WASHINGTON — The 20 most climate-vulnerable countries are considering suspending payments on $685 billion in collective debt, a loan they say is ‘fraudulent’, says ex-President of Maldives Mohammad Nasheed said on Friday.
As the World Bank and International Monetary Fund conclude their annual meetings in Washington on Sunday, Nasheed said he would tell officials that countries are considering whether to stop paying their debts. instead seeks a debt exchange in which some of the country’s debt will be forgiven and invested in conservation.
Nasheed, who held an underwater ministerial meeting in 2009 and brought the world’s attention to the archipelago nation in the Indian Ocean, said, “We live not only on borrowed money, but on borrowed time. We are under threat and we must collectively find a way out of it.”
Nasheed said poor countries are trapped in a Sisyphus trap. They have to go into debt to prevent sea level rise and storms, only to see disasters exacerbated by climate change undo the improvements they have made. The country is forced to borrow again.
World Bank Group spokesman David Theiss said in a statement that the World Bank is aware that climate change is disproportionately impacting poor small island developing states. said the bank is “committed to comprehensive debt resolution that will bring real benefits to people in poorer countries, especially those with high debt vulnerabilities that lack the financial resources to meet the challenges they face.” Stated.
Understand the latest news on climate change
We are facing drought. Stories of Holland’s long struggle with excess water are written all over the marshes. Now that climate change has dried up water, the Dutch hope to blaze a trail to safety again – only this time by figuring out how to retain water rather than flush it out.
Debt debates at the IMF and World Bank meetings came as diplomats from nearly 200 nations geared up for global climate change negotiations in November. Its UN conference in Sharm el-Sheikh, Egypt, will ask whether the wealthy countries most responsible for the carbon emissions driving climate change should compensate the poorer ones suffering the worst impacts. What is the focus?
Many developing countries and low-lying island states are calling for the creation of an international fund to compensate for the loss and damage caused by climate change. The United States, Europe, and other wealthy countries, which have historically emitted large amounts of greenhouse gases, have opposed the creation of such funds.
“Honestly, the most important thing we can do is stop and mitigate enough to prevent loss and damage,” John Kerry, the US special envoy for climate change, told The New York Times last month. “The next most important thing we can do is help people adapt to the damage that is already there. And we have limits, you know.” To, no — the governments of the world told me they have trillions of dollars.
Nasheed said he believed a focus on debt swaps would avoid controversy surrounding the creation of a new international fund for reparations. He also mentioned no.
Reducing national debt by 30% and investing the money in projects like improving water systems and protecting mangrove forests that protect coastlines from hurricanes “will have a big impact,” Nasheed said. .
A spokesman for the V20, a coalition of finance ministers representing vulnerable countries, declined to comment but confirmed countries were discussing suspending debt service payments until banks deal with climate change.
IMF Executive Director Kristalina Georgieva said last year that such debt swaps could help developing countries deal with climate change, working with the World Bank at the United Nations climate conference in Egypt. He promised to “move forward with that option.”
According to the World Bank, 58% of the world’s poorest countries are at risk orbad debtAt the same time, the need for loss and damage in vulnerable countries is projected in one study. $290 billion to $580 billion annually by 2030.