Financing Resilient Prosperity In Small Island Developing States

Small Island Developing States (SIDS) are diverse, but all experience acute vulnerability. Many are still reeling from the global financial crisis (GFC) and Covid-19 pandemic, with sluggish growth, insupportable debt burdens and insufficient – even declining – access to stable sources of financing. As global temperatures breach the 1.5°C threshold in the Paris Agreement, accelerating climate change will hit them faster and harder than any other group of nations. SIDS comprise almost 20% ofUN members, but – aside from those that are members ofthe African Union – have no collective or regional representation at the G20. Resolving these momentous challenges, in an increasingly perilous world, is vital. This policy briefproposes four recommendations for improving access to concessional finance, financial resilience and debt sustainability in SIDS that the G20 is well-placed to support: 1. The G20 should increase SIDS representation by creating a ‘G20-SIDS committee’ tasked with enhancing access to concessional resources for this vulnerable group of countries, and lead the way in normalising the use of the UN Multidimensional Vulnerability Index (MVI) to supplement GNI per capita measures with consideration of structural vulnerability in their own development assistance programmes; 2. G20 states that are members ofthe Green Climate Fund (GCF) Board should seek to create a minimum annual funding allocation for SIDS, the most climate-vulnerable states; and 3. The aforementioned G20-SIDS committee should work with the Paris Club to propose new measures to build confidence in the Common Framework, and increase eligibility and uptake from SIDS to improve long-term debt sustainability and increased fiscal space for resilience investments. Meaningful movement on any or all of these issues could unlock important secondary developmental gains and, crucially, help support SIDS to protect the global public goods of which they are custodians: ocean resources and biodiversity.