PM Shehbaz to Attend Paris Summit, Spearheading Global Financial Reform Efforts.

ISLAMABAD: On Tuesday, the Ministry of Foreign Affairs confirmed that Prime Minister Shehbaz Sharif will undertake an official visit to France this week.
At the gracious invitation of French President Emmanuel Macron, PM Shehbaz is scheduled to travel to Paris to actively participate in the highly anticipated New Global Financing Pact Summit, taking place from June 22 to June 23.
Prime Minister’s Paris Visit: A Crucial Step Towards Reshaping Global Financing
Macron emphasized that the summit aims to establish a “new consensus” in addressing the interconnected global challenges of poverty alleviation, mitigating planet-heating emissions, and safeguarding nature.
A broad spectrum of ideas will be deliberated during the summit, ranging from potential taxation on shipping, fossil fuels, or financial transactions to groundbreaking innovations in lending practices and a fundamental reevaluation of renowned institutions like the International Monetary Fund (IMF) and the World Bank.
The two-day summit, commencing on Thursday, will convene around 50 heads of state and government, providing an extraordinary platform for sharing visionary ideas ahead of a series of momentous economic and climate conferences in the coming months.
One of the summit’s focal points, as highlighted by the French presidency, is to impart “political impetus” to the notion of implementing an international carbon emissions tax for the shipping industry. Encouragement lies in the prospect of a significant breakthrough during the International Maritime Organization meeting later in June.
With dwindling trust due to unfulfilled climate financing commitments from wealthier nations, developing countries seek concrete progress.
The V20 coalition, comprising 58 member nations at the forefront of climate-related challenges, insists on reshaping the global financial system to align with ambitious climate targets by 2030.
Sarah Jane Ahmed, V20’s global lead and financial adviser, stressed the importance of concrete timelines: “While discussing the international financial architecture is valuable, we need to establish clear timelines to avoid higher costs and steeper trade-offs if we postpone actions until the 2030s.”
Pakistan perceives the summit as an opportune moment for leaders to delve into the contours of a novel global framework capable of effectively addressing the financing needs of sustainable development, environmental preservation, energy transition, and climate change.
“The Summit serves as a stepping stone for extensive reforms in the international financial system, guiding us toward a more equitable partnership between the North and the South. As a leading stakeholder in global discourse, a prominent member of the G-77 and China, and one of the largest developing countries severely affected by climate change, Pakistan will contribute significantly to the debates,” stated the foreign ministry.
The prime minister will present Pakistan’s perspective and offer proposals for the reform of international financial institutions, climate finance, green infrastructure, achieving the Sustainable Development Goals (SDGs), and debt-related solutions. Additionally, PM Shehbaz is scheduled to engage in bilateral meetings with other world leaders on the sidelines of the summit.
Noteworthy attendees advocating for the same cause in Paris include Kenyan President William Ruto, Ghana’s President Nana Akufo-Addo, and Barbados Prime Minister Mia Mottley, who has emerged as a powerful advocate for reform and will deliver an impactful speech during the summit’s opening session on Thursday.
The summit will also see the participation of influential figures such as Chinese Premier Li Qiang, US Treasury Secretary Janet Yellen, and European Commission head Ursula von der Leyen.
Ajay Banga, in his first international gathering since assuming leadership at the World Bank, is expected to grace the event, pledging to embrace transformative change.
While the number of leaders from wealthier nations in attendance may be fewer, Friederike Roder of Global Citizen expressed concerns that the conference might fall short of expectations for a unified display of support. Roder emphasized the necessity for major economies to come together and reach a consensus on critical reforms.
“Failed”
In recent years, economies have faced successive shocks, including the COVID-19 pandemic, Russia’s invasion of Ukraine, soaring inflation rates, and the escalating costs of climate-induced natural disasters.
United Nations Secretary-General Antonio Guterres characterized the pandemic and its aftermath as a “stress test” for a financial system established nearly eight decades ago, deeming it largely inadequate. Guterres further highlighted that 52 developing countries find themselves in, or on the verge of, debt distress.
As part of its strategy, the World Bank intends to boost its lending capacity by $50 billion over a ten-year period. Furthermore, the institution has called for substantial reforms to redirect trillions of dollars in detrimental and unnecessary subsidies from industries such as fossil fuels, agriculture, and fishing towards initiatives addressing climate change and biodiversity.
Currently, the world is far from achieving its objectives of limiting global warming to 1.5 degrees Celsius above pre-industrial levels, placing nature, human societies, and the global economy at significant risk.
According to a committee of UN experts, countries other than China will need to allocate over $2 trillion annually by 2030 to foster development and effectively respond to the climate and biodiversity crises.
Addressing the “ambition gap,” Roder emphasized the importance of wealthier nations fulfilling their existing commitments, such as the long-awaited pledge of providing $100 billion annually by 2020 to assist developing nations in reducing emissions and enhancing climate resilience. Calls for increasing the available funding, potentially utilizing a significant portion of the International Monetary Fund’s liquidity-enhancing “special drawing rights,” have emerged from emerging economies, along with demands for a new lending strategy.
Barbados has put forth the proposal of a disaster clause that would allow for a temporary halt in loan repayments for two years in the aftermath of climate-related disasters or pandemics.
The scale of existing debts also stands as a critical point of discussion. This issue will draw attention to China, which has emerged as a substantial lender to African nations but has exhibited reluctance in participating in a common framework for debt restructuring.
The Paris summit provides an invaluable opportunity to bring these multifaceted issues to the forefront. As Louis-Nicolas Jandeaux of Oxfam emphasized, the summit has the potential to elevate these topics from their niche status. However, he also acknowledged a disparity between the initial ambitions outlined for the summit and the current reality.