Which of the following statement is correct about New Global Financing Pact 2023?
I. The summit was co-organized by France, Barbados and India.
II. The objective of the summit is to set the foundations for a new global financing architecture beyond the Bretton Woods system to address climate change, biodiversity crisis and development challenges.

Correct option is D

The correct answer is (d) Both I and II

Explanation:

Statement I: Correct. The Summit for a New Global Financing Pact, held on June 22–23, 2023, in Paris, was co-organized by France, Barbados, and India. ​

Statement II: Correct. The summit aimed to establish the foundations for a new global financing architecture beyond the Bretton Woods system to address pressing global challenges such as climate change, the biodiversity crisis, and development challenges. ​

Information Booster:

• Objective: The summit sought to reshape the global financial system to better address the interconnected challenges of poverty, climate change, and biodiversity loss, ensuring that no country has to choose between reducing poverty and combating climate change. ​

Key Highlights of the Summit

Crises Faced by Developing Countries:

• Multiple challenges: Poverty, rising debt, and inflation, worsened by the Russia-Ukraine conflict.
• Decarbonisation pressure: Developing nations must reduce emissions despite insufficient climate finance.

Demands from the Global South:

• MDBs' Role: Calls for Multilateral Development Banks to address transboundary challenges and increase development resources, including climate finance.
• Debt Concerns: Demand for concessional and grant financing, debt reductions, and debt relief, especially for least developed nations.
• Private Sector Financing: Acknowledgment of the role of private investment, but emphasis on long-term development funds as a complement.

Announcements at the Summit:

1. USD 200 billion lending capacity: Unlocking additional funds for emerging economies.
2. World Bank disaster clauses: New clauses allow debt suspension during extreme weather events.
3. IMF SDR allocation:USD 100 billion in Special Drawing Rights for vulnerable countries (pending US approval).
4. Senegal's JETP deal:2.5 billion Euros to increase renewable energy in Senegal's electricity mix.
5. Zambia's debt deal:USD 6.3 billion debt restructuring agreement.
6. Global Expert Review: Calls for an expert review on debt, nature, and climate.
7. EU's proposal: Increased carbon pricing mechanisms with a portion of revenues directed toward climate finance.
8. USD 100 billion climate finance goal: The long-awaited goal to be achieved, as per the UNFCCC COP 15 (Copenhagen, 2009) commitment.

Additional Knowledge:

Bridgetown Initiative: A proposal led by Barbados aiming to reform international financial institutions to better address the needs of vulnerable countries, particularly in the context of climate change and development.