MANHATTAN, New York – BARBADOS Prime Minister Mia Mottley has called for a comprehensive reset in the approach of larger countries towards the global financial architecture, arguing that the current system is skewed against Small Island Developing States (SIDS).
From the lack of easy access to financing to the challenges of repaying loans at high interest rates, small island states are struggling to secure the necessary funding, especially to rebuild after natural disasters.
Mottley addressed the United Nations General Assembly, emphasizing that financial reforms are crucial for restoring trust and providing hope to people seeking equitable access to financing.
“Restricted access to capital, its disproportionately high costs barring us from doing that which we must, its inadequate scale, and the overwhelming burden of debt often imposed on us by circumstances beyond our control, these are all now combining to force governments in the world's poorest countries, and frankly, across many vulnerable middle-income countries, to devote more resources to debt service than to health and education, and in some instances, even infrastructure,” she explained.
The Prime Minister has been at the forefront of regional efforts to push for financial reforms in institutions such as the International Monetary Fund (IMF) and the World Bank. Both entities have faced mounting criticism for their approach to small states, especially those in the Caribbean.
Caribbean territories have long faced the financial burden of rebuilding after the impacts of climate change, with costs reaching millions. Currently, St. Vincent and the Grenadines, and Grenada are still recovering from the devastation of Hurricane Beryl, which caused widespread destruction across their islands.
“For far too many members of the human family, cold ground is our bed, and rock is our pillow. Too many go to bed with their bellies hungry, and too many may not even have a bed,” Mottley lamented.
“But if there is a failure to act with clarity of purpose, and if the political will retards progress on the front of the much needed reform within the international financial institutions, purely because heads of government do not speak to ministers of finance when they reach Washington, D.C., or their board directors, if there is a need for that to be dealt with, then my friends, there must be a commitment to be equal to the current challenges of member states if we are not to perpetuate the discriminatory practices that result in undermining the transformational opportunities that we need."
She added: "Depriving vulnerable countries from being able to access concessional income that is long enough to build the resilience to save lives and to protect livelihoods is unjust. And that is why we must remain focused."
Antigua and Barbuda’s Prime Minister, Gaston Browne, echoed these sentiments: “The international financial system is skewed, outdated, and unjust—punishing the most vulnerable while rewarding the already prosperous with favorable terms for their financial instruments. For too long, small states like mine have been shackled by debt we did not create.”
“Debt that arose from recovery spending on recurring disasters is beyond our control. We cannot achieve climate justice without addressing the structural inequities in international financial architecture. It is time to lift the burdens that keep us bound to the past and unable to invest in our future,” the prime minister said.
Browne pointed to the Small Island Developing States (SIDS) Debt Sustainability Support Service as a crucial mechanism that can provide tailored solutions using debt-for-climate swaps, debt relief, repurposing of Special Drawing Rights (SDRs), and carbon pricing funding to help break the cycle of unsustainable debt.
Chandrikapersad Santokhi, Prime Minister of Suriname, also underscored the challenges facing small states, noting that in 2022, low- and middle-income countries paid a record US $443.5 billion to service their external debt, as reported in the World Bank's International Debt Report 2023.
With the United Nations recently adopting the Multidimensional Vulnerability Index (MVI), leaders across the region are hopeful that this mechanism will be effectively incorporated into the operations of international financial institutions, allowing for fairer assessment and access to funding for vulnerable nations.
