Ministers of Finance and Governors of Central Banks,
We are writing to you ahead of the third meeting of G20 Finance Ministers and Central Bank Governors on 15-16 July to share with you our key recommendations for overcoming extreme poverty now, following the outcomes of your first and second meetings held February 17 and 18 and April 20 respectively.
As the world continues to grapple with the effects of the pandemic on everyone’s health, we must also respond to the multiple crises exacerbated by the pandemic and address the underlying systemic causes of inequity, including addressing the collapse of the global food system made worse by the invasion of Ukraine. . We urge you to support the following key actions leading up to this year’s G20 Summit:
Unlocking public funding to end extreme poverty
Since the start of the pandemic, the wealthiest countries, including those in the G20, have accessed more than $16 trillion in stimulus to support their people and economies. Poorer countries, on the other hand, had no such access. The G20 must take action that enables low- and lower-middle-income countries to respond to the pandemic and recover from its multiple effects. We therefore ask you to support the following critical measures:
Reallocate at least $100 billion in special drawing rights (SDRs): Last year, the G20 pledged to reallocate $100 billion in special drawing rights to countries most in need, but this aspiration has yet to be fully met. We urge countries to not only meet, but exceed this $100 billion target by reallocating at least 25% of their new SDRs (or an equivalent amount in another currency) by the annual meetings of the International Monetary Fund /World Bank in October 2022. We urge to maximize the impact of these funds on development, using the IMF but also the multilateral development banks and the International Fund for Agricultural Development (IFAD), and to ensure that these SDRs are complementary to official development assistance (ODA).
Making the global tax system work for everyone: The G20 should ensure that ongoing global tax reforms benefit all countries by simplifying the rules and reallocating the rights to tax all multinational profits (not just residual profits) to market jurisdictions , including the poorest countries. This way we can ensure that multinationals pay the taxes they should and not only to their country of residence, but also to all the countries in which they have customers – the market jurisdictions that would otherwise lose out. in this potentially historic reform.
Prevention, preparation and response to pandemics
The devastating spread and evolution of COVID-19 has been exacerbated by a lack of cooperation and political will to act collectively with a decisive and equitable global response. Countless lives have been needlessly lost.
As hundreds of millions of people in developing countries remain unvaccinated, systemic barriers continue to surround access to medical technology, and health systems are under-resourced and unprepared for the next virus threat, the G20 must heed the lessons of the COVID-19 pandemic and act to ensure it never happens again. We therefore call on the G20 to commit to:
We acknowledge the intention of G20 countries to establish a new Financial Intermediary Fund (FIF) housed at the World Bank that will be dedicated to closing the funding gap for pandemic preparedness and prevention. and response. Sufficient, predictable, prioritized and peacetime funding will be crucial to avert the next pandemic threat, but the IFF must be set up on the basis of equity, accessibility, timeliness, additionality and transparency:
- The governance of the FIF should be structured to ensure a fair and equal voice for low- and middle-income countries in terms of decision-making and accountability;
- Access to funds should not be subject to unfair or unequal funding conditions, or be heavily restrictive in such a way as to prevent access to basic needs related to health system strengthening, primary health care delivery , etc. ;
- Funding should be made available to low- and middle-income countries in a timely manner, when needed, particularly under the threat of a pandemic, to ensure more equitable purchasing power for medical countermeasures ;
- The FIF should be structured in a way that avoids duplication in the global health ecosystem, particularly with regard to high-impact mechanisms such as the Global Fund to Fight AIDS, Tuberculosis and Malaria, and so make the best use of available resources;
- The views and concerns of civil society organizations, especially those from the Global South, must be heard and taken into account in the development of the IFF.
World leaders have repeatedly agreed that diversifying the production of medical countermeasures, such as vaccines, is crucial to prepare for and better respond to the next pandemic threat. This can only be done successfully if scientists and producers in the Global South are empowered and empowered. The G20 should take action at national and international levels to ensure that there are no intellectual property (IP) barriers that impede the development of the WHO-supported mRNA technology transfer center . This is particularly relevant in jurisdictions like South Africa, where the hub is based, and those containing key spokes like Argentina, Brazil and Indonesia. This also relates to intellectual property beyond COVID-19 vaccines, as the Hub intends to take full advantage of the mRNA platform to develop expertise and manufacturing capacity across its spokes to combat a range of infectious diseases.
Acting against climate change and hunger
Mitigation and adaptation to climate change must be at the center of global efforts to end extreme poverty. Conflicts and climate change are currently among the main causes of hunger in the world, which has reached record levels.
By empowering smallholder farmers to cope with the impacts of climate change, we can prevent the global hunger crisis from worsening, which now includes the 500 million people who will face chronic hunger due to ongoing violence in Ukraine, one of the main producers of basic foodstuffs. The decisions taken by the G20 must fight against climate change and protect the planet by supporting the most vulnerable communities.
Collective action is needed to end fossil fuels. Fossil fuel subsidies must be reinvested in clean, fair and sustainable energy systems and green recoveries. In response to your February communiqué, the G20 must commit to concrete plans to phase out fossil fuel subsidies by 2025 or earlierwhile providing targeted support to the poorest and most vulnerable.
We call on governments to act immediately on the Pledge of $100 billion a year on climate finance through 2025 help developing countries reduce their emissions and deal with the effects of climate change. This financing must be provided by equitable contributions from rich countries and must be new and complementary to official development assistance (ODA). In this context, the G20 must recognize the role of the Green Climate Fund in mobilizing critical international climate finance and ensure a full and successful replenishment for 2024-2027.
Significant resources for climate change adaptation should be allocated to rural communities and smallholder farmers, including through IFAD’s Adaptation Enhancement for Smallholder Agriculture Program (ASAP+). We also call on the G20 to invest in science and research to provide evidence and tools to transform the global food system, reduce poverty and improve natural resources and ecosystem services. Empowering smallholder farmers is now essential for future resilient and local food systems, and this requires doubling investment in agricultural research.
Several billion dollars must be raised to ensure both an emergency response in areas at risk of famine and long-term investments to prevent future food crises. The initial response from the G7 is only a drop in the ocean. All G20 governments should strive to fund a multilateral response to support the United Nations Global Crises Response Group (UNGCRG), the International Financial Institutions (IFIs) Action Plan to Address Food Insecurity, the Food and Agriculture Resilience Mission (FARM) and the Global Alliance for Food Security (GAFS). The coordinated response should ensure famine prevention, including funding the Crisis Response Initiative (CRI) of the International Fund for Agricultural Development, the World Food Program and others. Governments must also stand firm to keep food and agricultural markets open and guard against unjustified restrictive measures on food and agricultural exports.
We are ready and would appreciate the opportunity to discuss these needs further with your team.
Please listen to us and take action! The world is watching.