French president Emmanuel Macron and a number of other world leaders have issued an open letter stating that private finance will need to play a larger role in tackling global poverty.

The letter, which was also signed by UK prime minister Rishi Sunak and US president Joe Biden, was sent ahead of a meeting in Paris to discuss global development needs.

According to the world leaders, private finance needs to play a significant role in supporting global development and reducing poverty by offering cheaper and more flexible loans.

In a landscape of mounting debt, high food and energy prices, and low and middle-income countries in recovery from the economic impact of the pandemic, the letter said government loans and grants would not be enough to spur development.

Emphasising that development banks need to take responsible steps to do much more with existing resources and to increase financing capacity and private capital mobilisation, the letter stated that the world’s development banks must “work together as an ecosystem” with other public agencies “and, where appropriate, with philanthropists, sovereign wealth funds, private finance and civil society” in efforts to deliver the greatest impact.

The letter continued: “No country should have to wait years for debt relief. We need greater and more timely cooperation on debt, for both low- and middle-income countries. This starts with a swift conclusion of solutions for debt-distressed countries.”

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