PM: Middle-income nations risk becoming poor again

Prime Minister Mia Mottley has warned that middle-income countries like Barbados risk “becoming poor countries again” without an urgent increase in special drawing rights (SDRs) to help vulnerable nations weather the climate crisis.

Speaking at a forum on Climate, Development, and International Financial Institutions at the Global Development Policy Centre in the US on Tuesday, Mottley reinforced calls for new SDR issuance—equivalent to a fractional amount of gold equal to one US dollar.

“And if you don’t listen to us about the need to shock-proof vulnerable economies, middle-income countries will now become poor countries again. We have already established that poor people live in middle-income countries,” she said.

Mottley explained that existing buffers had, so far, kept poverty at bay in some countries. However, she warned that unless these economies were “shock-proofed”, people living in middle-income nations would slip into poverty.

Much of this, the prime minister suggested, depends on how the IMF responds, pointing to the organisation’s structure where 85 per cent approval is required to initiate change. Mottley emphasised that with the US holding 17 per cent of voting power, its position on SDR issuance is pivotal. “So, will there be a new SDR issuance as we have called for in Bridgetown? We need it. Whether there will be one or not, much will be determined by the next election here,” she added, underscoring the urgency of the request.

Mottley argued that the SDRs are needed for more than just climate action, stressing the inseparable connection between people and the planet. She noted that the COVID-19 pandemic had set back the achievement of Sustainable Development Goals (SDGs) by three years, and reaching the 2030 targets would now be more difficult.

She however called for reframing what is possible while extending the timeframe beyond 2030.

“When we call for these new SDRs, they need to go into the multilateral development banks, so that they can be scaled up, and to help to focus not just on the planet, but also on people,” she said.

The Barbadian leader stressed the urgency of addressing poverty, pointing out that it has been exacerbated by climate change, war, crime, and a host of other factors, but that underlying poverty had never truly been addressed.

She praised the World Bank for pledging to provide electricity to 300 million of the 600 million people in Africa who still lack it, but questioned, “Who is going to take on the other 300 million?”

Mottley warned against a slow, sequential approach to problem-solving, particularly given Africa’s young and increasingly impatient population.

“Young people naturally impatient, are not going to have the temperament to understand or to listen to why they are being deprived of the very thing that other young people globally have access to, because of access to education, because of access to electricity,” she said.

Mottley proposed that major tech companies be part of the solution to reducing poverty through education, suggesting they could help provide affordable tablets. “If a country doesn’t have enough teachers or enough materials, can we supply the tablets; can we supply them at an affordable cost; a rugged tablet for under US$50 (BDS$100)?” Mottley asked.

She emphasised that such innovations are possible, noting: “A world that can send a man to the moon; a world that can solve baldness for men; you mean to tell me you can’t solve the price for an affordable tablet to give children the opportunity to pursue knowledge?”