The Finance Minister, Hon. Ken Ofori-Atta who chairs the 4th Development Committee plenary meeting of the International Monetary Fund (IMF) and the World Bank successfully exits, having served 2-years as Chairman of the Committee.
“The 2020 Development Committee plenary was held virtually on Friday, 16th October 2020. The Committee is an inter-ministerial Committee of Finance and/or Development Ministers who represent the full membership of the Bank and Fund”.
The Minister of Finance, in his opening address at the plenary, quoted that “the crisis is threatening to reverse years of development gains and throw hundreds of millions of people back into poverty.”
Two key topics discussed at the plenary were “Leaning Forward to Save Lives, Scale-up Impact and Get Back on Track: World Bank Group COVID-19 Crisis Response Update” and the “Joint IMF-WBG Staff Note on the Implementation and Extension of the Debt Service Suspension Initiative”.
Also, a “build-back strategy” for the global economy, was reviewed by the committee bearing in mind the “unprecedented ravages” caused by the coronavirus pandemic.
“The pandemic has resulted in the largest global economic contraction of the last eight decades. It has also overwhelmed health systems, disrupted productivity, exacerbated job losses, reduced incomes, and threatens global food security particularly for the most vulnerable”.
Touching on the significance of the G20 Debt Service Suspension Initiative (DSSI) in giving fiscal space to economies, Hon. Ken Ofori-Atta intimated that “since its endorsement, many of the poorest countries have worked closely with official bilateral creditors. The moratorium has been a critical liquidity intervention to save much needed resources to tackle the crisis before us.” There should be an extension as well as a re-examination of the DSSI for 2years, the Minister added.
The World Bank President, Mr. David Malpass adding his thoughts on the DSSI, asserted that a new framework that establishes a “fair and balanced relationship” amongst creditors and debtors is necessary to reduce debts.
Again, Mr. Malpass speaking on the issue of vaccine finance highlighted that the Bank’s Board of Directors approved $12 billion additional funding to assist countries to procure and dispense vaccines to ensure that “initial vaccine doses are available to those who need them first in IDA and IBRD countries with limited access”.
“Financing will be available immediately.”
“As a ‘Global good’, we need to be more innovative about providing free access to everyone”, Hon. Ken Ofori-Atta opined.
Speaking at the plenary, the Managing Director of the IMF compared the uneven fiscal response deployed by Advanced Economies to Developing countries.
“Developed Economies have averagely deployed fiscal stimulus of about 20 percent of GDP, emerging markets up to 6 percent of GDP, while Low Income and Developing Countries have deployed, on average, 2 percent”.
“The International Community should therefore not prematurely withdraw fiscal support to developing economies as they remain the most vulnerable. LIDCs need strong support from the international community to overcome the crisis and embark on a sustained recovery.”
The Minister, in his remarks, further asserted that “the COVID-19 Pandemic has brought us to this precipice, a tipping point where critical action must be taken to avert imminent disaster. A lot has been said within the last 8 months about what is upon us and what needs to be done to ensure a just and inclusive recovery for all; but a lot more needs to be done”.
The US and Europe are required “to facilitate the issuance of new and unused SDRs” and “the DSSI needs to be debt reductive” the Minister added.
Also, the Finance Minister went on to say that to make sure there is “universal participation” and “the spirit of comparable treatment of all creditors”, a debt restructuring programme, should be instituted for Africa in conjunction with China and the private-sector creditors.
“There should be debt forgiveness and cancellation for vulnerable and debt distressed countries”.
“A special Secretariat to work towards establishing a ‘fit for purpose’ and new global financial architecture as was done in Bretton woods” must be instituted, he opined.
Finally, the Minister of Finance acknowledged the Fund and Bank for their “incredible leadership and passion” and reminded the committee of his farewell note.
His farewell note – A CALL TO RIGHTEOUS ACTION – circulated to the Members of the Committee and Executive Directors of the World Bank Group in which he shared with them, a collection of artwork and symbolism that has over the years, been life-changing tools of reflection for him – at Achimota High School in Ghana, Columbia College and Yale University in the US, on Wall Street, as a Henry Crown Fellow of the Aspen Institute, during his life as an Entrepreneur in Ghana and in his Christian Faith.
Hon. Ken Ofori-Atta wrapped up with a quote from Martin Luther King “In the end, we will remember not the words of our enemies, but the silence of our friends” and charged them to the effect that “the burden of responsibility we feel today should stir us to righteous action; and if we seek His righteousness to guide us, I am confident that together we will be victorious!”
Ms. Mia Amor Mottley, Prime Minister and Minister of Finance of Barbados, and Ms. Azucena Arbeleche, Minister of Economy and Finance of Uruguay, took over from Hon. Ken Ofori-Atta, Ghana’s Finance Minister as sequential DC Chairs, starting November 2020 to October 2022.
