Caribbean needs urgent access to financing to meet new sustainable development goals | Jessica Faieta

Big Money Stack. Finance Concepts

Jessica Faieta

NEW YORK, United States, Wednesday July 15, 2015 – Having lived and worked in four Caribbean countries I have witnessed first hand how these vibrant societies with enormous potential share serious challenges: from severe exposure to natural hazards and external financial shocks to slow economic growth and high debt. However, since the vast majority of the Caribbean Small Island Developing States (SIDS) are ranked as middle-income countries—with per capita income levels above the international financial eligibility benchmark—they are shunned from receiving development financing.

But the world has a unique opportunity to change this and help improve the lives and the future aspirations of Caribbean women and men.

This week, high-level political representatives are gathering in Addis Ababa, Ethiopia, to adopt an international agreement setting out how the post-2015 sustainable development agenda will be financed.

The traditional international standards, based on national per capita income averages, are inadequate measures of these countries’ sustainable development needs, according to our new UN Development Programme (UNDP) titled “Financing for Development Challenges in Caribbean SIDS: A case for review of eligibility criteria for access to concessional financing”, which we are launching this week in Addis. As a result, Caribbean countries have very limited access to concessional financing and Official Development Assistance (ODA), with the exception of Haiti, which is classified as least developed country.

It is time to respond to the call from Caribbean SIDS to review current criteria to access financing. Clearly, if left unresolved, this situation will thwart SIDS’ sustainable development pathways.

We are calling for improved standards that take into account “multidimensional progress” indicators, or well-being measurements beyond income alone. These include people’s inadequate access to essential services such as safe water, sanitation and health as well as citizen insecurity (crime and violence), unemployment, climate vulnerability, widening income gaps and continuous emigration of highly educated and trained people. Other problems such as poor infrastructure to conduct business and attract foreign direct investment must also be considered.

Financing for development criterion must take into account that Caribbean countries face substantial problems, despite ranking higher than other SIDS in the Human Development Index, UNDP’s composite measure of health, education and income. The 2015 Millennium Development Goals targets have not been achieved in relation to poverty, income inequality, education, health, access to basic services, environmental sustainability and gender equality and women empowerment.

Some of our top recommendations include increasing lending to regional and sub-regional development banks—which are more in-line with the Post 2015 sustainable development agenda. Strengthening the role of these development banks is also an important way to boost resilience in the Caribbean, or the ability to absorb external shocks without major social and economic setbacks.

The Caribbean and countries hosting its diaspora should also improve arrangements and cross-border financial transactions to facilitate remittance payments as well as investments. Poor debt credit rating has helped deteriorate foreign investment in Caribbean countries.

Let us use this conference in Addis as a unique opportunity to respond to the call from Caribbean SIDS to review current criteria for accessing concessional finance. Current barriers need to be lifted so the Caribbean countries and other SIDS can pave their way towards sustainable development.

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Jessica Faieta

Jessica Faieta is United Nations Assistant Secretary-General and UNDP Director for Latin America and the Caribbean.