UN chief for sweeping reform of ‘biased’ financial system

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The UN Secretary-General Antonio Guterres called on Monday for sweeping reform of the international financial system to allow for low-income countries vulnerable to climate calamities to receive adequate funding from richer nations.

Addressing a conference in Geneva on rebuilding efforts in the wake of devastating floods in Pakistan, Guterres said the international financial system was skewed to benefit wealthy countries and should be reformed to ensure a more equitable distribution of resources. “It is very clear that the present system is biased,” he said in a strongly-worded critique of what he called a “morally corrupt global financial system”.

“The system was conceived by a group of rich countries and naturally it basically benefits rich countries.”

“We need a new debt architecture and we need to make sure that debt relief is effectively provided by the system even to middle-income countries that are on the verge of very difficult, very dramatic situations including suspending payments,” Guterres added. Voicing frustration at the inaction of global leaders and scant investment to combat climate emergencies, Guterres called for the vulnerability of countries to be taken into account when major financial institutions distribute below-market-rate financing. “We need to redesign our financial system in order to be able to take into account vulnerability and not only GDP when decisions are made about concessional funding to countries around the world,” he said. Antonio Guterres stressed that it was a time for the international community to reciprocate with generosity shown by the people of Pakistan by very generously hosting millions of Afghan refugees for decades. Recollecting his past experiences, he said Pakistan had witnessed difficult moments as it was badly affected by natural catastrophe like earthquakes and floods.

Guterres further hoped that the global community would support Pakistan in rebuilding and reconstructing efforts as the country .