The Minister of Finance, Jochi Vicente, considered that a new international financial architecture must be created to combat systematic crises through innovative instruments, such as the debt-for-nature swap, thus avoiding an increase in the indebtedness of developing countries.
The proposal, presented by the Dominican Republic upon assuming the pro tempore secretariat of the Ibero-American Conference on International Financial Architecture, would explore new, more equitable financing options for the region, which would allow it to face challenges such as hunger, poverty, the climate crisis and inequality.
Vicente, who has been leading the proposal, stressed that a new international financial architecture is necessary to achieve a greater influx of resources for development, expanding the limits of access that Latin American countries have.
Likewise, it indicated that the evaluation of new issues of Special Drawing Rights (DEG) by the International Monetary Fund (IMF) could be promoted and the multilateral development banks be given the capacity to be holders and channels of these, thus seeking expedite its favorable use by countries in greatest need.
“For the IMF’s Special Drawing Rights to become a more useful tool for middle-income countries, it is necessary to make it possible to rechannel them from nations that do not need them to those that do require them,” he added.
The official, who gave the explanation to the Somos Iberoamérica portal, prior to the XXVIII Ibero-American Summit of Heads of State and Government, pointed out that Latin America and the Caribbean are coming to the event in the midst of a turbulent macroeconomic environment and persistent budgetary pressures.
Despite the challenging global outlook, he highlighted that the sovereign risk ratings have remained stable, due to well-anchored inflationary expectations, a proactive management of monetary policy, and the relative flexibility that foreign exchange markets have exhibited in Latin America.
“This contributes to the ability of countries to absorb possible external shocks and finance government operations in the context of continued pressures from the spending side to combat the erosion of citizens’ purchasing power and contain social outbreaks,” stated.
The person in charge of public finances of the Dominican Republic recognized that Latin America is shaping up to be one of the regions that will be most affected by the effects of climate change, therefore, it demands a joint and integrated solution.
“Obviously, both the pandemic and the inflationary crisis have put considerable pressure on the public finances of the countries of the region, so the support of the international community and multilateral organizations will be key to consolidating the implementation of these public policies in a context fiscal sustainability,” he said.
Within the framework of the Summit, which will take place in Santo Domingo from March 24 to 25, the Minister of Finance will attend the XVI Ibero-American Business Meeting this Thursday, which will take place in the port of San Souci, with the presence of hundreds of businessmen local and foreign.
Vicente will participate in the discussion “Economic and investment outlook in the region” and will introduce the panel “The public gaze: economic prospects for Ibero-America”, in which the report “Economic prospects for Latin America 2022: towards a green and sustainable transition” will be presented. fair”.