Global Financial Institutions Must ‘Respond to Today’s Challenges’, Says Secretary-General at Meeting with G20, Bretton Woods Banks

Following is UN Secretary-General António Guterres’ address at a joint meeting of the Group of 20 (G20) foreign ministers, the United Nations system and international financial institutions, held in New York today:

I thank President Luiz Inácio Lula da Silva and the Government of Brazil for co-convening this meeting between G20 foreign ministers, all UN Member States, and the international financial organizations.

This is a historic first.  The G20, the United Nations system and the Bretton Woods institutions and other international financial institutions deal with some of the most important challenges of our time:  inequality, financing for development, the climate crisis, the impact of new technologies.

In all these areas, progress is slipping out of reach as our world becomes more unsustainable, unequal and unpredictable.

Conflicts are raging, the climate crisis is accelerating, inequalities are growing, and new technologies have unprecedented potential for good — and bad.

Global institutions must work together — not on parallel or conflicting tracks.  They must cooperate and collaborate for the good of humanity and the Summit of the Future was an essential first step.  It has created opportunities and possibilities for reform across the board.

But without implementation, it will be meaningless.  The work starts today.  The Pact for the Future is about action in the here and now.  And G20 countries can act in three specific areas.

First, finance.  We need ambitious reforms of the international financial architecture to make it fully representative of today’s global economy, so it can provide strong support to implement the Sustainable Development Goals.

I commend the leadership of the World Bank and International Monetary Fund for making important progress.  But the resources available are still dwarfed by the size of the needs.  Many developing countries are being hit by a double whammy of climate chaos and debt.

To support low- and middle-income developing countries effectively, multilateral development banks must be bigger, bolder and better. We need a far more robust financial safety net to shield countries in a world of frequent shocks.  Voting rights and decision-making rules should reflect the changing global landscape.  And access to concessional finance should be based on needs and vulnerabilities, not just on income.

All parts of the global financial system must work together to reduce the cost of finance and the inequalities that blight our world.  This demands action on debt — starting with an effective mechanism to deal with debt relief and restructuring.

As a first step, I welcome the commitment by the International Monetary Fund to review the debt architecture — as set out in the Pact for the Future.

I look to all G20 countries to push for deep reforms so that global financial institutions reflect today’s world and respond to today’s challenges.

One of those challenges is global hunger.  It is shameful that in our world of plenty, around one person in 10 regularly goes without food for an entire day or more — known as severe food insecurity.  I welcome President Lula and Brazil’s focus on global hunger during the G20 presidency and call on all G20 countries — and all UN Member States — to strengthen efforts to end this affront to our common humanity.

The second area for action is climate.  We are at a critical moment:  a battle to prevent temperatures from rising above the agreed limit of 1.5 degrees.  Today’s decisions and actions will determine the course of our world for decades to come.

The climate crisis transcends borders and politics.  Climate action cannot be a victim of geopolitical competition.

Under G20 leadership we will be able to have drastic reductions in fossil fuel production and consumption as an essential element for climate action.  By 2030, global production and consumption of all fossil fuels must decline by at least 30 per cent — and global renewables capacity must triple. This requires OECD countries to phase out coal by 2030 and to fully decarbonize power generation systems by 2035.  And it means non-OECD countries must phase out coal by 2040.

I have been strongly advocating for no new coal or upstream oil and gas projects for all G20 nations.  New national climate plans due next year are an opportunity for countries to align energy strategies and development priorities with climate ambition, taking into account the principle of common but differentiated responsibilities. They must also show how each country intends to transition away from fossil fuels, in line with the outcome at COP 28.

There has never been a greater global challenge than the climate crisis.  There has never been more agreement on the solution:  a just transition from fossil fuels to renewable energy.  And renewable technologies have never been better — or cheaper.  The obstacle to the renewables revolution is not economics or a lack of solutions.  It is mindsets, and lack of vision.

Those that lead the renewables revolution are already reaping the rewards.  But many developing countries are being left behind.  Clean energy investments in emerging and developing economies outside China and India have barely increased since 2015.  The energy transition must be based on justice and equity, so that all countries benefit.

Third, we need strong, inclusive, legitimate global institutions and tools to tackle the challenges of today and tomorrow.  Fair and representative governance is a first step to unlock broader reforms.

The Pact for the Future includes commitments to make multilateral institutions more representative, effective, transparent and accountable.  I urge the strong engagement of G20 countries, including in reforms of our United Nations bodies:  making the Security Council truly representative by addressing the under-representation of Africa, Asia-Pacific, Latin America and the Caribbean; strengthening the role of the General Assembly and the Peacebuilding Commission; and enhancing the Economic and Social Council.

The same principle applies to the international financial architecture:  it should correspond to today’s global economy with much stronger representation of developing countries.

For our part, the United Nations is totally committed to strengthening our convening role as an inclusive platform for dialogue and action. As part of that role, from next year, we intend to host biennial summits to formalize a dialogue between the UN system, the G20 and international financial institutions.  Only together will we achieve the reforms in the Pact for the Future and deliver the SDGs and the Paris Agreement, to meet the expectations of the people we serve.

I urge the G20 to seize every opportunity to raise ambition for global leadership and transformative action for a safer, more peaceful and sustainable world for all.