Accra, Friday April 17, 2020 – Ghana’s Finance Minister, Ken Ofori-Atta has called for a new global economic order to salvage the world from the ravages being wreck on the economies of developing countries and the world at large.
“Fellow Governors, I propose we establish an inclusive team of willing collaborators with the private sector from this meeting to create this new era that will make our future greater than the past. It is indeed a break the glass moment and we must seize it”.
Ken Ofori-Atta who is also the Chair of the IMF/World Bank Development Committee, said this when he chaired the 2020 Virtual Spring meeting of the Development Committee.
He proposed a three pronged approach to bring the world economy back to growth;
- A recognition that this economic crisis will last much longer and have a greater impact on the developing world;
- The need for additional capital to quickly address the issues of economic revival and global supply chains and health care systems, and;
- A new global financial architecture in order to rebuild global growth and institute a new global public good.
Ken Ofori-Atta also called for debt relief for Africa in his closing remarks to the gathering, saying that discussions on debt must be underpinned by transparency “so that no one abuses this opportunity”.
“Let us from here move rapidly to create an inclusive global forum to rebuild the International financial and economic architecture and a new ability to respond equitably and rapidly to such a catastrophe”, he stressed.
The President of the World Bank, David Malpass and the Managing Director of the IMF, Kristalina Georgieva also addressed the meeting. END
Below is the full text of Ken Ofori Atta’s opening and closing remarks.
Opening Remarks by Hon. Ken Ofori-Atta
Chairman, Development Committee of the World Bank and IMF
2020 Virtual Spring Meetings of the World Bank and IMF – 17th April 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. However, unless additional resources are found, things are going to be difficult.
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 and 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, we have to solve the debt crisis and we have to work fast.
I got the chills last night when I heard the EU Commission President apologizing to Italy for the belated support from Europe to use the £500 billion Europe Fund to confront the crisis. The consequences have been about 170,000 cases in Italy and the loss of about 22,000 lives, and their economic intervention of 750 million Euros by the Italian Central Bank, i.e. 30% of Italy’s GDP. The reason I got the chills is because it reminded me of the 1918 Spanish flu which wiped out some 650,000 lives in the US and over 100,000 in the then 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 meeting on Tuesday this week, and co-chaired a number of Africa Finance Ministers meetings in the past few months, and also had the privilege of meeting all the African EDs and later on the European EDs of the World Bank and the outcry and solution are 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 developing world, secondly that we must quickly address the issues of economic revival and global supply chains and our health care systems, and this call for additionality of capital. And thirdly, we must design a new global financial architecture in order to rebuild global growth and institute a new global public good. We face unprecedented challenges and obviously unprecedented opportunities because existing systems are inadequate. Gentleman and Ladies, we have to innovate. There is no limit to the human genius - the Lord I believe is doing a new thing and we must perceive it.
All of these need to be soberly considered because a large part of humanity is at stake. Where are the Monnet’s who created the EU? Where are the Luther Kings who fought for civil rights? Where are the Ghandi’s who brought Empire to a standstill? Where are the Eleanor Roosevelts who led in the creation of world bodies post WW2? Where are the Nkrumah’s who begun the movement for political emancipation in Africa 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 unfortunately forlorn and melancholic, wondering how many of us will step up to be counted, and encouraging us with Norway’s great writer Ibsen’s words; ‘the strongest man in the world, Gentlemen and ladies, is he who stands most alone’. We must be ready to stand most alone.
So David, Kristalina and fellow Governors, I propose we establish an inclusive team of willing collaborators with the private sector from this meeting to create this new era that will make our future greater than the past. It is indeed a break the glass moment and we must seize it.
Concluding Remarks by Hon. Ken Ofori-Atta
Chairman, Development Committee of the World Bank and IMF
2020 Virtual Spring Meetings of the World Bank and IMF – 17th April 2020
I want to sincerely thank everyone for this outpouring of care and willingness to do more. However, the existential nature of the pandemic requires an extraordinary and graver global response even beyond our imagination.
The structures are shaken or fallen with no country spared.
- The need for the additionality of fresh capital is clear to us if we are to offer the appropriate stimulus and this has been echoed for example by Africa, Latin America, Southeast Asia and Caribbean to address fiscal shock.
- The need for a two year or longer standstill given that the nature of this pandemic is not a passing blizzard but truly a long winter, if not a mild ice age. And as indicated, a more comprehensive debt relief discussion and the US representative Mr. Mackintosh and David indicated to begin a dialogue with private sector creditors without coercion.
- As we look at debt, the issue of transparency should be very clear to us so that no one abuses this opportunity.
It is in my view that this is a very awkward time for sovereign credit rating downgrading and talks of moral hazard in the face of an unknown attack by an unknown enemy for what is not a blizzard but at best a long winter.
Let us from here move rapidly to create an inclusive global forum to rebuild the International financial and economic architecture and a new ability to respond equitably and rapidly to such a catastrophe.
And while it seems far away, the next time this Committee meets - hopefully in person - we need to be seeing the Green Shoots of Recovery.
Just as the previous apocalyptic events such as Black Death, World War 1, Spanish Flu, Great Depression, World War 2, Global financial & Asian Crisis, Ebola and now COVID-19, this too we shall defeat, only if we stand together.
Let us remake ourselves to create a new era.
Let us press forward the human genius and example of our leaders gone, so that our future will indeed be greater than our past, for in the end as the Bible said in Proverbs 11:4. Wealth is worthless in the day of wrath as we witness 2.2 million affected and nearly 150,000 dead recently and some 8 trillion disproportionately deployed.
I am confident that we will get through this, with Kristalina and David by our side, we can defeat this only by working together in solidarity and cooperation - a truly coordinated global effort.
May the Lord touch our hearts so we act in the interest of humanity.