LONDON, England -- A high-level group of Commonwealth ministers will travel to Washington DC from 7 to 8 October 2013 to meet heads of leading international financial institutions to make a case for the urgent need to address the debt and financing challenges of small states.
The group will be led by St Kitts and Nevis Prime Minister Dr Denzil Douglas. He will be joined by minister of finance of Jamaica Dr Peter Philips, minister of finance of Samoa Faumuina Luiga, minister of finance of Seychelles Pierre Laporte and minister of finance of Tonga Lisiate ‘Aloveita ‘Akolo.
They are scheduled to meet the top leadership of the International Monetary Fund, The World Bank, and the Inter-American Development Bank.
Commonwealth Secretary-General Kamalesh Sharma said the group’s objective is to raise awareness of the unique challenges faced by small states in accessing affordable finance, and managing and reducing their debt. They will also propose practical ways to address their concerns.
“Small states face many challenges when it comes to managing and servicing debt, and there are particular obstacles that prevent them from accessing concessionary finance. They also tend to be vulnerable to crises and natural disasters. The Commonwealth is acutely conscious of the need for practical action to address these issues, particularly by the international financial community. We seek renewed resolve and innovative approaches to build the economic resilience of small and vulnerable states, with attention paid to global inclusion and development,” Sharma said.
The secretary-general said international financial institutions need to review the criteria used to determine the wellbeing of small states. He noted that the current yard sticks do not take into account the unique vulnerabilities of small states such as remoteness, exposure to shocks, small population size and limited options for economic diversification. All of these factors result in disproportionately large challenges for these countries in accessing financial resources.
Studies have shown that many small and vulnerable states are unable to meet their debt obligations, even to international lenders. This situation is particularly acute in the Caribbean, where several public debt ratios are in excess of 90 percent of gross national income. As a result such countries are finding it difficult to meet obligations such as reducing poverty and providing basic and necessary public goods.
While in Washington DC, the group will urge the international community to pay special attention to debt and financing challenges in small states and to provide assistance for building their resilience.
Following the meetings in Washington DC, the group will produce a report that will be submitted to the Commonwealth Heads of Government Meeting in Colombo, Sri Lanka in November 2013.