PM Holness urges reform of development financing for small island states

Prime Minister Dr Andrew Holness has called for reforms to the international development financing system to better address the needs of vulnerable small island economies.

“We’re not asking for special provisions, but that the risks that we face are properly priced into the considerations for financing,” Holness said.

He was responding to a question regarding the fundamental changes needed in international financing and investment to unlock opportunity, resilience and prosperity for small states during the opening ceremony of the Joint Forums at the Commonwealth Heads of Government Meeting (CHOGM) in St John’s, Antigua and Barbuda, on Monday.

Holness acknowledged that some positive shifts are already taking place.

“Now, there are changes already under way in international development financing, which we should acknowledge, including catastrophe bonds, including guarantees and other instruments that are used to de-risk loans,” he stated.

However, the Jamaican prime minister emphasised that more needs to be done to support small island economies.

“We must say, and say very clearly, that the international development financing system should pay close attention to the development needs of small island economies, particularly countries that are susceptible to natural disasters,” Holness maintained.

He pointed to Jamaica’s economic journey as a prime example of why the international financing system needs to be reformed.

“From Jamaica’s perspective… we have done everything textbook. We are the classic case of fiscal discipline. That should be considered when financing is being considered… when concessions are being considered. In other words, countries that are demonstrably fiscally frugal and manage their affairs well should be rewarded,” the prime minister affirmed.

He further noted that the system should reward fiscal discipline with greater access to financing.

Holness emphasised that there is a distinction between assessing a country’s vulnerability and pricing the risk associated with a loan.

“Now, there will always be risks… and we have to price those risks. But we must also consider the vulnerability of the country and look at the projects themselves, [including how they] can help the country overcome vulnerability in the future and ensure that they get on a path to growth,” he maintained.

Holness explained that Jamaica’s goal is to secure financing that will help convert its fiscal stability into economic growth.

“Fiscal stability is not an automatic pathway for growth. There has to be deliberate instrumental approaches to ensuring that countries like Jamaica get access to financing that considers our vulnerability and our particular challenges,” the prime minister added.

The Commonwealth Heads of Government Meeting, which runs from November 1–4, brings together leaders from across the Commonwealth to discuss shared priorities and chart a course towards collective progress.

- JIS

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