Financial system needs fundamental shift to overcome global crisis: PM

NEW YORK, Sept 20 (Agencies): Prime Minister Sheikh Hasina on Tuesday said the world financial system needs fundamental shift to address the ongoing financial crisis across the globe.
She put forward five points in reshaping the financial system while speaking at the high-level roundtable titled "Towards a Fair International Financial Architecture" held at UN Headquarters here.
The points are:
First, MDBs, IFIs, and private lending agencies must re-align their priorities and mobilize additional funds for SDG implementation and climate action.
Second, funds need to be made available for developing countries at low-cost, concessional rates, and preferably in higher quantities of grants;
Third, all lending instruments should have disaster clauses to allow vulnerable countries to absorb shocks during crises;
Fourth, fair and effective debt relief measures need to be given priority based on coordination and transparency among creditors; and,
Fifth, instead of quotas, SDR borrowing limits should be based on needs and vulnerability, supported by easy lending processes.
"We recognise that the international financial architecture needs urgent reforms. But agreement on the nature and extent of the reforms remains lacking. Political will is important," Hasina said.
She mentioned that international public finances are found to be costly and out-of-reach.
"We try to stay clear of high-interest-rate loans to avoid debt distress. Bangladesh has never defaulted on its loan repayment, and we hope to maintain that record," she said.
Agreeing with the UN Secretary General that the global credit rating system must be reviewed, she said that the current rating system further restricts access to funds for many low- and middle-income countries.
"The limits on their voting rights, quotas, and representation in MDBs and IFIs also undermine their bargaining power," she said.
Sheikh Hasina said it is critical for the international financial architecture to be inclusive and representative of the Global South.
"Development narratives from countries like Bangladesh demonstrate that we can do our part. It is time for the international financial system to respond to our expectations," she said.
Noting that Bangladesh has long been credited for its sound macro-economic management, the PM said, "Our economy grew by 8.15pc just before the pandemic."
She said the country's economy was put under stress due to the Covid pandemic and Ukraine war.
"Despite we're still maintaining 6-7pc GDP growth, we are trying to curb inflation, manage the balance of payments, and maintain our development expenditures. There are evident strains on our fiscal and policy space," she added.
She said her government reduced the poverty level from 41.9pc to 18.7pc and the extreme poverty level from 25.5pc to 5.6pc in the country.
Also on Tuesday, Hasina held bilateral meetings separately with Sri Lankan President Ranil Wickremesinghe, Timor-Leste President Dr Jose Ramos-Horta and Denmark Prime Minister Mette Frederiksen at the bilateral meeting room at the United Nations Headquarters. "Various aspects of the issues related to interest of Bangladesh were discussed during the meetings," Foreign Minister AK Abdul Momen while briefing reporters.
He said Director General of the International Atomic Energy Agency (IAEA) Rafael Mariano Grossi, paid a courtesy call on Sheikh Hasina at the latter's place of residence on the day.
During the meeting, the prime minister put emphasis on the peaceful use of nuclear energy and reiterated Bangladesh's steadfast commitment to nuclear disarmament and non-proliferation, said Momen.
Sheikh Hasina recalled that Bangladesh ratified the Nuclear Non-Proliferation Treaty and Comprehensive Test Ban Treaty after she formed the government for her first term.
She expressed her sincere thanks to IAEA for providing technical support to Bangladesh Atomic Energy Commission and Savar Nuclear Reactor Research Establishment.
Meanwhile, the prime minister highlighted the progress of Bangladesh in developing adversity-tolerant and high-yielding crop varieties developed by Bangladesh Institute of Nuclear Agriculture (BINA), said the FM.
Meanwhile, Prime Minister Sheikh Hasina Tuesday attended a reception hosted by the USA President Joe Biden.
Biden hosted the banquet at The Metropolitan Museum of Art in Tuesday evening in honor of the heads of state and government who arrived in New York to take part in the 78th United Nations General Assembly (UNGA) Session.
Foreign Minister Dr AK Abdul Momen informed newsmen about the reception at a press briefing on the Prime Minister's engagements here.
PM's daughter and Thematic Abmassador of the Climate Vulnerable Forum (CVF) Saima Wazed accompanied the premier.
During the banquet, the Prime Minister exchanged pleasantries with the heads of the government and state from various countries.