As Global Citizens, we all want to make a difference in the world. One of the missions? Defeat Poverty. A simple enough goal: ensuring everyone has enough resources and opportunities to live a decent life. 

Achieving this mission requires collaboration from key countries, international leaders, and policymakers. And then it gets a little complicated — enter terms like G7 and ODA, debt pause and IDA, and the average Joe is left scratching their head trying to make sense of it all. So, let’s break down these need-to-know terms so you can better understand how to play your part and take action to defeat poverty today.

HOW WE AIM TO DEFEAT POVERTY

At this year’s Global Citizen Festival, held in New York’s Central Park on September 28, we will use our platform to call on global leaders to take action to make the world a better place. The Global Citizen Festival is not just a music festival; it’s a gathering of Global Citizens, artists, activists, world leaders, philanthropists, and corporate leaders, all with one collective mission: end extreme poverty now. You can join this global community and be part of the solution through actions on our app, like signing petitions, calling your political representatives, and participating in challenges.

THE TOP ASK? INCREASED CONTRIBUTIONS FROM THE G7

• G7 (Group of Seven): An organization of seven of the world’s largest advanced economies, including the United States, United Kingdom, Germany, Japan, France, Italy, and Canada.

The G7’s actions have far-reaching implications for global poverty reduction because the G7’s financial commitments and policy decisions can significantly impact the quality of life for millions of people worldwide. For example, this year, the G7 must contribute an additional 20% to 25% to the IDA. 

• IDA (International Development Association): The World Bank program that empowers the world’s most vulnerable countries through low-interest loans and grants.

Increasing funding for the IDA will provide crucial support for projects and programs that boost economic growth and reduce inequalities in the world’s poorest countries. In particular, we call for increased financing for nutrition, crisis prevention, preparedness, and response.

WE WON'T STOP THERE: ADDITIONAL ASKS FOR GLOBAL LEADERS 

These additional requests may seem complex, but they have a direct impact on improving the lives of the world’s poorest citizens. We call for: 

1. Increased Aid from Key Countries: Germany, France, the UK, and Nordic nations must increase their aid contributions to more vulnerable countries to improve education, healthcare, and infrastructure, leading to a better quality of life. The goal is to maintain, return to, or exceed 0.7% of the Gross National Income (GNI) allocated to Official Development Assistance (ODA).

• GNI (Gross National Income): The total income earned by residents of a country, including both what they earn domestically and abroad, minus what foreigners earn within the country.
• ODA (Official Development Assistance): Financial aid provided by developed countries to support the economic development and welfare of developing countries.

2. Debt Pause Clauses: Multilateral banks, such as the World Bank, should introduce debt pause clauses. 

• Debt Pause Clause: A provision allowing the temporary suspension of debt repayments, often used during crises to relieve indebted countries.
• MDB (Multilateral Development Bank): A financial institution created by a group of countries that provides financing and professional advice for the purpose of development.

The number of countries eligible for these pauses should be increased, and the eligibility criteria should be broadened to cover a broader range of external shocks. These debt relief measures are important because they give struggling countries a breather during economic crises, allowing them to focus on recovery and development rather than repaying loans.

• Debt Relief: Measures to reduce or refinance debt to make it easier for the borrower to repay. In the context of international development, this often involves forgiving part of a country’s foreign debt.

3. Support for the Africa Development Bank’s Hybrid Capital Mechanism: Japan and the United Kingdom should support the Africa Development Bank’s hybrid capital mechanism. This is the first-ever Special Drawing Rights (SDR) mechanism at a Multilateral Development Bank (MDB).

This type of financing mechanism can help fund projects that generate both financial returns and social benefits, such as improved access to clean water and renewable energy.

• Hybrid Capital: A form of capital that combines debt and equity financing elements. In the development context, it supports projects with financial returns and social impacts.
• SDR (Special Drawing Rights): An international type of monetary reserve currency created by the International Monetary Fund (IMF) that supplements member countries’ existing reserves.

4. Development of New Tax Mechanisms: The international task force led by France, Kenya, and Barbados must agree to develop new mechanisms to tax highly polluting and undertaxed sectors.

• New Tax Mechanisms: New tax mechanisms may focus on collecting taxes from under-taxed sectors like digital services or highly polluting industries to generate revenue for development projects.

Taxing these industries will make more funds available for development projects, encourage companies to adopt cleaner practices, and benefit the environment.

TAKE ACTION AND EARN TICKETS

Now that you have a breakdown of all these crucial terms, you can freely take action with a better understanding of the policies and mechanisms at play. Knowing how each term contributes to the fight against poverty enables you to engage more effectively and make informed decisions. We can push for meaningful changes and create a more equitable world. Download the Global Citizen App, join the movement, and work together to Defeat Poverty, Defend the Planet, and Demand Equity. Your actions, no matter how small, can have a significant impact.