for in­ter­na­tion­al trade trans­ac­tions? That is what we are do­ing,” she de­clared.

The Bar­ba­di­an leader ar­gued that mid­dle-in­come coun­tries, in­clud­ing vul­ner­a­ble Caribbean states, are be­ing pun­ished for their eco­nom­ic progress be­cause in­ter­na­tion­al fi­nanc­ing arrange­ments fail to recog­nise their ex­po­sure to cli­mate dis­as­ters.

“We do not do any­thing for mid­dle in­come coun­tries that are vul­ner­a­ble,” she said.

“And there­fore, we pe­nalise them by say­ing that you have done a good job to lift your­self out of pover­ty. So now go on a tread­mill that will re­turn you to pover­ty.”

Mot­t­ley said the sit­u­a­tion de­mands ur­gent re­forms to the rules gov­ern­ing in­ter­na­tion­al lend­ing, in­clud­ing how debt sus­tain­abil­i­ty is as­sessed and how cred­it rat­ing agen­cies eval­u­ate vul­ner­a­ble economies.

She ar­gued that coun­tries can­not re­al­is­ti­cal­ly in­vest in cli­mate re­silience if ex­ist­ing bor­row­ing re­stric­tions pre­vent them from ac­cess­ing the fi­nanc­ing re­quired.

“You can of­fer me as much mon­ey as I want,” she said, be­fore warn­ing that re­stric­tive debt sus­tain­abil­i­ty as­sess­ments could still force gov­ern­ments to sac­ri­fice es­sen­tial in­vest­ments.

Mot­t­ley, who chairs the V20 group­ing of cli­mate-vul­ner­a­ble coun­tries, al­so called for stronger in­ter­na­tion­al sol­i­dar­i­ty to force changes in glob­al lend­ing prac­tices.

Among her pro­pos­als is the wider adop­tion of nat­ur­al dis­as­ter and pan­dem­ic claus­es in gov­ern­ment bor­row­ing arrange­ments.

Such pro­vi­sions, she ex­plained, would al­low coun­tries to sus­pend prin­ci­pal and in­ter­est pay­ments for two years af­ter cat­a­stroph­ic events, free­ing re­sources to re­build com­mu­ni­ties and re­store liveli­hoods.

She cit­ed Bar­ba­dos' ex­pe­ri­ence is­su­ing bonds with dis­as­ter and pan­dem­ic claus­es as ev­i­dence that in­ter­na­tion­al in­vestors can ac­cept those pro­tec­tions.

Mot­t­ley al­so chal­lenged de­vel­op­ment banks to of­fer loans last­ing 40 to 50 years, with re­pay­ment mora­to­ri­ums of 15 to 20 years, par­tic­u­lar­ly for es­sen­tial in­fra­struc­ture.

She iden­ti­fied wa­ter, health­care and ed­u­ca­tion as im­me­di­ate pri­or­i­ties for cli­mate-vul­ner­a­ble economies.

“We can't build and do every­thing at once. We can't boil the ocean,” she said.

But be­yond the tech­ni­cal re­forms, Mot­t­ley framed the is­sue as a fun­da­men­tal ques­tion of jus­tice.

“This is a mo­ment for course cor­rec­tion. Be­cause we have to start first and fore­most with what is fair and what is moral.”

Her mes­sage un­der­scores the stakes for Caribbean coun­tries con­fronting in­creas­ing­ly de­struc­tive cli­mate events while strug­gling to fi­nance re­cov­ery and long-term de­vel­op­ment.

For Mot­t­ley, the cen­tral ques­tion is no longer whether the in­ter­na­tion­al fi­nan­cial sys­tem needs re­form, but how much longer vul­ner­a­ble na­tions must suf­fer be­fore mean­ing­ful change ar­rives.