WASHINGTON, DC — FINANCE Minister of St. Vincent and the Grenadines, Camillo Gonsalves, has criticized international lending agencies for treating small island states like those in the Caribbean as undeserving of financing.
Speaking with SKN Newsline during the International Monetary Fund (IMF) and World Bank Spring Meetings, Gonsalves emphasized that it is unethical to pit the poor against the vulnerable and urged lenders to reconsider their approach.
“All of us are developing countries,” Gonsalves said. “ And in the face of the new and emerging crises that we're facing, new and emerging challenges, particularly climate, but also related to globalization and the interconnectedness of all of our countries, you can't say that you want to pit vulnerable St. Vincent against poor Burkina Faso. It is an immoral and an unjust way to allocate development resources."
Gonsalves’ comments reflect ongoing efforts in the Caribbean region to challenge international lenders, including the IMF and World Bank, for classifying territories in the region as high-income states. This classification hinders their ability to obtain concessional financing for rebuilding efforts after hurricanes and other natural disasters.
"We are going to oppose that classification," he asserted.
When asked about his optimism regarding potential changes in reclassification, Gonsalves acknowledged that the IMF has shown a willingness to consider vulnerability. “They've they've created new measures, like their Resilience and Sustainability Trust, which is predicated on the idea of vulnerability,” he said. "Now, it still has many flaws, which is why a lot of countries have not taken it up in the Caribbean.”
Gonsalves also noted that while the IMF continues to show a willingness to address vulnerability, the World Bank has not approached the issue with the systematic and structured approach necessary to incorporate vulnerability into decision-making.
“That's why the Commonwealth has been doing a lot of work on, for want of a better word, a vulnerability index.,” he said.
IMF Managing Director Kristalina Georgieva confirmed that the organization is reviewing programs and mechanisms that would allow more territories to qualify for funding. Many Caribbean territories have been evaluated based on Gross National Income, which has been a point of contention for many regional leaders.
“Antigua and Barbuda has been also advocating a similar,slightly different, but very similar vulnerability measure. And I think there is movement in that direction, but there is also a lot of resistance at the higher levels.” Gonsalves added. “And this is why entities like the Small States Advocacy Champions are important, because if we keep beating the drum, we have gotten some movement, we've gotten some recognition, but now the issue is not to recognize the issue of vulnerability, but to make it a scientific calculation that is the basis of our debt sustainability analysis.”
Gonsalves stressed the importance of making vulnerability a scientific calculation that underpins debt sustainability analysis to achieve equitable financing for all developing countries.
