 "Global financial architecture outdated: UN secretary-general Guterres")
The global financial architecture is outdated, dysfunctional, unfair, and needs deep structural reform, United Nations Secretary-General António Guterres said on Friday.
Addressing the media, Guterres said the same could be said of the United Nations Security Council. “We need effective international institutions rooted in 21st century realities based on the UN Charter and international law,” the Secretary-General said.
“That is why I have been advocating for bold steps to make those global institutions truly universal and representative of today’s realities, and more responsive to the needs of developing economies,” he said.
On India joining the UN Security Council, Guterres hinted the country was a prime candidate. “It is not for me to decide which country gets to be part of the Council. It is obvious that India is today the country with the highest population in the world, as well as an important partner in the world multilateral system,” he said.
Focus on climate
Warning that half-measures would not prevent full climate breakdown, Guterres said G20 nations needed to keep the goal of restricting global temperature rise to 1.5 degree.
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“Leadership means rebuilding trust based on climate justice. And advancing a just and equitable transition to a green economy,” he said.
Together, G20 countries are responsible for 80 per cent of global emissions.
The UN has put forward a Climate Solidarity Pact to the G20, where big emitters make extra efforts to cut emissions, and wealthier countries support emerging economies to achieve this.
Stressing this need for climate justice, the Secretary-General said rich nations not only need to reduce emissions but financially help poorer countries adapt to climate change.
Earlier this year, Guterres presented a plan to super-charge these efforts through an Acceleration Agenda.
It calls on developed countries to reach net-zero as close as possible to 2040, and emerging economies as close as possible to 2050. It also proposes phasing out coal by 2030 in OECD countries and 2040 in all others, as well as ending all licensing or funding of new fossil fuel projects.
Sustainable development goals
Guterres said the G20 nations needed to put in financial stimulus worth at least $500 billion per year towards meeting the sustainable development goals. This includes a more substantive rechanneling of unused special drawing rights to increase liquidity where it is needed most, he said.
The UN has pushed for an effective debt workout mechanism to support payment suspensions, longer lending terms, and lower rates on fairer terms.
“A meaningful capitalisation and change in the business model of multilateral development banks to be able to massively leverage private finance,” he said.