MONROVIA – There has been much ado about whether or not the global financial system, spearheaded by the United States and its Western allies, has been of much help to the developing world, particularly Africa. Thoughts are mixed on the debate, with some pointing out that the Bretton Wood System has flatly failed in living up to the fundamental objectives of its founding. As the West’s adversaries rise to upset the global power dynamics, it seems ideas are now ramped up for an inside-out scrutiny that will bring about needed reforms and woo back the highly resource-rich Africa on the table. A group of African fiscal and monetary officials was yesterday brought together to share their perspectives on what has gone wrong since the last 78 years and what can be done. Liberia’s Finance Minister was one of the panelists and quietly predictably he sounded critical, as The Analyst reports.
Finance and Development Planning Minister Samuel D. Tweah, Jr., has been providing his insight on how Bretton Woods System and other global financial institutions invariably referred as multilateral development banks can be reformed.
On the sideline of this year’s Spring Meetings of the World Bank and IMF, a group of African finance ministers and a private sector leader shared their perspectives on what they would like to see from the reform of the World Bank and MDBs.
Panelists who addressed the topic, “Adapting Multilateral Development Banks (MDBs) to Global Challenges: Perspectives of African Leaders on Reform,” Monday, April 10, 2023, included the Liberian Minister; Kenneth Ofori-Atta, Minister for Finance and Economic Planning, Republic of Ghana; Njuguna Ndung’u, Cabinet Secretary, National Treasury & Economic Planning, Republic of Kenya; Vera Esperança dos Santos Daves De Sousa, Minister of Finance, Angola, amongst others.
Asked by the Moderator, Vera Songwe, Non-resident Fellow, Center for Global Development on the issue of absorptive capacity, what multilateral groups could do in terms of instruments, and the challenges to manage climate change, Minister Tweah first provided the audience with the historical context of he called multilateral fundamentalism.
Tweah then drew the attention of the panel and its sizable audience to the fact that in the last 75 years incessant arguments were made for multilateral reforms but these augments fell on deaf ears. He wondered how in the next thirty years anyone would listen to the urge for strategic reforms within the multilateral development banking system when every effort had gone unheeded for over 70 years.
He said the International Monetary Fund and the World Bank were established because the West and its allies did not want another Adolph Hitler or another world war, and there was a strong desire to spread democracy and human rights across the world.
Minister Tweah further noted that after 44 years, the Berlin Wall fell in 1989, and within that 44 years China, which had the last reserve of the communist world, was able to pull over 600 million of its people out of poverty. Conversely and unfortunately, during that same 44 year period, Tweah said, Africa pushed millions of people into poverty.
He also recalled that the global financial system gave South Korea $2.5billion, which the World Bank also gave to many Western and Asian countries in 1950—a funding he said enabled South Korea to become an economic miracle.
“The fact is Africa has never been treated as a strategic geostrategic interest in the geo-multilateral system,” he lamented.
Mr. Tweah also said when it comes to the issue of capacity to manage huge infrastructure, Africa is disadvantaged, which is why the IMF and IDA were formed to deal with large infrastructure projects.
“Africa needs $2.4 trillion for climate change finance between 2020 and 2030 and $100 billion to close its infrastructure gaps,” he stressed.
He said it has to be presented to the G7 and the multilateral community that the reforms being sought within the Multilateral Development Banks is not just a cherry-picking, and sporadic small pieces of things here and there but that “we have to go the 1945 to see that the Cold War which succeeded with the fall of the Soviet Union came at the expense of Africa. That’s what the G7 has to remember.
“We, Africa, paid the price. Between 1945 and now, the West destroyed the Climate and Africa is needing $2.5 trillion to restore itself.”
He said when that context is stated in that way, the better the prospects for reforms and all that will achieve.
Minister Tweah asserted that except that was done, when the entire multilateral financial system is subjected to rigorous reform it would only be tactical gains “as we have had for a long time now”.
He said all that is needed to achieve genuine reforms within the MDBs and improve Africa’s infrastructure gap is a whole geo-economic and geostrategic approach.
Minister Tweah also used the occasion to make a case for Liberia’s green economy through the huge deposit of its forest reserves and said despite the green nature of the Liberian economy, it receives no support from the international community but the narrative could change with the recent signing of a pact with the government of the United Arab Emirates (UAE) with respect with a $50 bn climate fund to promote green economy globally.
“Liberia is a green economy but it receives no support from the international community for its greenness. How can we be serious?
“So the other day the President encouraged us to sign a $50bn pact with the UAE. UAE is establishing a $50 bn fund. So they were saying, you are green, we want to do our development. We want to leverage on your greenness, and so we want to pipeline some projects, so we could give you $500m to $1bn to do your infrastructure because the West is already developed and maybe UAE wants to go to the West.
“So UAE may want to pollute and they could use our forest to pollute. And so these are what are happening in the Paris Conversation. There must be a broader look at it, and not these piecemeal discussions. There must be realistic discussion in these conversations, otherwise we will be coming back here all the time without solving the problem”, he said.