Secretary General of the Commonwealth,
Secretary General of the Conference,
Ladies and gentlemen,
As we come together in Samoa, I think the first point we need to emphasise is that the majority of SIDS provide enviable success stories. The majority of countries that have actually graduated from 'Least Developed Country' (LDC) Status are actually SIDS.
We take the opportunity to salute the achievements of our hosts, Samoa, for their success in graduating.
However, the question of graduation also masks a middle income trap.
What is the experience of SIDS in this middle income world? Quite often they find they are penalised for their own successes.
SIDS that are categorised as middle income often find themselves turning to commercial rates of loans to maintain their development trajectory.
In 2008, Seychelles faced the financial crisis head on with a debt to GDP ratio of 183%- at that time the highest ratio in the world. There are some other examples of SIDS who at the point of graduation have manageable rates of 30-40% of GDP, and are currently faced with debt to GDP ratios of 90 to 100%.
And why do SIDS take on this debt burden, some people may ask?
The reality is that because SIDS are the most exposed to global processes than any other type of economy. We are the first responders to pressures within the international financial system.
We are also the first to feel the pressure of global environmental considerations- chiefly climate change.This exposure to such processes makes us vulnerable in unique ways. This vulnerability undermines our development.
But it also presents an opportunity- an opportunity for us to build resilient island economies- and an opportunity for the world to also better get to grips with forces which often spiral into wider system failures.
I have often said that what will work in an island economy can serve as a guide for what sustainable development can look like in wider societies.
So far, our development efforts have treated symptoms- not the causes of economic ill-health or lack of sustainability in general. And for SIDS this is largely because we have failed to recognise the core factors that underpin our vulnerability.
A Vulnerability Resilience Profile is a key tool in better understanding the challenges faced by SIDS and hence addressing these issues.
We have recognised the core fragility of SIDS since the 1994 Barbados Plan of Action (BPOA) and this has been reinforced by the Mauritius Strategy of Implementation in 2005 (MSI). Despite the best efforts of SIDS we have yet to truly adopt a reference on vulnerability.
I warmly welcome the efforts by the EU and the Commonwealth to develop an appropriate tool to identify the vulnerability of SIDS
The financial investment made by the European Union with the technical support of the United Nations Department for Economic and Social Affairs is so critical in developing the VRP.
The underlying methodology of the VRP is unique and at the same time extremely relevant as it spans the whole spectrum of sustainable development; by analysing vulnerability and resilience parallel with the three pillars of sustainable development i.e. economic, social and environmental, it provides for a very robust method.
But for us to succeed in the long term we have to ensure that this vulnerability tool is used when taking decisions about development resources. I think this is key.
I want to make clear- countries such as Seychelles do not just necessarily want aid- we do not want just handouts.
But we need access to development mechanisms that recognise our fundamental vulnerability.
For example, if a country such as Seychelles seeks to invest in infrastructure development such as Ports or airports- these are projects that are potentially commercially very attractive- they generate revenues for our country. But in terms of any loan that we may seek to take, we have to keep in mind that we have a population of only 90,000.
While many seek to emphasise our GDP per capita in highlighting that we are not development priorities, they fail to recognise the cost per capita which is even higher for such major infrastructure projects. This is why SIDS- specific VRPS are important.
If a country such as Seychelles seeks credit for such projects, we will be quoted commercial rates that will make the project unsustainable.
Other middle income countries that have large populations can often raise credit on international markets at a cheaper rate because of their large domestic markets and their diversified economies.
An example where a project has been implemented in Seychelles that has got past this middle income challenge is when we have built our Fibre-optic internet cable connecting us to the African mainland financed in partnership by the Seychelles government, the Seychelles' private sector, two telecom companies Airtel and Cable and Wireless, the EU and the European Investment Bank. The EIB provided affordable financing and also providing a 'bridging grant' that allowed the project to get off the ground.
However such projects should become the norm when it concerns key infrastructure that can reduce SIDS vulnerability.
Seychelles is pleased to be one of the countries to have piloted the VRP approach.
But the real difference for SIDS development will be achieved when we mainstream this within global development architecture.
I therefore call on all partners to place vulnerability as part of the criteria to assess projects and their viability in SIDS.
I would also like to conclude by saying we should not misinterpret the message of SIDS on this issue. We are vulnerable. We face unique challenges. But we are far from weak. We are prepared to be innovative in addressing our development challenges. We are prepared to try things that many others may not find politically expedient. We are able to act fast and bring real improvements to the lives of our populations, if we are given the right tools to do so.
We thank the co-organisers for bringing this key issue to Samoa- and I thank my fellow leaders and our international partners for working to ensure that this does not end in Samoa but leads us to further progress for a fair deal for SIDS.