International Debt Architecture and LiquidityMarch 29, 2021 FORUM: Financing for the Development in the Era of COVID-19 and Beyond Initiative MEETING: Meeting of Heads of State and Government on the International Debt Architecture and Liquidity SPEAKER: Hon Gaston Browne, Prime Minister of Antigua and Barbuda & Chair of AOSIS
Heads of States and Governments,
Thank you for the invitation to address this important gathering at such a critical time and for allowing me to share the perspectives of Small Island Developing States.
When my delegation addressed you last year in the context of a similar meeting, I was optimistic that the necessary relief would have been provided to SIDS. Mainly because many of you had spoken on the need to pay particular attention to our small states.
Disappointingly, there now appears to be a question of “inertia,” since, as an international community we have failed to implement SIDS specific recommendations that would address the ongoing crisis.
It is without any doubt that SIDS are facing an unprecedented challenge: three contemporaneous crises – first, the ongoing health emergency; second the economic devastation; and third, the negative effects of climate change.
COVID-19 has highlighted the urgent need for international cooperation by states and all actors to tackle the pandemic in a spirit of global solidarity and shared responsibility.
This would mean that vaccines should be allocated fairly and equitably and considered a global common good.
The equitable distribution of vaccines would bring the pandemic to a halt, and would enable a faster, fairer and more equitable social and economic recovery and enable SIDS to stay on track to realize the Sustainable Development Goals.
I am convinced, and we have heard many times over the past year in meetings after meetings that this unprecedented economic crisis, requires a global economic response that is innovative and tailored to meet the needs of specific groups of countries.
A more tailored global response should be to prevent a liquidity crisis from turning into a solvency crisis, and a global recession becoming a global depression.
To ensure this, better coordinated fiscal, monetary, and anti-protectionist initiatives are urgently required.
The ambitious fiscal stimuli that were adopted by developed countries should be complimented by the availability of much needed capital to SIDS.
Once again, I put on the table before you some policy propositions of SIDS and as that these be prioritized:
- The IMF has said it will mobilize all of its available resources to combat the crisis, it is for this reason that I call for the allocation of Special Drawing Rights amounting to no less than $500 billion
- I urge G20 finance ministers to extend the DSSI until health experts declare that the pandemic has been fully contained. The DSSI should also be expanded to include all SIDS
- Private creditors must be required to participate in the DSSI, it is politically untenable and morally incomprehensible for official creditors to provide debt relief and additional financing to our countries and the private sector refuses to participate, while at the same time are demanding debt serving by countries who are unable to do so given the level of economic stress they are facing.
- Credit rating agencies should also be urged to participate and be given guidance on the dangers of credit rating downgrades to countries who may wish to access the DSSI
- I also call for a waiver of this year’s debt repayment for SIDS as a short-term measure and the consideration of debt forgiveness for SIDS as part of a long-term solution.
- Additionally, any debt incurred as a result of the pandemic should be assessed in the context of the pandemic and be treated at a zero % interest rate.
- I further call for the application and use of vulnerability methodologies when considering the allocation of financing for SIDS, this will enable middle income SIDS to be able to access concessional and grant financing
- Finally, given the practicality of innovative financing instruments such as debt swaps, hurricane clauses, risk assessment modeling, blue bonds and sustainable infrastructure investments, it is imperative that these tools be further explored and developed as financing and recovery options for SIDS.
The positive environmental benefits of the pandemic have shown us what is possible, our actions – or inaction – now will shape human existence for generations to come.
So, while the pain of COVID-19 is devastating, it has created a policy window for climate action that can be advanced through an increase in climate financing, a re-commitment to meeting the Paris Goals and ambitious NDCs.
To enable a full and inclusive recovery, we must push for an all-hands-on deck approach, we must explore every option. The risk to SIDS is far too great and failure should not be an option.
Timeworn social, economic and environmental policies should be no more. This is an opportunity for a global re-set, to chart a way forward for the sustainable development of developing countries; this is our opportunity for a recovery that is inclusive, equal and just – and a recovery that will build resiliency for small island developing states.
When we left the rubble of world war two the most powerful nations found ways to carve out support for corners of the globe to be financially rescued to recover. The Marshall plan saved Europe, we need similar bold action for a global recovery.
The Great Recession stretching from 2008-2010 was surmounted when as a community of nations, we came together to address the deficiencies that led to near collapse of the global banking system, we did it before and here is an opportunity to do again and do it better by leaving no one behind.
I thank you.