Press release

Seychelles Highlights Financing priorities for Future of SIDS Development with Global Partners

July 16, 2015

Minister Jean-Paul Adam has chaired a high-level panel on ‘Small Island Developing States and the post-2015 development finance agenda’ that brought together global partners and SIDS representatives to discuss the specific financing challenges being faced by the small economies of island states, in the margins of the Third Financing for Development (FfD3) conference being held in Addis Ababa, Ethiopia.

Speaking of the experience of Seychelles, the Minister for Finance, Trade and Blue Economy said that there was a need to “multiply the tools available for SIDS to drive [development] transformations”.

The Minister called for the implementation of new and varied methodologies in measuring development:

“By only measuring one thing [GDP per Capita] – we risk devaluing the SDGs. We need a broader measure of progress. This is particularly obvious for SIDS. But it is in fact evident that it is valid for all.

“In SIDS, relatively high GDP per capita ratios hide the high cost per capita that we pay for development. “We don’t have economies of scale. We have a narrow resource base. We have a narrow tax base.”

Minister Adam added that,“Increases in per capita income in SIDS do not increase resources available for development. In fact they limit them because access to concessional finance are linked to GDP per capita. Therefore we should not be surprised when many SIDS are unwilling graduates to middle income or high income status.”

The Minister further explained that Seychelles was advocating the adoption of a Vulnerability Index so that each country can be evaluated and be given access to development resources based on a more comprehensive understanding of their specificities.

The Minister also highlighted that the Blue Economy was an opportunity to diversify SIDS economies and build new shared opportunities. He underlined the challenge of debt for SIDS and emphasised the need for specific mechanisms to be identified to facilitate the restructuring of SIDS debt while simultaneously also providing more affordable financing for SIDS. He illustrated two financing models that Seychelles was proposing including the Seychelles debt for adaptation swap as well as the proposals to launch ‘Blue Bonds’ to mobilise financing for Seychelles fisheries management plan.

The panel was convened by the United Nations Development Programme (UNDP), represented at the event by Helen Clark, UNDP administrator, and UNDESA, represented by UN Under Secretary General, Gyan Chandra Acharya, who is also the special representative for Least Developed Countries, Land Locked countries and Small Island Developing States. The panel also featured The Hon. Cristina Duarte, Minister for Finance of the Republic of Cabo Verde, the Hon. James Fletcher, Minister of Sustainable Development, Energy, Science and Technology, and the Hon. Aisake ‘Eke, Minister of Finance of the Kingdom of Tonga.

Amongst the issues discussed by the panel of island state representatives, were the existential threat of climate change, the fact that progress could be easily wiped out by natural disasters and climate events as illustrated by events in the Caribbean and the Pacific, economic dependency on the Eurozone and the ripple effects of their crisis, debt sustainability and the high cost of energy amongst other island specific challenges.

Following the SIDS event, Minister Jean-Paul Adam also participated in a high-level panel discussion on climate changed themed “Financing Africa’s Food Security and Agricultural Growth in a Warmer World” where he shared Seychelles’ experiences in developing the Blue Economy as a source of development for the country, and spoke of government measures to ensure the long term sustainability of the fishing industry which include the pursuit of in-country value addition and stringent controls over the exploitation of fish stocks. The Minister also spoke of the need for each country to independently investigate suitable models of mobilising resources and capital that are suitable for their context. One example, which he outlined, was the debt-for-adaptation swap. He also took the opportunity to brief the participants on the Blue Bond initiatives that Seychelles has been pursuing as one such example. The blue bonds initiative is a novel method of financing, which will help in tapping into capital markets for funds, which will be targeted towards mariculture development and capacity building. The Minister explained that the repayment of the bond would be a general obligation of the Government of Seychelles, which may be supported by specific revenue from the fisheries sector.

The event was convened by Oxfam International, in collaboration with the African Union Commission and the Pan African Climate Justice Alliance.