By Kenton X. Chance
United Nations Secretary General Antonio Guterres arrived in St. Vincent and the Grenadines (SVG) on Thursday for the Eight CELAC Summit, saying he would focus on financing for climate change adaptation and reform of international financial institutions.
Guterres is slated to address leaders from the hemisphere during the one-day 8th summit of the Community of Latin American and Caribbean States to be held at Buccament Bay today.
He held a joint press conference with Prime Minister of St. Vincent and the Grenadines, Ralph Gonsalves, at Argyle International Airport, where he paid tribute to the government and people of SVG and flagged a number of regional, hemispheric and global issues.
Guterres expressed “a deep solidarity” to the countries of Latin America and the Caribbean.
“Many of the economies of the continent are in deep trouble. When the COVID devastated the world, the truth is that developed countries like mine in the European Union, were able to print money in large quantities, to support their people, and to support the economy,” said Guterres, who was born in Portugal.
He said that the overwhelming majority of countries in Latin America and the Caribbean “could not print money, because if they would have to print money, their currencies would suffer enormously”.
Therefore, these counties had to borrow “in order to solve the problems of their people and their economy after the COVID.
“And we see now, so many economies in this continent drowning in debt, and we see that an unfair, ineffective and outdated international financial architecture has proven unable to support these countries in this moment of distress.”
Guterres said that to make things worse, with the war in Ukraine and with other impacts, prices and interest rates went up.
“The impact on the economies has been terrible. But many of the economies of the region are middle-income countries and middle-income countries have no access to concessional funding, and they have no access to debt relief that is effective.
“It’s time for a reform of our international financial institutions. It’s time for a new Bretton Woods movement in which developing countries can see an international financial system able to address the enormous challenges that they face.”
The Bretton Woods Agreement was reached by representatives of 44 nations at a 1944 summit in the United States.
It brought about the creation of the International Monetary Fund and the World Bank and required a currency peg to the U.S. dollar which was in turn pegged to the price of gold.
Meanwhile, Guterres also had a word of solidarity with small island developing states, noting that they are in the frontlines of the fight against climate change.
“They are the ones that suffer more with the impacts of climate change. And they have not contributed to climate change, but even not having contributed to climate change, they are also in the frontline of adopting the measures of mitigation to reduce emissions that are, of course, very limited from the beginning, but to show their solidarity with the world,” he said.
The United Nations secretary-general said it was “absolutely essential” that there be a much bigger ambition in relation to the reduction of emissions, adding that this is “essentially a responsibility” of the G 20 countries that represent 80% of the emissions.
“But we need much more climate justice, which means much more finance available at reasonable cost for adaptation and mitigation for developing countries and in particular, for small island developing states.”
He said the summit “is the moment” to recognise that countries of Latin America and the Caribbean that have been victims of an unfair international financial system, and that many of them in particular are victims of runaway climate change, have the right to claim for the reforms that are necessary in order to create the conditions for their governments to be able to act, providing their peoples with response to the needs that need to be addressed.
“Because it is absolutely unacceptable for lack of investment in education or in housing or in infrastructure that is paying the price of an unfair international financial system in a moment of global multiplication of wars and conflicts that represents a threat to international peace and security.”
On the issue of climate justice, Guterres noted that the loss and damage fund has not been capitalised, adding, “We need much more than what was promised.”
He also said there is a need for clarification on how the adaptation funding will double and the commitments that should emerge of making 50% of international funding on climate for adaptation.
“We need to clarify once and for all how the 100 billion that developed countries have promised per year are implemented,” Guterres said.
“And we need to do the reforms in the way international financial institutions work,” he said, adding that they need to increase their capital level and “change their business model in order to be able to mobilise much more resources and to attract private capital at reasonable cost for support of developing countries in climate action”.
CELAC was founded in 2011 and held its first summit with the European Union for eight years after Kingstown took over the pro tempore presidency. The summit should have been held every two years.
Gonsalves said CELAC is an integration mechanism in Latin America and the Caribbean and has a population of 650 million people.
He noted that its members include Brazil and other G20 economies such as Mexico and Argentina and countries that have “tremendous influence in the global system” such as Colombia, Venezuela and Chile as well as “the exemplar of Cuba”.
“And this particular bloc of countries has grown in influence in the world. And certainly, CARICOM as part of this large bloc of countries, they exercise influence within that block, and through that bloc across the multilateral system,” Gonsalves said.
He said the details and extent of the functional cooperation and advocacy in CELAC would be embodied in the outcome document, the Declaration of Kingstown, slated to be adapted during the summit, as well as the speeches of the 33 states.
The summit will also be attended by “special guests” from other countries such as India, China and the European Union.
Asked about the importance of CELAC amidst a number of overlapping integration blocs in the hemisphere, Guterres said he has always been “a supporter of integration — economic integration, political integration — as a key instrument for regions to be able to allow their countries to cooperate more strongly and cooperating more strongly to be able to better defend the interests of their peoples.
“So, I believe that CELAC is an extremely important tool to push for progressive economic and political integration in the Latin American and Caribbean world.”