Denis Naughten (Roscommon-Galway, Independent) | Oireachtas source

I welcome the opportunity to speak on the Bill. It covers three main areas, one of which I want to focus on. I want to focus on the new legislative provision to facilitate entry into a contribution agreement with international financial institutions, also known as multilateral development banks, namely the European Investment Bank, the European Bank for Reconstruction and Development, and the Council of Europe Development Bank, enabling a contribution to a trust or donor fund to be established by them for the purposes of responding to a particular crisis.

I propose that a specific fund should be established under the legislation to address a specific crisis, namely the climate emergency, with specific reference to its impact on migration, which the EU has defined as a crisis. According to the World Bank, the pandemic has pushed an additional 100 million people into extreme poverty. Furthermore, the United Nations Conference on Trade and Development reports that foreign direct investment flows have declined by 35% in developing countries, compared with a reduction of 12% in developed countries.

As the Minister of State knows, the ongoing war in Ukraine continues to cast its shadow, increasing global economic uncertainty and adversely affecting global trade and investment flows.

This disruption caused by the war also helped to push the UN Food and Agriculture Organisation's food price index to its highest level in 2022 since 1961. The slow and halting recovery from the Covid-19 pandemic has run up against the high food and energy prices driven by Russia's war in Ukraine, as well as the escalating impacts of climate change. Alongside the elevated debt servicing levels, local currency devaluation and higher capital costs have disproportionately distressed the economies the lower-middle income countries while also facing the prospect of a slowing global economy.

These shocks have weakened economic growth and ballooned debt burdens. Urgent action is needed to immediately help lower-middle income countries to restore debt sustainability and mobilise resources to achieve the shared development and climate change goals that we all aspire to. As I speak, 47 Heads of State and Government from across the European continent are meeting as part of the European political community in Granada, Spain. They are meeting the European Council members who have at the top of their agenda a plan to manage inward migration, which is seen as a major challenge facing the Continent. The main drivers of this migration are either directly or indirectly attributable to both economic and climate challenges. We in Europe will try to build our walls higher and we will try to redistribute inward migration across the Continent for those who manage to scale those walls. The best and most effective way to address this issue is to ensure that people are not forced to leave their homelands in the first place. I have been engaging with young members of parliament from Egypt, Ghana, Indonesia and Senegal who, along with academic experts and climate-focused organisations, are committed to improving the economic and social well-being of the global south and the lower-middle income countries. They are requesting greater support for the global south and lower-middle income countries to drive the climate change agenda. Their generation is acutely aware of the pressing challenges posed by climate change. They have grown up witnessing its devastating impacts on communities, ecosystems and their economies. These include extreme weather events, food insecurity, rising sea levels and the displacement of citizens. The climate crisis is not a distant threat but a stark reality that affects each and every one of us.

They represent nations with heavy debt burdens that, as a result, leaves them facing a very slow green transition. They are seeking action from the international community and from us, as Europeans, for fair climate financing. The Ubuntuinitiative for climate financing is a proposal that these four young parliamentarians have put forward. They chose the name Ubuntu, which is a South African phrase often translated as "I am because you are", to signify the importance of working together as humans in facing the climate change risks we are all trying to address. The initiative has been supported by more than 45 countries from the global south and Ukraine as a lower-middle income country. There are three proposals under this initiative. First, debt swaps for climate with a special focus on adaptation. This would have the dual benefit of providing debt relief and spurring climate action. This measure will help to alleviate the burden of debt on lower-middle income countries. It will allow them to focus on building resilient economies and societies, engage in global trade and contribute to the global climate and sustainability goals. Second, they propose a common framework for debt relief similar to the G20 common framework for these countries. This framework for debt relief for lower-middle income countries would help them to deal with the fiscal tightness and protracted liquidity problems they face. It would also ensure that these countries are not burdened with unsustainable debt that could impede their ability to respond to the urgent challenges of climate change. It would also help with economic and social development. Third, the International Monetary Fund, IMF, surcharges policy must be immediately suspended and eventually eliminated in the upcoming review. These additional charges on top of basic interest rate fees have placed an unfair burden on vulnerable countries in need of financial support. Alleviation of the debt pressures ensures a smooth transition to a green economy.

In light of the global challenges, they are deeply concerned about the impact of Covid-19 and the ongoing war in Ukraine on the economies of the lower-middle income countries they represent. These two shocks have resulted in a sharp decline in economic activity, job losses and inflation, including rising food prices, all of which lead to increased poverty levels. This forces people to migrate, leading to the very issue that the European summit is trying to address, as we speak. As a result, there is a need to provide greater support to the global south and lower-middle income countries by prioritising these three key points.

We will send representatives to the World Bank and IMF meeting in Marrakesh next week. I ask the Minister of State to ensure that our delegation supports the Ubuntuinitiative of these young parliamentarians from across the world to get a fair write-down of debt in conjunction with stimulating their indigenous economies and addressing the climate change challenges they are facing in their countries and across their regions.

The reality is that this debt is stopping innovation and opportunity. It is forcing the best people in those countries to up and leave and come to Europe for a better life. It is compounding the economic stagnation that many of these countries are facing at present. It is leaving these countries with a lack of funding to address the climate challenge that has been caused by us, here in the developed world. Funding has not been forthcoming from all in the developed world to create a new fund in which countries responsible for high carbon emissions would compensate vulnerable countries that have suffered from the climate impacts. However, here is an opportunity for us to come up with an innovative measure of debt forgiveness that would support climate change action and the delivery of the constructive climate change initiatives that we are all talking about. It would support sustainable investment in countries that have been hamstrung up to now because of the levels of debt that they have been trying to manage.

The Ubuntu initiative is coming from communities in these countries. It is coming from the future leaders of our nations, the young parliamentarians in these countries. We are not only supporting the breaking out from the constraints that have been created through debt for various reasons. As we know, some of these reasons have to do with poor governance in these countries which has been facilitated by many of our colleague countries here in the developed world. Many of the regimes here have supported that level of debt creation in some of those countries. On top of that, what we have done in terms of carbon emissions has compounded the climate problems that they are facing. While we are concerned about global stagnation of the economy and the impact it has here on GDP and GNP, it is having a devastating impact on food prices and the viability of many of these economies.

As a result, these countries cannot service the levels of debt that they are being asked to do. On top of that the International Monetary Fund is effectively putting debt penalties on top of interest rates to compound an already difficult problem.

I am asking that we here in Ireland would support the Ubuntu initiative in two ways. We should forcefully support these young parliamentarians when they propose this initiative at that meeting next week. We should also talk with our European colleagues about setting up a fund here in Europe that would help to deal with these challenges and would help to support driving innovative climate-change measures in many of these countries so that people have the opportunity to live and work in their own communities, in their own countries rather than making a perilous journey across the Sahara desert and then making a journey across the Mediterranean which is nothing short of suicidal. We listen to the interviews of these people who are on the shores of the Mediterranean Sea in North Africa and they are very well aware of the risks that they face going across the Mediterranean. They see their neighbours and family members losing their lives on the Mediterranean and yet they are prepared to take that risk because that risk is better than the lack of any future that they have at the moment.

We control that future within our hands. We have the opportunity to drive innovative change by taking a more flexible approach to the management of debt. We are not talking about writing off the debt; we are talking about seeing that debt being adapted in a different way so that instead of paying off loans investment would be put into the economies of these countries to drive sustainable development and drive the green economy in these countries, meeting our global targets on climate change and sustainability as well as addressing the issue of migration, the issue that the leaders all over Europe are looking at at the moment. I ask the Minister of State to work with her European colleagues to support this initiative. Let all of us together collectively make a real difference on a global level to the issue of climate change.

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