- Egypt’s finance minister says multilateral development banks need to help provide solutions for emerging markets struggling with debt and the climate crisis.
According to Bloomberg article published on November 9, 2022, a world hit with inflation, rising debts and growing climate impacts needs development banks to step up, said Mohamed Maait, Egypt’s finance minister. “More financing at a reasonable cost and on reasonable terms,” Maait said, would count as a success at COP27.
Wednesday is the “Finance Day” in Sharm El-Sheikh, Egypt where the discussion will be focused on the needs of developing countries, especially those in Africa. The Egyptian presidency want this year’s United Nations-sponsored climate conference to turn the many promises that countries and companies have made into real actions.
“The amounts required for implementation are huge,” Maait said in an interview. “Now, we are talking trillions not billions” of dollars.
Rich countries, which are yet to fulfil a goal of providing $100 billion annually to poor nations for cutting emissions and adapting to a warming planet, are finding it hard to stump up the cash given the macroeconomic environment. Rishi Sunak, prime minister of the UK, which handed over the presidency of COP meetings to Egypt earlier this week, announced new initiatives to protect forests, but it won’t be increasing the total amount it spends until over the next four years.
Maait hopes that multilateral development banks, such as those within the World Bank and the African Development Bank, will provide solutions for emerging markets. A strong dollar has exacerbated the difficulty for developing countries in making their debt repayments. The Egyptian pound is down around 50% against the dollar this year, for example.
Another idea is to allow for sovereign debt tied to climate goals. Maait said that discussions at COP27 can create a model for such debt, which is approved by credit-rating agencies. “We need to understand that time is against us,” he said.
