Speech by minister Kaag at Development Committee World Bank Group
Speech by the Minister for Foreign Trade and Development Cooperation, Sigrid Kaag, at the Development Committee of the World Bank Group.
This is Sigrid Kaag, Minister for Foreign Trade and Development Cooperation of the Netherlands.
I thank the Bank for its swift, decisive and robust response to COVID-19. We must address this crisis jointly and work towards an inclusive and sustainable recovery, especially in Africa. I have three points.
On the debt initiative
We thank all the relevant parties – Paris Club, World Bank, IMF, G20 – for their work on the debt moratorium initiative for IDA countries, which we welcome. The agreement reached this week by the G20 and Paris Club marks a historic moment of coordination amongst creditors. Recognizing the scale of the health crisis, we call on all bilateral and private creditors to also participate in this initiative on comparable terms. While we acknowledge the great efforts the World Bank and other MDBs are already making in this crisis, we also ask them to explore options for the suspension of debt service payment over the suspension period, while maintaining their current rating and low cost of funding.
On the emergency response
The Bank needs to focus on where people are most vulnerable, such as in fragile and conflict-affected areas, especially in refugee camps, and with particular attention for gender. I would like to highlight a few other dimensions that merit the Bank’s attention.
Education should not be sidelined. So many schools have closed their doors. Now is the time to invest in innovative financing vehicles like IFFEd, the International Finance Facility for Education, that could quickly make more education funding available. We should not stop investing in people’s knowledge and skills.
Addressing other essential health care needs of people will prevent enormous loss and suffering. Psychosocial support will contribute to the resilience of people affected by this crisis.
For many in the developing world, protection of jobs, social safety nets and cash transfers will be indispensable for facing COVID-19’s fallout.
Urgent action is needed to prevent hunger and a food price crisis by supporting smallholder farmers, averting the breakdown of food supply chains to cities and aligning governments against protectionism in the trade of major food items.
All these efforts depend on bringing together reach, expertise and coordination. The Bank has a central role to play, together with the World Health Organization, all bilateral and multilateral partners, and also with civil society.
On building back better
When it comes to managing the expected economic shockwaves, we fully stand behind the Bank and IMF in their support to countries in building economic, financial and crisis resilience. As we are preparing the largest economic stimulus packages since the adoption of the SDGs and the Paris Agreement, we must apply the right priorities and criteria – so we can have an economic recovery powered by low carbon infrastructure, green jobs and resilient livelihoods.
This means renewable energy, nature-based solutions, and resilient water and food systems. It means no finance for coal and upstream oil and gas. And it means helping countries to end fossil fuel subsidies, restructure coal mining regions, and move beyond economic dependency on oil and gas.
The Bank should lead the way by promoting investments in an economic recovery that is sustainable, inclusive and resilient – not by promoting a single-minded focus on supply-side reforms, important as they can be. The more we seem off track on the SDGs, the more they matter: we have to remain people-focused and leave no one behind.