Excerpt and Photo from thecommonwealth.org
The year 2024 provides a crucial opportunity to accelerate action and implementation strategies to ensure resilient fiscal sustainability and stronger risk mitigation arrangements against exogenous shocks for Small Island Developing States (SIDS). The EU Copernicus Climate Change Service evidence shows that global warming during February 2023 to January 2024 reached 1.52C. This suggests growing existential threat for SIDS with potentially frequent and more severe hurricanes. Mauritius, for example has already experienced three successive cyclones in 2024.
SIDS constitute rich cultural heritage and diversity spanning across different regions in the Caribbean, the Pacific, and Africa. SIDS have strong global interlinkages based on their heritage, culture, economic and geopolitical locations. Many are actively engaged in building resilience for adaptation and mitigation against their existential threats. Belize and Malta, for example have been diversify their tourism industries, whilst Mauritius has been undertaking economic diversification.
General government debt accumulation in most SIDS is significant. During the covid-19 pandemic, SIDS registered a sharp debt increase in terms of absolute values and as a share of GDP leading to debt distress levels in some SIDS economies. Consequently, SIDS have taken the lead in pursuing innovative financing instruments that reduce public debt and create the necessary fiscal space for essential investments, including economic diversification, especially those related to climate resilience.