We know money is far from neutral and that currencies are not created, or treated, equally. [1] In the face of our international currency hierarchy - which keeps the US dollar fixed on top - the panel explored how countries in the Global South can find credible alternatives to today’s unfair global financial landscape. In this context, local currency financing is gaining momentum as a policy solution to build a more equitable financial architecture. [2]
Dr Redge Nkosi, Executive Director of Firstsource Money and Monetary Reform International, set the scene and spelt out the structural inequalities in the international monetary and financial system, and went on to emphasise the need to build domestic capital markets as a counterweight. Dr Mzwanele Ntshwanti, from the Institute for Economic Justice, spoke to their work on debt crises and emphasised the role of credit rating agencies in increasing the burden on Global South countries, and the impact on human rights and economic justice.
Dr Pepukaye Bardouille, Director of the Bridgetown Initiative and Special Adviser to Prime Minister Mia Mottley, shared insights from their progress in Barbados, and argued that while local currency financing might be more expensive in the short-term, the long-term benefits, including helping to establish a country’s future economic autonomy, are incalculable, and stressed the importance of needing a vision to bring others with you.
Our fourth and final speaker, Fernanda Balata, Associate Fellow at the New Economics Foundation, highlighted their research on ‘The G20 at a Crossroads’. [2] And acknowledged Canadian Prime Minister Mark Carney’s recent speech at the World Economic Forum in Davos, to note that ruptures, like the end of the 'rules-based order' - including the reliance on stable financing - can also be opportunities for systemic change.
As the panel’s chair, and our Head of Research, Dr Danisha Kazi, summarised, while local currency financing is certainly not a silver bullet, it is one of many new tools we can use to actively dismantle current extractive systems, and bring about the changes to the international financial architecture, we all need.
