Shadow Chancellor will today call for the radical reform of global institutions, such as the World Bank and IMF, to better address the climate crisis
John McDonnell will today call for a major overhaul of key international institutions to ensure they are fit for purpose in an age of escalating climate impacts and faltering global development.
In a speech at the opening plenary of Labour’s inaugural International Social Forum, the shadow chancellor will call for fundamental changes in the way bodies such as the IMF, the WTO, and the World Bank are run in order to prioritise climate action and give developing economies a greater say in decision-making.
The call will form part of a wide-ranging critique of international economic institutions, which McDonnell will accuse of having “failed to throw the entire weight of their resources and expertise into tackling climate change.”
The World Bank and IMF have drastically stepped up investments in climate action in recent years, while tightening lending criteria to limit support for carbon intensive projects.
But both bodies continue to attract fierce criticism for failing to do enough to help developing nations enhance their climate resilience and accelerate investment in clean technologies.
McDonnell’s calls come in the same week as the UN’s annual progress report on the Sustainable Development Goals warned escalating climate impacts risk pushing international development targets out of reach.
“The WTO is in crisis in many ways, including as a result of the US’s blocking of appointments to its appellate body,” McDonnell will say. “It has not done enough to ensure integration of trade measures and measures to combat climate change.
“The work of the IMF, the World Bank, and others has diminished people power – contributing to a loss of political agency – especially in the Global South.
“We are witnessing the latest wielding of that power. There is a grotesque ‘gentleman’s agreement’ that the IMF and Bank will be led by a European and an American. That’s the gentleman’s agreement that has produced the bizarre spectacle of George Osborne, architect of UK austerity, sticking his hand up to be the next Managing Director of the IMF.”
The shadow chancellor will announce plans for Labour to ensure that technologies developed in the UK to accelerate the climate transition are made available for free or at low cost to countries in the Global South.
He will also reveal plans to explore a proposal supported by economist Joseph Stiglitz for a Global Economic Coordination Council – an idead that was first floated in a 2009 UN report. The Council would sit at the level of the UN General Assembly and Security Council and replace the G20, which McDonnell describes as “unrepresentative”.
“People who push back against the current form of neoliberal globalisation are sometimes painted as reactionary nationalists,” McDonnell will say. “The suggestion is that there can be only two sides: defenders of existing right-wing globalisation and xenophobic nationalists. But we have to reject this false binary depiction.”
He will also provide an update on an ongoing consultation on the taxation of multinationals, which aims to ensure that they are taxed in a way that reflects where activity takes place and value is created.
The two-day conference will take place at SOAS in London this weekend. It seeks to internationalise labour’s policy priorities for tackling climate change and confronting inequality.
Attendees include former Brazilian president Dilma Rousseff, executive director of War on Want Asad Rehman, economics professor Jayati Ghosh, and climate activist Tina Ngata.