Pacific Island Countries will continue their push to convince multilateral and development financing partners to expand the definition of ‘fragility’ to include climate change vulnerability.
This was one of the key messages from the just concluded Forum Economic Ministers (FEMM) meeting in Suva last week.
Samoa’s Finance Minister, Sili Epa Tuioti told journalists in Suva this fight is not only for the Pacific but other Small Island Developing States (SIDS) that are greatly impacted by climate change.
“We are going to write to both the World Bank and International Monetary Fund. We are also going to alert Small Island Developing States in other regions that we need to work together to make sure that the multi-lateral organisations fully appreciate and understand where we are coming from. This discussion will continue for a while. We certainly have the opportunity of annual meetings with both the World Bank and IMF later on this year and certainly will advocate that this issue is put on the agenda.
Minister Tuioti said Pacific ministers sent strong messages to the World Bank during a roundtable discussion at the FEMM meeting.
“There were strong messages from Finance Ministers that we need to look at some of the vulnerabilities of the Pacific Islands Countries to disasters and to economic shocks. Some of you may recall the impact of financial crisis in 2008 and the discussion on how one natural disaster can drastically impact on GDP growth of countries. For us, it’s about advocating that the definition of fragility should include an understanding of situation that we face each day.
“The fact remains that many of our member countries have no buffer or resources to tap into when disasters strike. So we had that very interesting sort of discussions with the World Bank here – just basically putting that strong message to them, said Samoa’s Finance Minister.
A similar strong message was voiced by Cook Islands Finance Minister, Mark Brown.
“It was encouraging to hear from some of these agencies the recognition of the vulnerability factor for Pacific island countries. What we would like to push is, other than the numerical account, if they use an index for assessing vulnerability is to look at population size of Pacific countries in comparison to other parts of the world. We have very small and very spread out population.
“They have to take into consideration the economies of scale that don’t exist for us but do in other large countries as a measure of vulnerability. The lack of diversity in the economy and debt stress levels are some measures to assess the vulnerabilities of Pacific countries, said Minister Brown.
While FEMM ministers noted the work done by the World Bank on expanding the definition of ‘fragility’ they want the Bank to further refine their work to include the drivers of vulnerability, particularly natural disasters and adverse economic shocks.
They are calling on the World Bank and other international financing institutions to consider these issues when making operational decisions affected Pacific Island Countries and other Small Island Developing States.
Another concern raised at the regional ministerial discussion last week was proposed changes to the IMF/WB debt sustainability framework that Ministers say could impact the level of grants to Pacific and other SIDS from multilateral development finance institutions.
The proposed framework is designed to guide the borrowing decisions of Low Income Countries (LICs) in a way that matches their financing needs with their current and prospective repayment ability, taking into account each country’s circumstances.
Pacific Economic Ministers stressed the need for the proposed debt classifications and thresholds in the framework to fully capture the impact of natural disasters and adverse economic shocks on the economies of the Pacific and other Small Island Developing States.
They’ve requested the chair of FEMM to write to the Managing Director of the IMF and the President of the World Bank, copying representatives from other Small Island Developing states in New York and Washington to outline these concerns. They’re asking for more consultations at the country level on changes to the debt sustainability framework before they are presented to the Board.
Pacific Island Countries are expected to raise their voice on the issues relating to vulnerability at the 2017 Spring and Annual meetings of the IMF and World Bank on 21-23 April in Washington.