Financially inclusive societies drive opportunity and growth

What are some of the most pressing issues facing the global economy right now?

The topmost challenge is economic growth. Since the end of the pandemic, economies have been growing at a much slower pace. Many countries have challenges providing basic health and education services, and we see those countries, and society as a whole, getting more and more unequal. 

The second crisis I would mention is the debt burden. Many developing countries are riddled with excessive debt, making it difficult for them to meet their domestic and external obligations.

There’s also the crisis of climate change. Climate and environmental disasters are happening with more frequency and more severity.

And finally, geopolitical tensions in Ukraine, the Middle East and elsewhere have caused major economic challenges, driving up inflation and interest rates.

How can financial inclusion solve some of these challenges?

It’s a well-documented fact that more financially inclusive societies spread economic opportunity and drive economic growth.

Financial inclusion also helps societies mitigate and build resilience against climate impacts by investing in green products like savings, credit, and insurance.

Financially included communities also recover from climate-related disasters faster, by accessing digital and other financial transfers to send and receive instant emergency relief.

Why should developing countries have a say in solving global economic challenges?

70 percent of the world’s population lives in developing countries. Despite the overwhelming proportion, the inherent configuration of the global power arena makes it impossible for developing nations to have their say. This needs to change

A starting point would be governance reforms. The governance systems of organizations like the IMF and the World Bank are based on quotas that reflect the economic strengths of their members. The current quota formula is more than 15 years old and doesn’t reflect the status quo. Developing countries today make up the largest contributions to world growth.

Developing nations need to unite their voices. By coming together, they can exert their influence and bring a more diverse set of views to the table that reflect their own unique challenges. By so doing, they can make faster progress and negotiate better outcomes for themselves. One of our main aims at G-24 is to coalesce and coordinate developing nations’ views on emerging issues in the global arena.

Finally, having been left low on the international agenda for so long, developing countries now need to improve their technical capacity and bring in the right people and skills to make a case for their challenges on the global economic stage.