Seychelles has benefitted as chair of the Small Island States, says Minister Adam, but need new mechanisms to address vulnerabilities
October 21, 2016
Seychelles participated in the annual meetings of the International Monetary Fund and the World Bank in Washington early October, which reunites ministers of Finance around the world.
For the past three years, Seychelles has presided over the Small Island Forum, (SSF) created by World Bank to defend the interest of the small island states as well as other countries with a population of less than five million people. As chair of the SSF, Seychelles has emphasized on the need for better support in sustainable development and climate change for small island states.
Minister Adam stated that “we cannot have the same mechanisms in place to address these challenges; we need to have new mechanisms to address our vulnerabilities. As small island states we feel the impact first.” Minister Jean Paul Adam was talking to media representatives after his visit to Washington to provide details of his working visit.
According to Minister Adam, an action plan was formulated around seven points which will permit small island states address their challenges and constraints, including ensuring access to finance on the basis of vulnerability, predictability of affordable financing, debt sustainability, simplification of access to climate finance, capacity building and technical assistance, support for diversification of Small States economies including through the development of the Blue Economy and support for Small States to access international capital markets in an affordable manner.
Minister Adam said that Seychelles has benefited a lot as chair of the SSF; ‘World Bank now has a more open approach towards small states’. The start of projects such as the South Western Indian Ocean Fisheries Project, SWIOFISH is an example; a project that, according to Minister Adam, really looks at the development of the Blue Economy.
Minister Adam also attended the Finance Ministers Meeting on the 6th October 2016, during the IMF World Bank Meeting at the headquarters of the International Monetary Fund in Washington. This year’s focus was on topical issues arising from the international response to the Panama Papers as well as practical action to enhance Commonwealth access to climate finance and new financial instruments to help countries manage climatic shocks.
The main concerns were about uncertainties associated with BREXIT, effect of BREXIT on member states, as well as other developments in the world, such as presidential elections in America, how climatic shocks and the impact of banks pulling out of some of the most vulnerable nations in the Commonwealth.
Professor Lord Stern, one of the world’s leading expertssaid efforts needed to “ramp up. Trillions of dollars had to be invested in tackling climate change and that the world was not doing enough.”
During the forum, Ministers acknowledged the Commonwealth’s role in paving the way for the COP21 commitments, signed in Paris last December. But continued threats of climate change to small states still remains. Lord Stern called for a change in the criteria used when giving money to countries tackling climate change. He said it should be based on vulnerability, sustainability and development.
Minister Adam said that Seychelles presided over a working group to support the position of small island states and has used a lot of the Commonwealth reports especially its perspective on vulnerability and to develop local economic capacity especially for the Blue Economy Concept.
Access to financing is still a main concern for small states and Minister Adam said that the idea of introducing a Blue Bond is an initiative being spearheaded by Seychelles to help reduce the cost of premium financing and reinvest in priority areas. “The Blue Bond is a means to mobilise an affordable guarantee to get financing from World Bank and other partners and reduce the cost through the Development Bank of Seychelles for a more affordable financing for entrepreneurs and fishermen in the Blue Economy”, stated the minister.
“As a small island state, we have to recognise, understand and see that we have no control over the world’s economy, but try and adapt and develop programmes that have the interest of our people at heart”, concluded Minister Adam.
A memorandum of understanding was signed to set up the Commonwealth Trade Finance Facility (CTFF).The Facility, will be based in Malta, and is expected to make US$ 100 million available over a three year period to small states that cannot get the money needed to break into international markets.