As prepared for delivery.
I would like to thank the Chair of the Small States Forum, Dr. The Right Hon. Keith Mitchell, Prime Minister of Grenada for the opportunity to address this important Forum. I would also like to acknowledge our hosts here at the World Bank. All of our thoughts are with our sisters and brothers in the Caribbean at this difficult time.
The recent weather disasters in the Caribbean show us that climate change is here. Extreme weather events such as hurricanes Maria and Irma are increasingly the “new normal”. Small states in other parts of the world are equally impacted and at risk.
As we are discussing here today how to step up development impact in small states we are seeing that these disasters have laid bare the deficiencies of the international development finance architecture for small states. This is not news to this Forum. Some of the most severely affected countries are not eligible for concessional finance or ODA from multilateral and bilateral development partners due to higher income per capita levels. It is inconceivable to expect small severely indebted vulnerable countries that have been almost entirely destroyed to rebuild on the back of non-concessional finance.
This has to change
I am pleased this issue is high on the political agenda at this year’s Annual Meetings. In the immediate-term, we lend our voice to calls for a facility to support middle-income and high-income SIDS vulnerable to weather shocks with access to concessional finance. Recent efforts to enable Jordan and Lebanon to access concessional finance from multilateral lenders shows that this can be achieved.
Over the medium to long-term, we need to look at how the financing arrangements of the past can be updated to reflect the new realities of small vulnerable countries. In particular, we need to look at how vulnerability can be used to determine eligibility for concessional finance. I am pleased that UNDP, the World Bank, Commonwealth Secretariat, the IMF and other international institutions are collaborating on technical work in this area and encourage all development partners to support this work and to look seriously at their recommendations.
We can also deliver finance in much better ways, to ensure it is ‘risk-informed’. Now is the time to look at how innovations in lending, such as hurricane clauses or countercyclical loans can be more widely used. High reconstruction costs combined with high debt levels mean that debt relief for affected countries must also be on the table. Other innovative approaches to tackling high debt, such as a multi-creditor debt-for-resilience swap could also be explored, and we would be pleased to work on ideas such as these with our partners.
We have an opportunity now to rebuild Caribbean islands as exemplars of climate smart development. These lessons will be applicable to other small states. To achieve this, we need a "surge" in finance, better policies and technology. For small states as a whole, we need to front-load and fast-track climate smart development over the next five to ten years. Improved access to concessional finance, blended finance arrangements and streamlined processes to access climate resources will all be needed.
Other innovative approaches to financing sustainable development in small states are also be needed. The UN’s recent Oceans Conference highlighted some of the many innovative ways small states are securing investment in a sustainable ocean economy, such as through impact investment and blue bonds. We need to scale-up and replicate successes. UNDP’s new report on Financing the SDGs in the Pacific island countries, published this August, explores opportunities to leverage more public and private investment in key economic sectors, such as the oceans, tourism and local private sector development. We thank Australia and New Zealand for supporting this analytical work and invite colleagues to look at the report.
Indeed, no one development agency has all the answers. We need sustained and coordinated efforts to deliver results. In this context, we warmly welcome the CARICOM Chair's proposal to host a high-level action oriented retreat in Grenada and offer UNDP’s support to this effort.
Finally, I would like to end by reiterating UNDP’s strong support for the important work of the Small States Forum. It is a platform that provides significant value-added; an opportunity for small states to come together to discuss common experiences and solutions, and ensure greater visibility on the international stage. For development partners, it is also providing a key forum for enhanced collaboration and to launch joint work. You can therefore count on UNDP’s continued support.