As prepared for delivery.
It is a pleasure to be at this CARICOM-UN High Level Pledging Conference on Building a More Climate-resilient Community precipitated by the disasters unleashed on the Caribbean following Hurricanes Irma and Maria. We have heard about the staggering impact of these hurricanes on the affected countries and territories in the presentations made so far, and the huge financial cost that it will take to build back better and to build a climate-resilient Caribbean.
It is in this context that I am honored to have the opportunity to make some remarks and to call for a new financing architecture to build resilience as articulated by the CARICOM Secretary General this morning. This event provides an invaluable opportunity to discuss how the international community can improve international financing arrangements for the Caribbean – and all climate-vulnerable states – as well as scale-up innovations in lending and insurance for the region. We in UNDP are happy to be supporting this event. There are many good proposals on the table as discussed yesterday. Going forward, we need to translate them into action recognizing that we are dealing with a “new normal” and we cannot wait even for a moment to build climate resilience. At the outset, let me say that UNDP is fully committed to playing its part to support you.
The recent disasters in the Caribbean have laid bare the deficiencies of the international development finance architecture for countries like those in the Caribbean. As stated at yesterday’s technical consultations and repeated today, some of the most severely affected countries are ineligible for concessional finance or ODA. It is inconceivable to expect small vulnerable countries that have been almost entirely destroyed to rebuild on the back of non-concessional finance in a region already challenged by the loss of correspondent banking relationships due to de-risking.
Simultaneously, we need a facility to support middle-income and high-income SIDS vulnerable to both climate-related and economic shocks with access to concessional finance. Recent efforts to enable Jordan and Lebanon to access concessional finance from multilateral lenders show this can be achieved. These efforts must be expanded to include highly vulnerable countries not on an exceptional basis, but as the established way of doing business as articulated by the CARICOM Secretary General this morning.
We need to expand the delivery of ‘risk-informed’ finance through innovations in lending, such as hurricane clauses and countercyclical loans. Indeed, there is much we can learn from Grenada in terms of using these countercyclical instruments. Prime Minister Mitchell, I am sure you will be speaking to the experience of Grenada in using this innovative instrument.
Many Caribbean countries are severely indebted. High debt can be made worse through heavy reconstruction costs. Innovative solutions such as a multi-creditor debt-for-resilience swap could be considered. UNDP and UNECLAC are exploring this and we invite others to be part of this effort so we can have a win-win situation of debt swaps for climate action.
We support the CARICOM Chair’s proposal to establish a “Fund of Funds” for SIDS that will help pool and blend finance from multiple sources for transformative programs. While we look to the future, we need to ensure that we focus now on the adequate and effective financing of reconstruction and recovery that does not further indebt Caribbean countries and territories. UNDP supports solutions that, where appropriate, mix national and international financing, public and private.
At the same time, the private sector has an important leadership role in helping to provide the much needed financing for the region for reconstruction and to help build resilience across the Caribbean, and in other climate-vulnerable countries like those in the Pacific. For example, the insurance industry must play a critical role. From UNDP’s perspective we see three critical areas for the industry, including: (i) the need to widen risk knowledge; (ii) review existing insurance mechanisms and coverage, including expanding innovative insurance mechanisms; and (iii) risk-informed reconstruction. UNDP is already innovating in the area of insurance and resilience of public natural goods with partners.
I know the challenges you face in picking up the pieces after these unprecedented disasters and I want to assure you that we are with you every step of the way. I also believe that it is a time of opportunity and I am also inspired by your cogent and compelling vision to become the world’s first climate-resilient region. To achieve this, we need a broad-based partnership of all stakeholders. In this regard, I am delighted with the presence of so many partners and I urge you to pledge to support the Caribbean to build back better and to build long-term resilience. We in UNDP are committed to this long-term partnership, will continue to stand steadfast with the Caribbean, and know you will do the same.