Direct 1% of world’s wealth to Global South to create inclusive economy, G20 leaders urged
Ahead of November's G20 Summit in Indonesia, the world's leaders are urged to rebalance capital flows in favour of the Global South to help pandemic recovery and meet UN SDGs.
At least 1% of global wealth – more than $500tn – should be directed towards Global South countries to help them recover from the Covid-19 pandemic and meet the 2030 UN Sustainable Development Goals, the world’s heads of state have been told.
Last week, the Global South Impact Community, a network of leaders from public, private and philanthropic institutions, primarily from developing countries, published a statement ahead of the G20 annual summit in Bali, Indonesia, in November.
The statement called for the world’s leaders to create a new, more inclusive global economic model which removes the imbalance between developed and developing countries.
Bambang Brodjonegoro, one of the members of the Global South Impact Community, a former senior minister in the Indonesian government and co-chair of the G20’s think tank, the T20, said: “There is an urgent shift that is needed to build for a green, resilient and inclusive global economic system post the pandemic.
There is an urgent shift that is needed to build for a green, resilient and inclusive global economic system
“The recommendations put forth by the Global South Impact Community map the critical first steps to address the global imbalance of power when it comes to the Global North and the Global South.”
The 20-strong group, which was brought together by The Rockefeller Foundation and the International Venture Philanthropy Center (IVPC), pointed out in its statement that the Global South represented more than 80% of the world’s population and was being disproportionately affected by climate change and global health crises, yet it remained marginalised within the world’s multilateral institutions, financial flows and commercial relationships.
Additionally, pointed out the group, financial resources – across foreign investment, trade and development aid – primarily flowed from developing to developed economies.
To counterbalance this asymmetrical flow of resources, the Global South Impact Community called upon the G20 for “the leverage of at least 1% of total global wealth (estimated at $510tn) for impactful and inclusive deployment to the Global South through the creation of more favourable conditions for financial flows, including addressing the inefficiencies caused by poorly functioning or non-existent institutions and improving understanding of real investment risks”.
‘Large-scale catalytic capital’
Among the detailed recommendations were that pooled funds should be created by philanthropists and private sector investors to catalyse investment, and that blended finance (used in this context to mean using capital from public or philanthropic sources to increase private sector investment) should be promoted.
- Read more about how blended finance can be used across the Asia-Pacific in our feature: From billions to trillions: finding the funding to address the world’s biggest challenges
The statement was presented to G20 leaders at the Think20 Summit, which took place in Bali last week, by representatives of the Asian Venture Philanthropy Network, Bambang Brodjonegoro and Deepali Khanna, vice president of the Asia office at the Rockefeller Foundation.
Khanna said: “We urge G20 leaders to take immediate action towards the Global South Impact Community's statement and enable the deployment of large-scale catalytic capital to tackle the SDGs. We at The Rockefeller Foundation in alignment to the Global South Impact Community strongly believe that innovative financing will help developing countries unlock transformative change to make opportunity universal and sustainable for communities to flourish.”
Members of the Global South Impact Community include representatives of the IVPC's philanthropic networks – EVPA, AVPN, AVPA and LatImpacto. Notable names include CK Mishra, former secretary of the ministry of environment, forest and climate change of the Indian government; Clare Woodcraft, fellow at the Centre for Strategic Philanthropy at Cambridge Judge Business School; Princess Nouf bint Mohammed bin Abdullah Al Saud, CEO of the King Khalid Foundation and Uche Orji, CEO of the Nigeria Sovereign Investment Authority.
Header image: Tristan Ace of AVPN, Bambang Brodjonegoro and Deepali Khanna at last week’s Think20 Summit in Bali