Barbados PM Mottley Urges Establishment of New World Bank Emergency Liquidity Facility, According to Reuters

By Andrea Shalal

NEW YORK – Barbados is advocating for the establishment of a new World Bank finance facility aimed at providing emergency liquidity to countries vulnerable to climate change, as part of an updated version of the Bridgetown Initiative supported by numerous developing nations, according to sources familiar with the plans.

Prime Minister Mia Mottley of Barbados addressed members of the Council on Foreign Relations, highlighting ongoing changes while calling for further reforms within international financial institutions to tackle the escalating issues of high debt, climate change, and sluggish economic growth.

“The success we need requires a shift in attitudes globally,” Mottley stated. “Modifying the rules to ensure we are acknowledged and listened to is crucial, especially in light of the various challenges we face.”

First introduced in 2022 and revised earlier this year, the Bridgetown Initiative seeks reforms that would lower borrowing costs for emerging markets and developing nations—approximately 70 of which are at risk of debt distress.

In addition, countries are examining various tax strategies, including levies on shipping and airlines, as well as taxes on the ultra-rich. These measures aim to generate the extensive funding necessary to create more climate-resilient economies without further increasing debt.

The latest iteration of the initiative, Bridgetown 3.0, outlines specific actions that could facilitate increased financing to enable countries to adapt to climate change, shield their economies from natural disasters, and encourage sustainable long-term growth.

The initiative estimates that emerging markets and developing nations will require $1.8 trillion annually to confront the climate crisis and make necessary nature-related investments, alongside another $1.2 trillion each year to alleviate poverty, enhance education, and meet other Sustainable Development Goals.

The agenda emphasizes the importance of giving developing countries a more significant voice in the governance and decision-making processes of international financial institutions. It also calls for reforms to the Group of 20 Common Framework for debt treatment to ensure more timely responses.

Furthermore, it proposes that the World Bank create a dedicated “universal contingent finance facility” designed to offer emergency liquidity on low- or zero-interest terms to all climate-vulnerable nations following natural disasters.

The updated initiative also encourages new and existing donor countries to contribute at least $120 billion this year to replenish the International Development Association (IDA), the World Bank’s branch that aids low-income countries, while urging private finance to mobilize an additional $500 billion annually.

Rajiv Shah, former Administrator of the U.S. Agency for International Development and current president of the Rockefeller Foundation, praised the updated initiative, expressing that its implementation could potentially generate trillions of dollars in new funding for emerging markets and developing nations.