From Cartagena, the president referred to the proposal to swap debt for climate action that his country is advancing, together with France, Kenya and Ghana.
In a meeting with more than 500 public development banks in the city of Cartagena (Bolivar), the president of Colombia, Gustavo Petro, referred to the alternatives that his country is promoting to get out of the climate crisis generated by the market, and the need for a decrease in interest rates.
On Thursday, the president closed the fourth edition of the Finance in Common Summit (FICS), which took place from September 4 to 6, and in which participants 520 development banks that finance 12% of global investment each year, according to the website of the Inter-American Development Bank (IDB).
During his speech, which lasted just under half an hour, the head of state wondered if the market, by itself, would be able to solve the global climate crisis, to which he added: “The one who produced the climate crisis was the market“.
“If we don’t stop it, we are going to die as a species”
Along these lines, Petro blamed the climate crisis on “cumulative capital growth“, which is “driven by profit” and which absorbs “more and more energy that comes from coal and oil”.
“I transfer economic accumulation into the atmosphere in chemical form and that is what we are dying from. And if we do not stop it, that is what we are going to die from as a species,” he warned.
He then raised another question: “How could the market, acting alone, solve humanity’s main problem? Well, I believe that it cannot act alone. I’m not in the perspective that the market can’t help“he asserted.
The profitability dilemma
Petro raised the dilemma between profitable projects – which can be financed by private capital, such as the proposed wind energy generation in the department of La Guajira – and those that are not economically profitable, such as the recovery of the jungle.
“If I see it on a Colombian scale, what we could contribute the most to solving the climate crisis in the world is recover the millions of hectares that we lostburned, in the Amazon jungle,” he asserted.
Given this statement, he put another question on the table again: “Can someone lend me a loan to recover that jungle?”, to which he stated: “There is no economic profitability there”, beyond the “social and vital” one.
Therefore, he called for addressing the problem under “another mental world” so that the “priority in South America is for the jungle to recover its natural border.” Under this conception, he considered that public cooperation on a global scale, with a more strengthened state bank, would offer a possible solution.
What is Colombia’s proposal?
In his speech, Petro reported that Colombia, France, Kenya and Ghana prepare the proposal to change external debt for climate action, which will be presented at the United Nations General Assembly and at the United Nations Conference on Climate Change (COP 28), which will take place in Dubai, between November and December of this year.
The proposal consists of carrying out a global issuance of Special Drawing Rights from the International Monetary Fund (IMF) to pay creditors, reduce global debt services and free up budgetary financial space for public powers, to establish a ‘Marshall Plan’. ‘ against the climate crisis.
“It is repeating the Covid-19 thing with different criteria of proportions between countries and with one objective: a relaunch of the world economy. The emission would bring economic growth but focused on one objective: investments that reduce greenhouse gas emissions on the planet,” he stated.
The Colombian president affirmed that the countries’ debt “grows faster than production” and recalled that in Colombia, in 2024, the largest item in the national budget will be to pay interest on the debt.
“If there is no change, more and more of the work of Colombians, paid to the State through taxes, will go towards paying interest,” he warned. In this sense, he cited an example: “Like someone who uses a credit card and no longer has enough to do the market. That scenario is global,” she added.
Given this, he asked the central banks to lower interest rates – a request that he already made in his country to the state-owned Bank of the Republic, in recent days – because this institution believes that there should be no decreases and that they should remain as they are. .
Previously, the Government, the National Association of Businessmen of Colombia (Andi) and the Association of Banking and Financial Entities of Colombia (Asobancaria) agreed that it was possible at this time for a reduction in interest rates to occur.
In his opinion, there is a weakening of public power on a global scale and it is precisely debt that “reduces the financial capacity” of the world, so it loses its capacity for action.