At the center of the G20 discussions in Brazil, one of the most vital topics is the pressing issue of financing for emerging countries. In this context, Finance Minister Fernando Haddad joined in the G20 Finance Track meeting on Thursday (14) in Brasilia.
He pointed out that many countries are heavily indebted, limiting investment in essential sectors and, within the current scenario, the fight against hunger and climate change. One of the axes of Brazil's presidency of the G20 is the need for reforms for a more equitable distribution of global resources, with a view to facilitating access to favorable financing for emerging countries. In this regard, Minister Haddad urged the group's member countries to work together to boost global cooperation.
The minister also urged world leaders to examine the global debt resolution system and to make the process more results-oriented. He contended that G20 members can work effectively together to improve financial flows to the countries that need them the most, thereby stimulating long-term growth, social inclusion, and development.
Read the full speech
Dear deputies and delegates,
I want to start by greeting all the vice ministers and delegates present here today. Welcome to Brazil. I hope to meet you many times throughout 2024. We have a long way to go until the summit in November next year. I wish everyone an excellent working journey in our country. Whenever you arrive in Brazil, know that you are a very esteemed guest. The presence of each one of you here is a source of pride for our country.
Yesterday, you had the chance to hear the Brazilian priorities for the G20 directly from President Lula. The fight against hunger and inequality; sustainable development and energy transition; and the reform of global governance – this is the agenda that Brazil would like to advance in the G20.
We know it is an ambitious agenda. And we also know that advancing it in challenging circumstances like those we are facing now will not be easy. In my speech in Marrakesh, I said the world is in a polycrisis. The environmental catastrophe is knocking on our door. Geopolitical fragmentation is increasing. Progress toward eradicating hunger and extreme poverty have stalled since the pandemic. Global wealth and income inequality have reached unacceptable levels. Financial and monetary conditions are tighter, nobody knows exactly for how much longer. Rising debt is a concern around the world. Several countries are already in debt distress, while we continue struggling to devise a global debt resolution system that works with the speed and nimbleness it should. Our multilateral banks and international organizations are not fully equipped to meet the challenges ahead of us.
Brazil approaches its G20 presidency with optimism, but also with a sense of realism and pragmatism. We know that the G20 is a results-oriented, member-led forum. In the finance track, we value the inputs of co-chairs and the legacies of previous presidencies. We are not building anything from scratch or reinventing the wheel, and we pledge to work closely with members and partner organizations. I want to take this opportunity to heartfully thank India for the very generous support they provided to us in the transition to the Brazilian presidency. Together with South Africa, I am sure this troika will leave an important legacy for G20 works, definitively creating space for long-lasting Global South priorities within the international financial agenda.
To translate the ambitious goals of fighting hunger and inequality, promoting sustainable development, and improving global governance into concrete actions, we count on the work and dedication of all members. It is here, at the deputies’ and delegates’ level, in each working group and task force, that the real work of building a better and fairer world takes shape. I have full confidence in my deputy, Ambassador Tatiana Rosito, and her team to expertly guide the works of the Finance Trak with the sense of pragmatism - but also the political ambition - that should become the hallmarks of the Brazilian presidency.
Ladies and Gentlemen, dear Deputies and Delegates,
Here I do not have the time for a deep dive into each of the different workstreams of the Finance Track. However, I would like to touch on a few specific issues that are particularly dear to the Brazilian presidency.
Regarding the Framework Working Group, we believe inequality and distributional impacts should be fully integrated in the discussion of macroeconomic policies, as envisaged by G20’s commitment towards strong, sustainable, inclusive and balanced growth (SSBIG). As several countries adopt energy transition policies, we must be mindful of their global and national distributional impacts and socioeconomic consequences. In a nutshell, we need systemic solutions that put social considerations at the center of the climate change debate. In addition, countries need to increase fiscal space to support quality public investments that promote structural transformations necessary to combat inequality and boost a fair global energy transition. Here we would like to spark a conversation about strategies for crowding in investments to accelerate sustainable development plans, such as Brazil`s own ecological transformation plan.
The International Financial Architecture Working Group agenda includes several relevant topics. We are particularly concerned with the strengthening of Multilateral Development Banks so that they can become Bigger, Better, and more Effective. We will build on the work done by the Indian, the Indonesian and the Italian presidency and contribute to the ongoing global dialogue about Multilateral Development Banks' strategy and governance evolution. Securing a true Global Financial Safety Net depends on new concessional flows but also on fulfilling the long standing commitments of the membership of the Bretton Woods Institutions with regard to the representation of Emerging Markets and Developing Economies. In addition, we also want to address the debt burden of low and middle-income countries in a structural and preventive way, giving space for indebted countries to set the agenda as well.
The Sustainable Finance Working Group agenda is of great relevance for Brazil. We see the work to be done here in 2024 as a bridge to the COP in Belém in 2025. Brazil is beginning a cycle of even greater protagonism in terms of climate financing. We want to improve the efficiency of financial flows toward countries that most need it to protect strategic environmental assets and meet their decarbonization targets fairly and equitably. For that reason, we need to carefully review the operation of the main existing climate funds, as well as continue discussions on the regulatory environment that will allow massive flows of resources to the Global South.
I am particularly optimistic about the infrastructure Working Group agenda. As you know, we have been working side by side with our Australian co-chairs for several years in this group. During our presidency, we set up an agenda based on four priorities. First, the financing of climate-resilient infrastructure. Second, infrastructure services and poverty reduction policies. Third, mitigation of exchange rate risks in the financing of infrastructure projects. And fourth, strategies for building cross-border infrastructure. This is an example of what we deem as an ambitious but realistic agenda, whose deliverables can have a real impact.
The Joint Finance and Health Task Force will continue to improve the assessment of global health, with particular attention to social and economic vulnerabilities and risks arising from pandemics. At the same time, the Task Force should take in new promising ideas, such as “debt-for-health” swapping arrangements. We see this as an avenue to address debt vulnerabilities in low-income countries and mobilize resources for investment in their healthcare systems. In addition, the Brazilian presidency would like to shed some light on social and environmental determinants of health outcomes in vulnerable groups.
Last but not least, we will seek to expand the International Taxation Agenda above and beyond ongoing BEPS negotiations at the OECD. I understand the Membership is invested in these negotiations, and I want to reassure you that our final intention is to strengthen the two-pillar solution and reach a satisfactory result for all. At the same time, we are hearing increasingly louder voices from the Global South and civil society, demanding a more ambitious international taxation agenda, including wealth taxation, enhanced transparency, and other solutions to make the world's richest pay their fair share in taxes. Coming from a process of tax reform in Brazil, I feel particularly strongly about the necessity of enhanced global cooperation in this area.
Tomorrow, you will hear from my colleague Roberto Campos Neto, the Governor of the Brazilian Central Bank. I do not want to preempt his speech, so I will leave it for him to comment on the financial sector issues and the global partnership for financial inclusion agenda. Let me just remark that I see great potential for progress in financial inclusion, crypto assets, and cross-border payments.
Ladies and Gentlemen, Deputies and Delegates,
I have been saying that we should not fear globalization. Coming from the Global South, I honestly understand why so many around the world are now sceptical of globalization, multilateralism, and international cooperation at large. After the high hopes of the 1990s and 2000s leading to the 2008 financial crisis, it became clear that the kind of globalization that was indeed happening, based only on market efficiency and the drive for higher profits, was not serving the majority of humanity, in addition to accelerating climate change.
The solution is not less globalization and economic fragmentation, however. Instead, we have to build a new globalization, based on socio-environmental concerns — a new globalization that works for everyone and helps us accelerate sustainable development. Now more than ever, building walls and creating isolated islands of prosperity is impractical, not to mention immoral. We have to face our many contemporary challenges together and strive to create a just world and a sustainable planet. The two task forces proposed by President Lula, on fighting hunger and combatting climate change, are a call for a united G20, aligning resources at the level of ambition demanded by our leaders. This is our chance to reconnect the global South and the Global North in a positive agenda of social, economic and ecological transformation.
I believe the G20 has a pivotal role to play in designing and giving political impulse to this new socio-environmental globalization agenda. Your work will be fundamental to giving renewed impulse to global cooperation in this time of crisis. Count on the Brazilian G20 Presidency to facilitate your work and help build the global consensus we need.
Thank you very much.