Economy

New global financial system must be designed after coronavirus pandemic – Ofori-Atta

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Finance Minister, Ken Ofori-Atta, has called for the formulation of a new financial system that will rebuild global growth and institute a new global public good after the coronavirus pandemic.

The Minister made the remark in his introductory speech when he chaired the Development Committee meeting of the Spring Meetings on Friday.

Mr Ofori-Atta was one of three speakers at the spring meetings, the other two being President of World Bank, David Malpass and Managing Director of IMF, Kristalina Georgieva.

“There are 3 fundamental buckets that need to be addressed: to recogniwe that this economic crisis will last much longer and have a greater impact on the development world, secondly that we must quickly address the issues of economic revival and global supply chains and our health care systems. And this will require additional funds. And thirdly, we must design a new global financial architecture in order to rebuild global growth and institute a new global public good,” Ken Ofori-Atta stated.

Below is a full transcript of his introductory speech.

Spring Meetings 2020

These are extraordinary times which require extraordinary measures. Let me thank the IMF and the World Bank under the leadership of Kristalina and David with their incredible energy, proactiveness and creativity for tackling the Corona Virus Pandemic. We should also congratulate the G20 for prescribing a solution to the debt crisis looming amongst the IDA countries. Unfortunately, this will not suffice to avert countries in the emerging markets in Africa from going into an insolvency crisis and receding into a depression. We have to solve the liquidity crisis, we have to solve the fresh capital crisis, we have to solve the health crisis. And we have to work fast.

I got the chills last night when I heard the EU President apologizing to Italy for the belated support of 500 Billion Euros. The consequences have been  about 170 000 cases, the loss of  22 000 lives and an economic intervention of 750 million Euros by the Italian Central Bank, ie. 30% of Italy’s GDP. Because it reminded me of the 1918 Spanish flu which wiped out 650 000 lives in the US and x in the Gold Coast. The World’s reaction was slow. Even neighbors did not care for each other leaving in the wake of it, a spiritual stupor which haunted everyone’s humanity. 102  years later, the EU Commissioner has to remind us that ‘we must protect each other to protect ourselves’.

I chaired the G24 meetings on Tuesday this week,  and co-chaired Africa finance ministers meetings in the past few months and the outcry is the same; the need for liquidity, fiscal space,  fresh capital, debt relief, the need for stronger health systems, the need to work with the rating agencies and private creditors.

There are 3 fundamental buckets that need to be addressed; to recognize that this economic crisis will last much longer and have a greater impact on the development world, secondly that we must quickly address the issues of economic revival and global supply chains and our health care systems. And this will require additional funds. And thirdly, we must design a new global financial architecture in order to rebuild global growth and institute a new global public good.

All of these need to be soberly considered because a large part of humanity is at stake. Where are the Monets who created the EU? Where are the Luther Kings who fought for civil rights?  Where are the Ghandis who brought Empire to a standstill?  Where are the Eleanor Roosevelts who led in the creation of world bodies post WW2? Where are the Nkrumahs who begun the movement for political emancipation and where are the leaders who built the Bretton Woods architecture? I submit that they are here in spirit today, and are on this call but forlorn and melancholic, wondering how many of us will step up to be counted, and encouraging us with Ibsen’s words; ‘the strongest man in the world is he who stands most alone’.

So David, Kristalina and fellow Governors, I propose we establish an inclusive team of willing collaborators and private sector from this meeting to create this new era that will make our future greater than the past.

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