Editorials

An alliance as big as the challenges we face

ROBERTSROB VIA GETTY IMAGES

Juan E. Notaro

Executive President of FONPLATA – Development Bank

What does it take for 450 public development banks from around the world to establish a global alliance? One could say: a pandemic, a looming world-economic crisis, and the already impossible to ignore impact of climate change.

Although these are compelling reasons, the underlying motivation is the growing awareness that we share a common destiny, that our challenges no longer respond to a logic of countries and territories, and that together we are stronger.

These are some of my thoughts after following for some days the events of Finance in Common, the first global summit of public development banks that was held in Paris and through video conferencing.

For some years now, the world has had a ‘road map’: the Sustainable Development Goals of the United Nations, a list of ambitious goals that most mankind has committed to reach before 2030.

Even if the progress towards these goals has been different in various countries and regions, 2020 has proven that it is critical to start working together in the construction of that world we dream to be fairer, more sustainable, and supportive.

Despite the current and concrete threatens, based on what I could see and listen in the Paris Summit, I strongly believe that what inspires the representatives of the 450 participating banks and makes them commit to this cause is not the danger, but the future opportunities.

What can public development banks do to reach that? This global alliance of 450 institutions, with a funding power that goes beyond the amount needed to purchase the five most important tech companies in the world, is an important first step.

The role that these institutions will play in the post-pandemic economic recovery is the second. In their final declaration, they state: “we can provide countercyclical answers in times of crisis”.

In other words, these banks, among them FONPLATA – Development Bank, of which I am honored to be the President, have the competence and the mandate to provide funding when it is not possible or not profitable for other institutions to do so.

Another important advantage of this type of institution is the forward-looking approach. “The post COVID-19 world demands a long-awaited change of paradigm for the recovery to be resilient, inclusive, and sustainable”, asserts the final declaration.

With this forward-looking perspective, the institutions committed — we committed — to strongly support the Paris Agreement on Climate Change and the achievement of the Sustainable Development Goals.

This commitment reaches the very essence of our banks, so that we decided to adjust our mandates and stop funding projects and works that are “incompatible with a fair and inclusive transition towards low-carbon and climate-resilient sustainable development”.

We are also willing to adjust our business models, our alliances with the private sector, the civil society, and other banks. In other words, everything that we will do from now on should aim at the development of a cleaner and fairer world.

The banks also made specific and equally urgent commitments, such as investment on the adaptation to climate change, socially sustainable investment for the post-COVID-19 recovery, and on agricultural and food systems.

We also agreed to meet again in 2021 to validate this work program, strengthen the commitment of banks and governments, and establish methods to follow up the progress made in each goal.

When I left the videoconference with Paris I had the feeling that, despite the urgencies of our immediate reality, this global alliance of 450 public development banks is as big as the challenges we face.

Some months ago, when I first wrote about this summit, I made a public commitment, as well as on behalf of FONPLATA – Development Bank, to do my best to contribute with our efforts, projects, and knowledge on this area.

Now that I witnessed the challenge assumed in Paris by so many institutions similar to the one I represent, I know that even with difficulties, we will walk this path together, with our focus on the future of mankind.

Text originally published in the monthly column of Juan E. Notaro in the Huffington Post.

12/02/2020