New research has shown that SIDS have spent more than 18 times as much on settling their debts compared to what they gain from climate finance. This research has shown that many SIDS will have to direct 15 to 40 percent of their government expenditures to debt servicing between 2020-2023, including Jamaica, Belize, Cabo Verde, Papua New Guinea, Dominican Republic, and Grenada. According to a recent report, SIDS’ public debt is expected to remain above 70 percent until 2025.
Therefore, SIDS policy makers, governments, and creditors are putting debt sustainability on top of their priorities in order to allocate more resources into climate financing and support SIDS in their fight against climate change crisis. Governments and creditors are developing and adapting strategies and policies that enhance SIDS’ resilience to debt and climate shocks through the creation of innovative domestic financing mechanisms, and “debt for climate swaps”. More investments and funding are being pursued in the areas of instant access to non-debt creation and into the multidimensional vulnerability index to identify possibility for debt relief.
Image: REUTERS/Ricardo Rojas
Read the rest of SIDS Bulletin issue 65 here.