Climate Finance, Debt Relief, Structural Reform: Key Demands of Maldives at IMF Summit

In a stirring address at the 2024 Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group, Ahmed Munawar, Governor of the Maldives Monetary Authority (MMA), urged global financial leaders to intensify efforts in climate finance, debt sustainability, and structural reforms.

Marking the 80th anniversary of the Bretton Woods Institutions, Governor Munawar reflected on the enduring relevance of their mission. Quoting John W. Snyder, the first Chair of the Boards of Governors, he reminded attendees of their collective responsibility: “We must not fail our governments and, above all, the hopeful people we represent.”

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Governor Ahmed Munawar chairs the Board of Governors at the IMF-World Bank Annual Meeting, marking the first time in 80 years of Bretton Woods history that the Maldives assumes this role.

2024 Annual Meetings – Address by the Chair of the Boards of Governors:… pic.twitter.com/VRcRaN1ISP— MMA (@MMA_Maldives) October 25, 2024

Despite acknowledging the global economy’s resilience—highlighting moderating inflation and the possibility of a soft landing—Munawar cautioned against complacency. “Uncertainty remains high,” he warned, pointing to ongoing conflicts and geopolitical tensions that threaten vulnerable economies through rising commodity prices.

Climate Change: An Urgent Call for Action

As a representative of a small island nation on the front lines of climate change, Governor Munawar emphasised the existential threat it poses to countries like the Maldives. He outlined the Maldives’ ambitious goal to source 33% of its electricity from renewable energy by 2028, a transition requiring an investment of $1.3 billion. With only 13% of this funding pledged by donors, he called on international financial institutions to provide more accessible and affordable climate finance for adaptation and mitigation efforts.

While commending the IMF’s Resilience and Sustainability Fund and the World Bank’s record $42.6 billion in climate finance for fiscal year 2024, Munawar stressed that “more is needed, especially for climate-vulnerable Small Island Developing States (SIDS).” He advocated for innovative strategies to mobilise private sector investments, highlighting the critical role they play in addressing climate challenges.

Debt Sustainability: A Growing Concern

Addressing the issue of debt, Munawar noted that over two-thirds of emerging markets and developing economies are at high risk of debt distress. He acknowledged the Global Sovereign Debt Roundtable’s efforts to encourage collaboration but emphasised that “more action is needed.” He urged that debt sustainability analyses better reflect individual country contexts, particularly for SIDS, and called on the IMF, World Bank, and Multilateral Development Banks (MDBs) to take bold steps in supporting nations facing debt challenges. Proposals included the creation of tools like debt-for-climate swaps, which exchange debt relief for climate adaptation investments.

Structural Reforms: Building Resilient Economies

Governor Munawar highlighted the necessity of strengthening the productive capacities of emerging and developing economies. He urged the Bretton Woods Institutions to focus more on job creation, equal opportunities, economic diversification, and addressing the impacts of refugee flows. “Structural reforms must be socially acceptable, ensuring benefits are widely shared,” he asserted, emphasising that inclusive growth is essential for long-term stability.

IMF-World Bank Annual Meetings

The 2024 Annual Meetings, held in Washington D.C., brought together central bankers, finance ministers, academics, and private sector executives from around the world. This year’s meetings were particularly significant, commemorating eight decades since the establishment of the IMF and the World Bank at the Bretton Woods Conference in 1944. The forums provided an opportunity to reflect on past achievements and to strategise on addressing current global economic challenges.

Key discussions centred around quota realignments, the 16th General Review of Quotas, and strengthening the financial capacity of the World Bank Group. The addition of Liechtenstein as the 191st member of the IMF was celebrated, reinforcing the importance of multilateralism. Moreover, the establishment of the 25th Chair at the IMF’s Executive Board for Sub-Saharan Africa was welcomed as a step towards greater representation.

A Call for Multilateral Cooperation

Throughout his speech, Governor Munawar emphasised the critical need for multilateral cooperation in an increasingly fragmented world. He urged fellow Governors to champion gender diversity and equality, reinforcing the idea that inclusive governance leads to more effective solutions.

“As the Bretton Woods Institutions plan for the future, they should tailor their advice and activities to meet the specific needs and capacities of each member,” Munawar stated. He concluded by reiterating the words of John W. Snyder from 80 years prior, serving as a poignant reminder of the institutions’ foundational purpose.

pic.twitter.com/ZhOifQtBzH— MMA (@MMA_Maldives) October 25, 2024

Governor Munawar’s address encapsulated the sentiments of many attendees who recognise that while progress has been made, significant challenges remain. His calls for enhanced climate finance, debt relief mechanisms, and socially inclusive structural reforms resonated with delegates who are aware that collective action is imperative.

The 2024 Annual Meetings concluded with a renewed commitment among member countries to work collaboratively towards macroeconomic stability, shared prosperity, and sustained cooperation. The discussions and resolutions from the meetings are expected to shape the policies and priorities of the IMF and the World Bank Group in the coming years, particularly in supporting vulnerable nations facing climate and debt crises.