Finance in Common: Speakers call for new financial architecture to address the impact of global shocks on developing countries
Speakers at a research conference side event at the Finance in Common Summit (FiCS) 2022 in Abidjan, called for a new global financial architecture to tackle the impact of global shocks on developing countries. They said it should include innovative ways to unlock greater investments from the public and private sectors.
The third Finance in Common Summit, titled “Green and Just transition for a sustainable recovery,” is co-organized by the African Development Bank and the European Investment Bank. The three-day summit is taking place as the world grapples with the overlapping impacts of Covid-19, Russia’s invasion of Ukraine, climate change, inflation, and growing poverty, particularly in developing countries.
Participants also discussed the release of a new database which shows that the number of Public Development Banks and Development Financing Institutions has reached 522 + in 154 countries and economies. The database put the total assets of these institutions at $23 trillion
Rémy Rioux, chairman of the Finance in Common Initiative, said the summit was taking place at a “very special moment” of urgency and tension. He called on development finance institutions, governments, and the private sector to seize the moment to build momentum, consensus, trust, collaboration, and collaborative solutions. “This should involve a green and just energy transition, lifting more people out of poverty,” he stated.
He said it was important to kick off the summit with the research conference side event to hear from academics, policymakers, think tanks, “and all those willing to pay attention and help us best position and understand the role of the public development banks so that we can play the most useful role.”
European Investment Bank vice-president Ambroise Fayolle stated: “We see that the impact of Covid-19 continues, and the impact of the Russian invasion of Ukraine is also quite considerable. All these have created fresh economic problems, including global atmosphere inflation, increased poverty, and pressure on pension markets.”
He hoped that the development banks would reflect on how to improve things, learn from one another, and work more effectively as a group. “The database survey will enable us better maximize our influence,” Fayolle said.
The Institute of New Structural Economics at Peking University and the French Development Agency (AFD) have collaborated to build on the University’s pilot effort to “strengthen first-ever comprehensive database on PDBs and DFIs with rigorous criteria and methodologies,” according to Régis Marodon, Sustainable Finance Advisor at AFD.
“We hope that our pilot and persistent efforts to build the comprehensive database can promote original research on the rationales, operations, governance, and performance of PDBs and DFIs to enhance our understanding of such important public financial institutions and realize their full potentials,” Executive Deputy Dean of INSE, Jiajun Xu, said.
The session featured 18 research papers on weathering the storm, including the role of the African Public Development Banks in the recovery from Covid-19, green lending, policy-based finance that complies with the Paris Agreement, artificial intelligence, and channeling SDRs, among others.
The hybrid Finance in Common Summit 2022, which is online and in-person participation, is taking place in Abidjan, Côte d’Ivoire, from 18 to 20 October.