Small island nations are at an impasse.
Under the onslaught of climate change, they must spend big to protect their communities from rising sea levels and dangerous storms.
But a major source of income, international tourism, has dried up due to the coronavirus pandemic.
So now they cry out to world leaders for help and relief.
“As small island developing states, we are struggling to stay afloat, literally and figuratively,” said Jerome Xavier Walcott, Minister of Foreign Affairs of Barbados. “We believe that a need for adequate climate finance amid the COVID-19 pandemic cannot be overstated. “
Barbados was one of many island nations to raise concerns this week at the United Nations. Their appeals targeted the World Bank and the International Monetary Fund. The annual World Bank-IMF meetings begin in two weeks.
Calls for debt relief have come from leaders in the Bahamas, Barbados, Dominica, Grenada, Maldives, Samoa, Solomon Islands, Vanuatu and other small island developing countries.
They said lockdowns put in place to fight the pandemic have driven incomes down, crippling national climate adaptation plans and reconstruction efforts after recent tropical weather disasters. Still, they insisted that adaptation spending must continue, as failure to build resilience to natural disasters would lead to economic hardship over time.
For example, the Pacific nation of Kiribati is planning to increase the elevation of its islands, while neighboring Solomon Islands say they are busy settling their maritime claims before sea level rise erodes its islands. land. Dominica has said it could spend up to 30% of its budget on hurricane-proof buildings and infrastructure.
Many of these countries have been successful in protecting their populations from the virus, as no cases of COVID-19 have been reported in nine Pacific island countries.
But this vigilance comes at a price.
“Such a success has only been and is only possible thanks to concerted action and strict measures, which further exacerbate our socio-economic crisis,” said Peter David, Minister of Foreign Affairs of Grenada.
The Group of 20 nations, or G-20, has organized a Temporary Debt Service Suspension Initiative (DSSI) that expires at the end of the year. Small island governments say this help is welcome, but not enough.
The Maldives says their climate planning has been crippled by the pandemic. His government has requested an extension of the DSSI until at least the end of 2021.
More help is needed, he said.
“The debt record of small island developing states like the Maldives is now clearer,” said Maldives Foreign Minister Abdulla Shahid.
“But debt suspension is only half the story for countries like ours,” he added. “We need structural change, innovative facilities and better and wider access to concessional finance. “
The IMF says it takes these governments’ warnings seriously.
Yesterday, IMF Managing Director Kristalina Georgieva called on the international community to reform global sovereign debt systems. In an article posted on the agency’s website, she and other IMF economists warned that several countries were at “high risk of debt crises,” especially small developing countries.
The IMF predicts that the global average debt ratio will have increased by 17% of global gross domestic product in the richer world, and by 12% of GDP in developing countries by the end of 2021. Currently, the burden The developing world’s debt is around 60% of GDP, while the developed world suffers from a debt-to-GDP ratio of over 120%. The global debt burden is now higher than it has ever been since the end of World War II.
The IMF has warned of skyrocketing debt even before the pandemic results in higher spending and lower income.
Yesterday the IMF released a report and made recommendations for the global “debt architecture”.
In a presentation of the report’s main recommendations, the IMF’s first deputy managing director, Geoffrey Okamoto, said the world had avoided “a systemic debt crisis” only because of record interest rates, l central bank intervention and emergency measures such as the DSSI. “This kind of support has saved the world time,” he said.
Okamoto said richer countries should do more, such as extending the DSSI “ideally for another 12 months” and restructuring bilateral debts.
He urged debtor countries to start talks with their creditors as soon as possible.
“Countries with unsustainable debts should not delay restructuring and open negotiations with creditors before the situation worsens,” Okamoto said. “Delaying only increases the costs, both economic and human. “
Small island governments say they are doing just that, adding that aid is needed for general debt repayment as well as climate finance, which has been made more difficult by the crisis.
Barbados commended the UK for doubling its contribution to the United Nations Green Climate Fund despite the pandemic. The Bahamas expressed gratitude to the dozens of bilateral donors and financial institutions who have helped it rebuild after the destruction caused by Hurricane Dorian last year.
Dominica thanked the contributors to its “climate resilience recovery plan”. And the Solomon Islands government publicly thanked Australia, New Zealand, Japan, China and the UN for their “generosity,” which Prime Minister Manasseh Sogavare said “will continue to be needed.”
Kenneth Darroux, Dominica’s foreign minister, said time is running out.
“The situation is dramatic. The situation is urgent. And we welcome any support that may influence the provision of adequate financial support in a timely and applicable manner, ”he said.
“Climate finance must be new, additional and predictable,” said Maldives Foreign Minister Shahid. “Adaptation is no longer something to be expected for the future. It is our daily life.
Reprinted from Climatewire with permission from E&E News. E&E provides daily coverage of energy and environmental news essential to www.eenews.net.