Comments to Zero Draft of Outcome
Input to Preparatory Process
Input to the Objectives and substantive theme of the Conference
A/C.2/68/L.67 (Para 13) - Invites participants in the meetings of the Preparatory Committee to send
written inputs on the objectives and substantive theme of the Conference to the
Secretariat in advance of the first meeting of the Committee, and invites the
Secretariat to make them available electronically;
Input to the overarching theme - Genuine and durable partnerships
The overarching theme of the Third International Conference
on Small Island Developing States in 2014 shall be “The sustainable development of
small island developing States through genuine and durable partnerships”, and also
decides that the Conference shall serve as a forum to build on existing successful
partnerships as well as to launch innovative and concrete new ones, to advance the
sustainable development of small island developing States;
World Bank Group support to SIDS and Small States
The World Bank tailors its assistance to the unique challenges of small states (including Small Island Developing States – SIDS), drawing on an array of financial products, and knowledge and learning services. Tailored country and regional programs help small states assess social and structural sources of vulnerability, address underlying policy and institutional weaknesses, and respond to and manage shocks. In addition, the World Bank works closely with small states to generate and share in-depth analysis on specific local challenges.
Twenty small states (countries with populations of 1.5 million or less) are currently eligible for funding from the International Development Association (IDA), the Bank’s fund for the poorest. Thirteen of these countries have access to IDA under the small islands economies exception, with three of them having gained access during the IDA16 period. These countries have access to IDA funding in recognition of their vulnerability to economic shocks and natural disasters despite having GNI per-capita levels on average four times the IDA operational cutoff (and in some cases as high as six times the operational cutoff).
Over time, in recognition of their particular challenges, the World Bank has enhanced its financial support to small states:
- First, as part of its Performance Based Allocation (PBA) system, IDA provides a minimum base allocation to each country. For small states, this minimum base allocation constitutes the majority of IDA’s financial support. The minimum base allocation was increased from SDR1.1 million per year in IDA14 to SDR3 million per year in IDA16. As a result, IDA’s annual per-capita allocation to small states during IDA16 was on average twice that for non-small states. As part of the IDA17 discussions, there is consideration for further increasing the minimum base allocation to SDR4 million per year.
- In IDA16, the terms of IDA funding for countries under the small island economies exception were changed from blend to regular IDA credit terms, which resulted in longer maturities and grace periods, as well as a lower interest rate.
- Beyond core IDA funding, small states are eligible for funding under the regional IDA program. Provisions have also been made to allow for leveraging significantly more financing from the regional program compared to larger IDA clients, with national co-financing capped at 20% of annual allocation for small states. In IDA16, several regional projects ranging from aviation investment to broadband connectivity are being funded in the Pacific and the Caribbean; further raising IDA’s financing contribution in these small states in addition to country allocations.
The World Bank is supportive of initiatives to help small states mitigate the impact of external shocks. While much of the financial assistance provided to small island states is targeted at addressing longer-term development needs, other innovative financing windows in the Bank provide complementary resources to respond rapidly and effectively to sudden, unexpected needs, such as the IDA16 Crisis Response Window (CRW) and the recently established Immediate Response Mechanism (IRM).
These instruments are only the latest in a range of sovereign risk management products provided by the Bank to small states. Examples include weather derivatives against drought risks, call options to help cap the price of maize imports, regional risk pooling schemes (the Caribbean Catastrophic Risk Insurance Facility, the Pacific Catastrophe Risk Insurance Pilot Program); and other innovative approaches to leverage concessional funds for adaptation to climate change and mitigation of the impact of natural disasters (the Program for Climate Resilience, Agriculture Risk Insurance, SIDS DOCK support).
Resilience building, including disaster preparedness and mitigation investments, is critical to help protect small states against exogenous vulnerabilities. Given the high propensity for natural disasters, a development policy operation with a Catastrophic Risk Deferred Drawdown Option (Cat DDO) can be critical to rapidly respond to a natural disaster and restore economic activity. The Cat DDO instrument, which is available to IBRD-eligible countries, can provide immediate liquidity in emergency situations caused by natural disasters and catastrophes. In addition to being a source of bridge financing while other resources are being mobilized, this instrument can support countries’ efforts to enhance resilience and capacity to manage natural hazard risk.
Technical and advisory services represent an important component of the Bank’s work with small states to produce tailored solutions and generate lasting impact. The World Bank works in partnership with small states as a global connector of practitioner knowledge, a broker of development solutions, and a facilitator of capacity development. The Small States Forum (SSF)—the annual gathering of Finance Ministers and Central Bank Governors from small states in conjunction with the World Bank/IMF Annual Meetings—provides a platform for small states to discuss common challenges, learn from each other, interact with development partners, and forge new partnerships. Since the first meeting in 2000, the SSF has covered a wide variety of topics central to small states development challenges, including, trade; remittance flows; climate change; food and energy security; the impact of the global recession; and sustainability of small states’ development and growth. A number of successful projects and initiatives have emerged as a result of the SSF discussions.
Technical and advisory services to small states are often "embedded" into World Bank operations and cover a broad range of issues, including expanding and improving service delivery for health and education; enhancing the effectiveness and efficiency of public spending; debt and macro-financial vulnerability; PFM reform and strengthening statistical capacity; improving investment climate and private sector development; building resilience and developing options for scaling-up renewable energy and energy efficiency measures.
Technical and advisory services are also provided as stand-alone service and ad-hoc initiatives. These activities are often financed through trust funds and in partnership with other institutions or bilateral donors:
- Institutional Development Fund (IDF) enhances the delivery and implementation of World Bank programs by strengthening the capability of client institutions. Eligible IDF grant recipients include IBRD and IDA member countries or nonmember territories, their agencies or instrumentalities; nongovernmental organizations; agencies of the United Nations; international or regional organizations; and other public or private institutions acceptable to the Bank. Over the past decade, more than 60 country and regional grants supported institutional capacity building in on a broad range of areas, including PFM, procurement, and M&E.
- The South-South Experience Exchange Facility (‘South-South Facility’) is a multi-donor trust fund that the enables sharing of development experience and knowledge among World Bank client countries. This demand-driven funding mechanism is designed to respond quickly and efficiently to the needs of development officials and practitioners. It is particularly appropriate for small states, given the similarity of challenges they face and the need to received tailored assistance from small state experts. The large majority of small states have benefited from this expert exchange program, in a broad range of areas, including natural resources management, industry and trade, agriculture and fishery, finance, public administration, education, health and other social sectors.
- The Development Grant Facility (DGF) complements World Bank operations and advisory services by using grants to encourage innovation and catalyze partnerships. Two initiatives from small states received seed-funding from the DGF to start up their activities: the Small Countries Financial Management Centre and the Small States Network for Economic Development.
Additional information is available at www.worldbank.org/en/country/smallstates