Small Island Developing States (SIDS) have become more vulnerable since the Covid-19 pandemic reared its head and “hanging above all their heads like the proverbial sword of Damocles are two eminent dangers – unsustainable debt and climate change”.
That is according to Prime Minister Gaston Browne, Chairman of the Alliance of Small Island States (AOSIS), who is pleading for help for countries like Antigua and Barbuda, noting that the hurricane season is approaching while economic hardships are worsening.
Browne was speaking at the virtual meeting of heads of state and government on the international debt architecture and liquidity, hosted by Canada.
“Financing for development in the era of Covid-19 and beyond is the most urgent preoccupation that small states now confront,” he said.
“ I remind that, in February, Secretary-General Guterres highlighted to the UN General Assembly that the territories of small island developing states could disappear within our lifetimes, due to rising sea levels which is unacceptable while the problem is within our power to fix.
“Yet, disappointingly, the international community has failed to implement specific SIDS recommendations that would address the ongoing crisis.”
According to him, SIDS are confronted with three major challenges, “coping with extraordinary public health demands from the pandemic; managing the social and development impacts of its economic devastation; and preparing for the enlarging effects of climate change”.
Moreover, he expressed concern that the upcoming hurricane season could perpetuate the spread of Covid-19.
“The Caribbean SIDS are potentially a few months away from their next catastrophic hurricane and now run the risk of the possible calamitous spread of Covid among unvaccinated individuals clustering in shelters,” he remarked.
In addition, he explained that many small islands are in “danger of collapsing from a massive economic sclerosis, arising from the deep economic wounds created by Covid, to include the attendant debt crisis.”
The AOSIS leader called for several considerations and accommodations to be made by leaders of developed nations.
He urged G20 leaders – those of the world’s largest economies – to “consider providing debt relief to emerging market and developing countries with unsustainable debt burdens, so that they can secure fiscal space to combat the virus, protect the vulnerable, and secure a green and inclusive recovery”.
Browne continued, “When G7 leaders meet in June, they should consider agreeing to extend the World Bank’s debt service suspension initiative beyond 2021 and to expand its beneficiaries to include SIDS, many of which are now no longer high- or middle-income countries because of the economic impact of Covid-19.”
Browne also called on major creditor nations, international financial institutions and donor governments to consider instituting a waiver of this year’s debt repayment for SIDS as a short-term measure, and the implementation of debt forgiveness and restructuring as part of a long-term solution.
He said the World Bank’s funding terms “should be expanded to include vulnerable SIDS, whose economies were decimated by Covid and are now faced with unsustainably high debt service ratios and debt overhang”.
Browne also emphasised the “importance of using vulnerability as a criterion for eligibility for concessional financing and not per capita income which has precluded vulnerable SIDS from accessing critical concessional loans and grants”. He added, “The implementation of a multi-dimensional vulnerability index is an imperative and should no longer be delayed.”