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DSG/SM/1648
12 October 2021

Small Island States Need Better Access to Finance, Immediate Solutions for Liquidity Challenges, Deputy Secretary-General Tells Round Table on Post-Pandemic Recovery

(Delayed for technical reasons)

Following is the text of UN Deputy Secretary‑General Amina Mohammed’s video message to a round table on small island developing States’ access to finance for a resilient post-COVID-19 recovery, on 7 October:

Honourable Gaston Browne, Prime Minister of Antigua and Barbuda; Honourable Christopher Coye, Minister of State, Belize; Honourable Aiyaz Sayed-Khaiyum, Attorney General and Minister of Economy, Fiji; Right Honourable Wendy Morton, MP; Excellencies; Ladies and Gentlemen,

I welcome this opportunity to focus on the needs of small island developing States (SIDS) — who have been particularly hard hit by the economic fallout from the COVID-19 pandemic.  Access to finance remains critical for SIDS to respond to the pandemic, address climate challenges and ensure the Decade of Action delivers on the ground.  We need immediate response to address liquidity challenges in SIDS and make structural changes to the international development finance and debt architecture to allow sustainable and inclusive development.

To attend to large financing needs caused by external shocks, SIDS have had, for so long, to resort to costly loans.  As a result, they have seen their debt burdens increase and have to choose between investing in building resilience or paying back their creditors.  As their debt rises, so does the risk of climate-driven disasters such as hurricanes and droughts.  To escape this cycle, we must measure and address the disproportionate vulnerability of SIDS to external shocks.

As highlighted by the Secretary-General in his report on Our Common Agenda, eligibility for resources should no longer solely depend on unidimensional measures such as gross domestic product (GDP) per capita.  And as recommended in his 2021 report on the SAMOA pathway, a Multidimensional Vulnerability Index should be finalized in 2022.

The Multidimensional Vulnerability Index should account for the intersecting and complex challenges faced by all developing countries — to demonstrate the relative vulnerability of each country.  Its development must be followed by the adoption and use of the Multidimensional Vulnerability Index by international financial institutions and donors.  This will allow us to target structural and external vulnerabilities to create the fiscal space necessary to build resilience and sustainable development.

At the same time, SIDS have demonstrated their ability to incubate solutions, suggesting new and enhancing existing financial instruments to guide recovery and increase resilience.  The SIDS Compact addresses options and issues such as liquidity; debt cancellation for highly indebted countries; a wider range of mechanisms such as hurricane and disaster clauses; and multilateral debt workout mechanisms.

Progress is also being made to create climate action debt swaps, which have great potential to simultaneously addressing debt sustainability and financing climate action.  This round table provides further opportunity for dialogue on these innovative solutions to ensure a change of gear as we embark on the decade of action.

Ladies and Gentlemen,

The Glasgow climate clock is counting down.  SIDS cannot be expected to pay for climate disasters alone.  The entire international community must invest in their future and urgently needed climate action.  The sooner we invest, the more climate change is mitigated and the more we can minimize the loss and damage in SIDS.

The Secretary-General is deeply committed to ensuring that COP26 [Twenty-sixth Session of the Conference of the Parties to the United Nations Framework Convention on Climate Change] delivers tangible and concrete benefits on adaptation and resilience for SIDS and other countries in special situations.

Excellencies,

SIDS are a touchstone for our success on the Sustainable Development Goals and the climate commitments.  We must work together to ensure no one left behind.  I trust that this second round table will yield fruitful discussion and will bring us closer to our common solutions.

Thank you.

For information media. Not an official record.