PARIS: The World Bank will ease financing for countries hit by natural disasters, it said on Thursday, as the International Monetary Fund announced it had hit its target of making $100 billion in special drawing rights available for vulnerable nations.

The two announcements were made at a gathering in Paris of some 40 leaders, including about a dozen from Africa, China’s prime minister and Brazil’s president, that aims give impetus to a new global finance agenda.

It aims to boost crisis financing for low-income states and ease their debt burdens, reform post-war financial systems and free up funds to tackle climate change by getting top-level consensus on how to promote a number of initiatives struggling in bodies like the G20, COP, IMF-World Bank and United Nations.

An announcement about Zambia’s debt was also expected later on Thursday after its creditors indicated this week a restructuring proposal was nearly ready after more than two years of negotiations.

“It is clear that the international financial architecture has failed in its mission to provide a global safety net for developing countries,” United Nations Secretary General Antonio Guterres said, calling the system outdated, dysfunctional and unjust.

Leaders are set to back a push for multilateral development banks like the World Bank to put more capital at risk to boost lending, according to a draft summit statement seen by Reuters.

In remarks to a panel on Thursday, new World Bank president Ajay Banga outlined a “toolkit”, including offering a pause in debt repayments, giving countries flexibility to redirect funds for emergency response, providing new types of insurance to help development projects and helping governments build advance-emergency systems.

“We need a robust and predictable financial safety net,” Ethiopian Prime Minister Abiy Ahmed told the conference, calling for a boost to below-market financing and more grants.

“African countries are facing an unprecedented funding sque­eze which have aggravated the vulnerabilities,” he said.

Published in Dawn, June 23rd, 2023