#BTColumn – The Bridgetown Initiative explained (Part 1)

Disclaimer: The views and opinions expressed by the author(s) do not represent the official position of Barbados TODAY.

By David Comissiong

In late July/early August 2022 there was an international gathering in Barbados of a significant number of eminent resource persons drawn from civil society and academia and equipped with deep insights into the deficiencies of the international economic and political order and the grave existential challenges facing humanity today. These experts  congregated in Barbados at the invitation of the Government of Barbados and engaged in several days of intense discussions about the way forward for the world community. And out of those discussions emerged the BRIDGETOWN Initiative – a concise plan of action for engineering a much needed revamp of the international economic and political order and its major institutions.

Barbados’ Prime Minister – Mia Amor Mottley – outlined the fundamental rationale for the BRIDGETOWN Initiative during her recent address to the 77th session of the United Nations General Assembly as follows:

“We must ask ourselves whether the time has not come for a review of the settlement of the Bretton Woods institutions that no longer serve the purpose in the 21st century that they served in the 20th century; that they served when they were catering to a quarter of the nation states that are now members of this august institution.

We ask ourselves whether the time has not come for our voices to act collectively, to demand this through the boards of directors of the respective institutions.  And why do I say so?

The International Bank for Reconstruction and Development is really what the World Bank is.  And maybe if we referred to that continuously, we would remind ourselves that the purpose of reconstruction and development must be appropriate to the century in which we live. And the century in which we live does not only demand of us the eradication of poverty, which remains a noble goal, but it demands of us, equally, the protection of global public goods.”

But even though Prime Minister Mottley’s primary focus was on the  Bretton Woods institutions – the International Monetary Fund (IMF) and the World Bank group of institutions – she also made it clear that the BRIDGETOWN Initiative extended to other less formal institutions of global power when she declaimed:-

“We also believe that the recognition of the G7 and the G20 countries as the informal subcommittee of governance of this world, if it is to be fair, must recognize that no longer can we accept that persons call (unsuccessfully) year after year after year for the people of Africa and African descent to be included in the G7 and G20. For how can a world have at its core a subcommittee that excludes more than 1.4 to 1.5 Billion people of the world and expect it to reflect fairness and transparency in its decision-making?

We ask that the determination be made by those countries, who must understand that if we are to move from possibilities to realities, we must embrace a transparent framework that allows our people who are losing faith in their institutions and in the governance of this world to understand that fairness means something – that fairness means the ability for all to have a voice.”

Having laid out the overarching perspective and framework of the BRIDGETOWN Initiative, Prime Minister Mottley then proceeded to delve into its specific components.  

STEP  ONE: PROVIDE EMERGENCY LIQUIDITY

First of all, the Prime Minister touched upon the very troubling issue of the debt crisis that is currently facing scores of developing countries as a result of the economic carnage caused by the COVID-19 pandemic, the disruption in global supply chains, and the inflation unleashed by the ongoing war in Ukraine:-

“I want to commend the International Monetary Fund (IMF) for their rapid financing mechanism at the beginning of the pandemic crisis.  And soon, for the Resilience and Sustainability Trust (RST) that is about to be launched………But I ask the IMF to reflect on the fact that that Resilience and Sustainability Trust…. will depend on more countries ….. agreeing, perhaps, to allow their Special Drawing Rights (SDRs) to be used there, just as we asked them to allow those SDRs to be used to allow multilateral development banks to significantly increase the money that is available to countries, particularly at this time when we are on the verge of a debt crisis, where more than 45 countries are facing the heat of the moment because of the increased cost of capital…..”

And so, it should come as no surprise that “Step One” of the BRIDGETOWN Initiative consists of measures to provide developing countries with emergency ready access to financial resources in order to stop the burgeoning debt crisis in its tracks.

Indeed, Step One of the Bridgetown Initiative was premised on the recognition that, in August 2022, no less than one in five countries was experiencing fiscal and financial stress, and – given the strong US dollar and the increased interest rates that come with the “quantitative tightening” policies of Central Banks – that ratio has now increased to one in four. 

Step One of the Bridgetown Initiative therefore consists of a demand that the IMF:

immediately return access to its unconditional rapid credit and financing facilities to previous COVID-19 crisis levels;

temporarily suspend its interest surcharges;

re-channel at least US$100 Billion of unused Special Drawing Rights (SDRs) to those countries that desperately need them; and

operationalize its new Resilience and Sustainability Trust by the month of October 2022.

Step One of the Bridgetown Initiative also calls upon the G-20 developed countries to agree upon and institute a Debt Service Suspension Initiative that includes all Multilateral Development Bank (MDB) loans to the poorest countries, as well as all COVID-19 related loans to the middle-income countries.

And so, Step One of the Bridgetown Initiative is designed to deal with the current emergency debt crisis. But as Prime Minister Mottley explained in her speech to the UN General Assembly, the multifaceted crisis that is facing the world today goes way beyond the COVID-19 induced debt crisis and is in fact systemic and structural in nature, and therefore requires some significant re-thinking and massive new investment to solve it!

STEP  TWO: EXPAND MULTILATERAL 

LENDING TO GOVERNMENTS

Prime Minister Mottley used the concept of “global public goods” to elucidate the profound developmental needs of the world community in general, and of developing countries in particular.  There must be a commitment to establish a Global Public Commons if we are not to unleash major challenges on all countries and the global population. This is how she outlined it in her speech to the UN General Assembly:-

“We believe, today, that the most appropriate place to deal with (and fund) “global public goods” is, in fact, the World Bank Group.…and that…multinational companies that have contributed to the global public risks or benefit from the solutions for global public goods (must also play a role) in…. funding the needs of countries – whether it is in the issue of climate – stability, resilience and adaptation; whether it is for the protection of biodiversity both on land and in our waters; whether it is for the protection of public health against the next pandemic;  or the provision of education for each of our citizens (because to remain on this earth without the benefit of education is to be sentenced to life imprisonment from a young age); or access to electricity – as 600 million people in Africa do without it; or, the equivalent to the right to knowledge and prosperity in our age – access to broadband; and…..believe it or not, the right to a bank account – because countries across the world are being denied the right to access correspondent banking, thereby leaving their citizens and their economies to function as financial pariahs in a world that is supposed to be globally interdependent for the movement of capital.

My friends, the provision of that Fund to promote public goods at a global level is critical if we are to make a difference going forward, and to achieve the peace, the love and the prosperity to which I referred.”

David Comissiong is Barbados’ Ambassador to CARICOM. 

EXPAND MULTILATERAL LENDING TO GOVERNMENTS

EXPAND MULTILATERAL LENDING TO GOVERNMENTS

Prime Minister Mottley used the concept of “global public goods” to elucidate the profound developmental needs of the world community in general, and of developing countries in particular.  There must be a commitment to establish a Global Public Commons if we are not to unleash major challenges on all countries and the global population. This is how she outlined it in her speech to the UN General Assembly:-

“We believe, today, that the most appropriate place to deal with (and fund) “global public goods” is, in fact, the World Bank Group.…and that…multinational companies that have contributed to the global public risks or benefit from the solutions for global public goods (must also play a role) in…. funding the needs of countries – whether it is in the issue of climate – stability, resilience and adaptation; whether it is for the protection of biodiversity both on land and in our waters; whether it is for the protection of public health against the next pandemic;  or the provision of education for each of our citizens (because to remain on this earth without the benefit of education is to be sentenced to life imprisonment from a young age); or access to electricity – as 600 million people in Africa do without it; or, the equivalent to the right to knowledge and prosperity in our age – access to broadband; and…..believe it or not, the right to a bank account – because countries across the world are being denied the right to access correspondent banking, thereby leaving their citizens and their economies to function as financial pariahs in a world that is supposed to be globally interdependent for the movement of capital.

My friends, the provision of that Fund to promote public goods at a global level is critical if we are to make a difference going forward, and to achieve the peace, the love and the prosperity to which I referred.”

David Comissiong is Barbados’ Ambassador to CARICOM. 

EXPAND MULTILATERAL LENDING TO GOVERNMENTS

Prime Minister Mottley used the concept of “global public goods” to elucidate the profound developmental needs of the world community in general, and of developing countries in particular.  There must be a commitment to establish a Global Public Commons if we are not to unleash major challenges on all countries and the global population. This is how she outlined it in her speech to the UN General Assembly:-

“We believe, today, that the most appropriate place to deal with (and fund) “global public goods” is, in fact, the World Bank Group.…and that…multinational companies that have contributed to the global public risks or benefit from the solutions for global public goods (must also play a role) in…. funding the needs of countries – whether it is in the issue of climate – stability, resilience and adaptation; whether it is for the protection of biodiversity both on land and in our waters; whether it is for the protection of public health against the next pandemic;  or the provision of education for each of our citizens (because to remain on this earth without the benefit of education is to be sentenced to life imprisonment from a young age); or access to electricity – as 600 million people in Africa do without it; or, the equivalent to the right to knowledge and prosperity in our age – access to broadband; and…..believe it or not, the right to a bank account – because countries across the world are being denied the right to access correspondent banking, thereby leaving their citizens and their economies to function as financial pariahs in a world that is supposed to be globally interdependent for the movement of capital.

My friends, the provision of that Fund to promote public goods at a global level is critical if we are to make a difference going forward, and to achieve the peace, the love and the prosperity to which I referred.”

David Comissiong is Barbados’ Ambassador to CARICOM.