Finance Minister Nirmala Sitharaman on Thursday made a strong pitch for a multilateral initiative to support for low-income and middle-income countries in meeting pandemic and climate change risks, backed by an independent and transparent governance structure.
Speaking at the first G20 Finance Ministers and Central Bank governors’ meeting this year, Ms. Sitharaman said a common pool of funds, with increased funding from multilateral development banks, must be made available for global public goods. The key, she said, would be to ensure that low-income countries are neither denied basic simple needs like PPE kits, nor should they be excluded from more expensive or complicated technological solutions.
Invoking former UN Secretary General Kofi Annan’s observation that global public goods is the one missing term in all parleys about global co-operation, Ms. Sitharaman said that the criticality of such goods has now been recognised in the context of the health and climate crisis facing the world.
“The crisis for mobilising resources is acute in low-income and middle-income countries as their own fiscal space for generating that kind of increased spending on healthcare and climate change is very limited,” she said. India, she noted, had put aside $29 billion for a mission to bolster healthcare infrastructure and providing insurance to the poor and the lower-income groups in the country through the pandemic.
“This pandemic actually has helped us bridge the gap between the resources and the requirement on the ground,” the Minister said, adding that fresh measures to help low-income countries must address the two lessons learnt from COVID-19 – ‘the preparedness was not adequate, the money we could spend was also not adequate’.
“Therefore, although all of us had the hearts in the right place, our hands were tied because we weren’t effectively prepared for this kind of a crisis. So I would look for new ways of funding and recognise that all of us will have to contribute towards the global public good,” she said in a discussion on strengthening global health architecture with United States’ Treasury Secretary Janet Yellen and World Bank president David Malpass.
Calling for greater official development assistance, grants and multilateral development bank finance for low-income nations, she said private philanthropists and markets as well as private investors can also chip in. If modest investments are not made now, the future costs would be much higher, the Minister pointed out.
“There should be a basic checklist on what is necessary for all countries that is ticked off. Even better would be to make sure that the financing modalities are based on principles of sustainability and viability and that independent governance takes over the moment these funds are mobilised in the kitty, to getting and distributing vaccines or meet the need of the hour,” she said.
“We need an independent governance mechanism even if (this is) located in multilateral institutions and keep principles of inclusivity, transparency and equity in mind,” Ms. Sitharaman concluded.