Money, politics and power – reforming the international financial architecture: Make Change Happen podcast episode 28

In this episode, IIED’s director of shaping sustainable markets, Laura Kelly, and senior researcher in IIED’s governance and finance team, Dr Mohsen Gul, talk about the critical need for reform of the international financial architecture – the framework of institutions, policies, rules and practices that govern the global financial system.

Article, 30 September 2024
Collection
UN climate change conference (COP29)
A series of pages related to IIED's activities at the 2024 UNFCCC climate change summit in Baku

In IIED’s 'Make Change Happen' podcasts, our researchers and guests discuss key global development challenges and explain what IIED is doing to support positive change.

Today’s episode looks at the international financial architecture (IFA) – the global system that includes the World Bank and International Monetary Fund, multilateral development banks (MDBs) and international financial institutions (IFIs).

Reform of these structures is high on the agenda at several international summits and meetings taking place over the next 12 months. This began with September’s UN Summit of the Future. As these conversations continue, IIED is seizing the opportunity to call for reform to the IFA.

In the episode, IIED’s Laura Kelly and Mohsen (‘Moh’) Gul set the scene by explaining why the IFA needs to be fit for purpose and work for everyone, including the least developed countries (LDCs), and why discussions around IFA reforms must include the voices of lower-income countries, LDCs and Small Island Developing States (SIDS).

IIED’s chief economist Paul Steele then outlines three priorities for reform of the IFA: the need to ensure funding is combined with nature and climate finance; the need to ensure LDCs contribute meaningfully to discussions; and the need to focus on the quality, not just quantity, of funding so that money gets to where it matters.

With the annual meetings of the IMF and World Bank approaching, as well as the UN climate summit (COP29), Laura Kelly and Moh Gul reflect on why the worlds of climate and finance must be brought together and why funds need to reach communities in an innovative and equitable way. They highlight that private finance also has a role to play, as do other mechanisms such as insurance and debt management.

This leads us to a practical example of IIED’s work on debt. IIED’s Ritu Bharadwaj talks about the Global SIDS Debt Sustainability Support Service, co-designed by IIED to alleviate crippling levels of debt and build economic resilience among SIDS. She reflects on this initiative’s potential to be scaled up to benefit LDCs.

IIED has been working closely with partners in LDCs, including Isatou F Camara, director of finance at The Gambia’s Ministry of Finance and Economic Affairs. She explains that the current supply of climate finance falls drastically short of the required amounts LDCs need, calling for faster and more accessible funding to reach these countries.

Laura Kelly and Moh Gul then discuss why all parts of the financial architecture – including the World Bank and IMF, COP29, the G20, global and local private sector institutions, and the Fourth International Conference on Financing for Development in 2025 – must come together, rather than working in silos.

In closing, our hosts discuss what one change could make the international financial architecture work for everyone. It’s about redressing the power imbalance, so that LDCs and SIDS have meaningful space to engage in discussions around IFA reform in a way that is participatory, inclusive and equitable.

Tell us what you think of this episode by emailing [email protected].

Contributors

Head and shoulders photo of Laura Kelly.

Laura Kelly is director of shaping sustainable markets at IIED. She has worked across government, NGOs and think tanks, delivering programmes and policy change on issues including agriculture, trade and private sector. She supports and develops IIED’s work on inclusive and green economies.

Head and shoulders photo of Mohsen Gul.

Mohsen Gul is a senior researcher in IIED’s climate governance and finance team. He specialises in sustainable finance, climate resilience and just transition, particularly in the global South. He leads and contributes to IIED’s policy research and projects focused on climate finance.

Head and shoulders photo of Paul Steele.

Paul Steele is IIED’s chief economist, specialising in the links between environment, climate and poverty reduction. He has more than 20 years' experience working for international organisations, including UNDP, the European Union and the World Bank.

Head and shoulders image of Ritu Bharadwaj.

Ritu Bharadwaj is principal researcher in IIED’s climate governance and finance team. Over the past two decades she has worked extensively on social protection, climate resilience, forest and watershed management, resource conservation, livelihood and gender issues.

Head and shoulders image of Isatou Camara.

Isatou F Camara is director of climate finance at The Gambia’s Ministry of Finance and Economic Affairs. She leads climate finance negotiations on behalf of the least developed countries under the United Nations Framework Convention on Climate Change.

How to listen and subscribe

The ‘Make Change Happen’ podcast provides informal insights into IIED’s work to create positive change and make the complex issues we face more accessible to wider audiences.

Listen to the podcast on IIED's YouTube channel.

You can follow some of the people you have heard in this episode on Twitter at @LauraKellyIIED, @mohsengul, and @RituBharadwaj16. Follow the podcast on @IIED_Voices for all the latest updates.