Small states call for concessions

Delegates from small states called for international recognition of their vulnerabilities and targeted responses to their specific challenges at the recent Commonwealth Conference on Finance for Development in Small States in Barbados on 25-26 March.

The meeting, which was attended by senior officials from Ministries of Finance and representatives from national, regional and international organisations, was aimed at examining the emerging FfD framework which will shape policies that determine the availability of development finance and prepare small states to effectively participate in the UN’s Third International Conference on Financing for Development (FfD) in Addis Ababa, Ethiopia, in July 2015.

Delegates stressed that the conference in Addis Ababa will be a landmark for determining the allocation of resources, and identified a set of criteria and considerations that need to be reflected in the international FfD framework to ensure their countries are not put at a disadvantage.

Commonwealth Deputy Secretary-General Deodat Maharaj said: “Whilst small states are making great efforts to generate domestic finance, the common challenges they face, which include small populations and therefore narrow tax bases, rising debt, large trade deficits, underdeveloped private sectors and a lack of diversification, mean they are going to struggle to raise the funds required to achieve their development goals without international assistance.”

He added: “One of the main concerns voiced at this conference is the continued use of GDP to measure eligibility for financial assistance.

“It is acknowledged that many small states are middle income countries, yet they are significantly different from larger middle income countries because of their disproportionate vulnerability to external shocks. This should be taken into account when making decisions on grants and aid.”

Representatives from small states identified four key issues for inclusion in the FfD framework. These include debt burden and a country’s need for climate change finance. They also stressed the need for international acknowledgement of the vulnerability of small states, and enhanced capacity in areas such as infrastructure and policy development.

Emphasising the Commonwealth’s commitment to helping small states fulfil their development potentials, Mr Maharaj said: “In addition to a series of FfD briefings, which we have held with UN country representatives in New York, we will continue to respond to the needs of small states with practical measures such as stocktaking of available concessional funding, providing policy support for ICT improvements and supplying information about useful products and services.”