PM Anwar calls for overhaul of global financial system, criticises Global North’s exploitation of Global South

Malay Mail

KUALA LUMPUR, Dec 2 — Prime Minister Datuk Seri Anwar Ibrahim called for international financial reforms, emphasising that the current system benefits the Global North at the expense of the Global South.

The worsening of the climate crisis, conflicts, economic stability and debt in the Global South resulted from an international system that was not designed to be inclusive and created policies that were made without full participation of the Global South.

“Today’s financial system still carries the DNA of the Bretton Woods institutions, serving the Global North at the expense of the Global South. Developing nations face worse market access and higher borrowing costs despite having similar risk profiles,” Anwar said.

In his keynote speech at the Madrid-based forum Common Action Forum 2024, here, the prime minister highlighted that the International Monetary Fund’s (IMF) practices have contributed to such disparity in the world.

“The system refuses to change.

“During the Covid pandemic, the IMF released US$650 billion (RM2.9 trillion) in Special Drawing Rights. However, two-thirds of that amount flowed to wealthy nations, leaving those in greatest need with the scraps.

“This is how global governance fails — by entrenching inequality instead of dismantling it,” he asserted.

Anwar said that the pandemic pushed 120 million people into extreme poverty, marking the first global rise in poverty in twenty years which damned almost a tenth of the global population in extreme poverty and threatening nearly 600 million lives to live in hunger by 2030.

The prime minister advocated for a stronger, more inclusive form of multilateralism in the international arena, one that prioritises equitable development and enforces robust measures to combat crimes against humanity.

Having this would also allow for effective decisive actions on global challenges like climate change, he said.

Further, the international trading system was in dire need of change, too, as unfair trading practices, protectionist measures, and non-tariff barriers have gone rampant and undermined developing nations, Anwar underlined.

“International trade must not only be free, but it must be humane and equitable,” he stated.

Moreover, he also acknowledged that intellectual property frameworks have been an obstacle to technology transfers.

To address this, he called for a more robust framework to expand access to technology while still incentivising innovation as a balanced approach would bridge the technological divide while rewarding innovation.

“We must act boldly to create the future our world so desperately needs,” he concluded.

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