At Ethiopia Conference, SG focuses on concessionary financing, debt
The necessity for concessionary financing, and the onerous debt of Caribbean Community (CARICOM) Member States were two areas of focus of the Statement by CARICOM Secretary-General, Ambassador Irwin LaRocque at the Financing for Development Conference in Addis, Ababa, Ethiopia.
The Secretary-General spoke on Thursday, the final day of the four-day United Nations (UN) Conference. He pointed to the graduation of CARICOM Member States out of concessionary development financing due to their classification as middle income countries, based on the criterion of GDP per capita.
The Community wishes to reiterate that continued access to multilateral and bilateral concessional financing, notwithstanding its members’ classification as middle income states, is critical to our sustainable development agenda. The criteria for concessional financing must not be based solely on GDP per capita, and must be changed to include the economic and environmental vulnerability of SIDS,” Ambassador LaRocque said.
The Secretary-General also addressed the high levels of indebtedness and extremely burdensome debt servicing which posed a serious challenge for CARICOM Member States.
It must be noted that a significant portion of the debt is due to exogenous shocks and from the reconstruction after natural disasters. According to the United Nations Economic Commission for Latin America and the Caribbean (UNECLAC), the economic cost of natural disasters in the Caribbean between 2000 and 2014 is estimated at US$30 billion. The World Bank estimates that the average annual natural disaster losses in the Caribbean is US$850 million, while in the Pacific the average is US$200 million per year. This underscores the fact that the Caribbean is one of the most natural disaster prone regions in the world.
It is not surprising that five (5) of our Member States are among the most highly indebted countries in the world, while ten (10) are considered as having unsustainable levels of indebtedness, with debt to GDP ratios ranging from 65-140%. Addressing this situation in a constructive and sustainable manner will allow our Region to build the resilience required to safeguard and consolidate their development gains,” the Secretary-General said.
At the Conference, representatives of governments, the private sector and civil society groups from around the world, looked at available sources of finances, and sought to direct resources to where they are needed most to promote economic prosperity, and improve health, education and employment opportunities while protecting the environment.