Deputy Prime Minister and Minister of Finance, Canada
On behalf of Antigua and Barbuda, The Bahamas, Barbados, Belize, Canada, Dominica, Grenada, Guyana, Ireland, Jamaica, St. Kitts and Nevis, St. Lucia, and St. Vincent and the Grenadines
108th Meeting of the Development Committee
October 13, 2023
Our constituency wishes to express our heartfelt sympathy and deepest condolences to the people of Morocco and Libya in the aftermath of the terrible earthquake and flood of September 2023.
Following Hamas' barbaric terrorist attacks against State of Israel, Canada is unequivocal in our condemnation of Hamas. We reiterate our steadfast support for the State of Israel and its right to defend itself, which is in line with international law. We also call for the immediate release of those being held hostage, and we demand that they be treated in accordance with international law.
The most pressing threat to the global economy remains Russia's illegal full-scale invasion of Ukraine. In addition to the direct and deplorable impacts on millions of Ukrainians, Russia's invasion is compounding macroeconomic challenges around the world, with particularly damaging impacts for the world's most vulnerable, including exacerbating poverty, income inequality, and food insecurity. Canada and our constituency partners are firmly committed to supporting the brave people of Ukraine and their government in their fight for their democracy and sovereignty.
We commend the Bank's swift and comprehensive response and mobilization of nearly US$38 billion to help Ukraine continue to provide essential services, maintain critical infrastructure, and respond to humanitarian needs. Given the scale of Ukraine's financing needs, the Bank must demonstrate further ambition and play a leading role in mobilizing private capital for Ukraine's reconstruction, including by mitigating risk and promoting investor confidence.
We are deeply concerned by recent reversals in development gains and increases in extreme poverty. Moreover, low- and middle-income countries are grappling with acute fiscal and cost-of-living challenges marked by debt distress and significant barriers to food, water, and energy security. The Bank has heeded calls over the last year to improve its methods for responding to these challenges. Canada and our constituency partners commend the Bank's board, management, and staff for their roles in advancing important changes to its mission and operating and financial models.
Climate change and biodiversity loss, which have disproportionate impacts on Indigenous Peoples, women and girls, and youth, require urgent action to protect humanity and the global economy. The Bank has made progress in aligning financing operations with the Paris Agreement, and we encourage further ambitious investments to support member countries in transitioning to clean, resilient, and nature-positive development, including by enhancing and simplifying Small States' access to finance.
Our clean economies will be stronger when we work together. Canada proud to announce a contribution of C$5 million to the Partnership for Resilient and Inclusive Supply-chain Enhancement (RISE), initiated by Japan and supported by the World Bank, which will help accelerate clean economic growth in low- and middle-income countries and strengthen our shared clean energy and critical minerals supply chains.
Canada is also proud to announce that it will offer Climate Resilient Debt Clauses (CRDCs) in all new sovereign lending moving forward. We call on all creditors to do the same in their new sovereign lending. To enhance this new tool for countries most vulnerable to climate change and the natural disasters it causes, we ask the Bank to conduct further analysis on the benefits of applying CRDCs to existing loans, rather than limiting them to new loans.
Looking ahead to COP28, we encourage the Bank to be ready to mobilize support for the international climate finance architecture, with a particular concern to the needs of Small Islands Developing States and Least Developed Countries. Furthermore, we call on the Bank to align its funding with the Kunming-Montreal Global Biodiversity Framework (GBF) and use the new GBF Fund to meet our collective goal to deliver at least US$200 billion in annual international biodiversity funding by 2030.
We commend the Bank's response to the G20 Independent Review of Multilateral Development Banks' (MDBs) Capital Adequacy Frameworks, including reforms adopted at the Spring Meetings. However, we stress the importance of optimizing the balance sheets of both the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA). We believe the Bank could do more to deploy its capital more effectively by incorporating a share of callable capital in the Bank's capital adequacy framework and assessing options to further reduce the equity-to-loan ratio. We support the Bank's ongoing progress on innovative ways to bolster its lending capacity, such as by raising hybrid capital and through the proposed Portfolio Guarantee Platform. The Multilateral Investment Guarantee Agency (MIGA) has the potential to unlock lending headroom at the IBRD and other MDBs, and we call on the institution to develop new guarantee instruments for this purpose.
Furthermore, we call on the IFC to leverage use of the One WBG approach to leverage private capital mobilization, and we fully support the IFC's work to use private capital for development, including through the new Private Sector Investment Lab and by developing a warehousing and securitization platform to transform MDB loans into investable securities for institutional investors.
To accelerate private investment in developing countries, we call for transforming the Global Emerging Markets Risk Database (GEMs) Consortium into a standalone entity as quickly as is feasible, which would allow investors to better assess risk with usable, relevant, and widely available credit event data.
Finally, we welcome the progress to date in developing principles and a framework to guide the allocation of concessional resources, with more work needed post-Marrakech. We emphasize that the framework should incorporate well-targeted financial and non-financial incentives for client countries, including Small States and vulnerable middle-income countries.
Canada and our constituency partners are prepared to continue the hard work of evolving the World Bank to drive progress on the world's most pressing challenges.
