UN chief calls for overhaul of ‘outdated and dysfunctional’ global financial system

The global financial system stands at a crossroads, revealing deep-seated inequities that disproportionately favor wealthy nations, leaving developing countries to grapple with the survival of their national currencies and crippling debt burdens. This stark divide has been magnified by the pandemic, which exposed the systemic biases and inherent flaws of the current framework. 

As developing nations grapple with economic instability and limited access to financial resources, United Nations Secretary-General António Guterres highlighted the need for an overhaul of the current global financial system.

Guterres described today’s international financial system as “outdated, dysfunctional, and unfair,” adding that it currently serves rich nations, while a great number of countries continue to suffer “through a deep financial crisis,” he said during the Group of Seven (G7) summit on Sunday, May 21. 

“There is a systemic and unjust bias in global economic and financial frameworks in favor of rich countries, which is naturally generating great frustration in the developing world.”

– said Guterres.

Third world struggling to recover from the pandemic, Guterres says

Guterres, who served as Portugal’s prime minister more than 20 years ago, said leading global economies recovered from the devastating impact of the coronavirus pandemic through expansionary monetary and fiscal policies.

“Trillions and trillions were spent. Basically, they printed money and spent their way out of trouble.”

– Guterres said.

Meanwhile, third-world countries, which have significant debts on their hands, could not do the same as employing such policies would have sent their national currencies sinking, the UN chief added. 

The Secretary-General continued, pointing out “a growing conscience in developer countries, but also in the G7, “ that not enough is being done, both to reform outdated institutions” and ease the frustration seen in the Global South, he said.