UN chief warns of fragmentation in global finance system
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In his comprehensive address, Guterres urges world leaders to seek peaceful and inclusive resolutions for the world's pressing challenges.
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UN Secretary-General Antonio Guterres gestures as he speaks to the media during a press conference on the sidelines of the ASEAN summit in Jakarta, September 7, 2023. (AP)
UN Secretary-General Antonio Guterres, during a summit involving Southeast Asia's ASEAN bloc, China, the US, and other nations in Indonesia, warned that the global economic and financial systems are at risk of a significant fracture.
In his comprehensive address covering topics like geopolitical tensions, multilateral development finance, and climate change, Guterres urged world leaders to seek peaceful and inclusive resolutions for the world's pressing challenges.
"There is a real risk of fragmentation – of a great fracture in world economic and financial systems; with diverging strategies on technology and artificial intelligence and conflicting security frameworks," he said.
He advocated for the establishment of a mechanism aimed at offering assistance to financially burdened developing nations. This assistance would encompass measures such as debt payment suspensions, extended lending terms, and reduced interest rates.
Additionally, he expressed his backing for reallocating an extra $100 billion in International Monetary Fund's Special Drawing Rights via multilateral development banks. This reallocation is intended to bolster liquidity and cater to the requirements of developing economies.
Read more: ASEAN urges US to be 'positive force' in Indo-Pacific: Widodo
In 2021, wealthy nations reached an agreement to redirect the untapped resources of an international reserve currency to support less affluent countries.
During a summit in Paris in June of this year, global leaders endorsed an initiative calling for multilateral development banks, such as the World Bank, to increase their commitment to riskier investments in order to facilitate more extensive lending.
World Bank President Ajay Banga presented a comprehensive strategy, often referred to as a "toolkit", at the same summit. This toolkit encompasses various measures, including the suspension of debt repayments, granting nations the flexibility to reallocate funds for emergency responses, offering new forms of insurance to support development projects, and assisting governments in constructing advanced emergency systems.
Myanmar crisis worsening
Guterres also expressed "grave concerns" regarding the deteriorating political, humanitarian, and human rights circumstances in Myanmar, a country plagued by conflict since the military coup in 2021.
"I reiterate my urgent call on the military authorities of Myanmar to listen to the aspirations of its people, release all political prisoners, and open the door to a return to democratic rule," he said.
In a declaration released on Wednesday, Indonesia, serving as the chair of ASEAN, conveyed that regional leaders had voiced "serious apprehension" regarding the limited headway made on their five-point peace strategy for Myanmar.
Later on Thursday, ASEAN leaders are scheduled to engage in discussions with the UN.
Read more: Myanmar's Suu Kyi granted partial pardon by Myanmar Junta
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