Context:

At the heart of the global climate conversation are the Small Island Developing States (SIDS), whose very existence is imperilled by the disproportionate impact of climate change. Despite contributing less than 1% to global greenhouse gas emissions, SIDS face devastating consequences. IIED’s most recent research Sinking islands, Rising debts shows that the mounting frequency of climate-induced disasters not only threatens their environmental integrity but have devastating economic consequences. SIDS constitute two-thirds of countries experiencing the highest relative annual losses from such eventscreating a ripple effect that manifests in to escalating debt. Over 40% are nearing or already in debt distress, and an alarming 70% surpass the debt-to-GDP sustainability threshold of 40%. Six SIDS have debt-to-GDP ratios exceeding 100%.This debt crisis impacts more than just finances, it limits investment in social services, social protection and resilience-building, exacerbating poverty and inequality. Furthermore, it hampers progress towards global Sustainable Development Goals (SDGs) by diverting funds to debt servicing.

For the SIDS, breaking free from this vicious cycle is not just an economic imperative but a question of survival. The interconnected challenges of climate change and debt require a concerted, multifaceted response.

Strategic Advisory Group (SAG) and Design Process:

To address these urgent needs, the Strategic Advisory Group (SAG) was established, co-chaired by H.E. Prime Minister Gaston Alphonso Browne of Antigua and Barbuda and H.E. President Mohamed Muizzu of the Maldives. The SAG is tasked with guiding the creation of the ‘Global SIDS Debt Sustainability and Investment Support Service’.

The design process of the Support Service was launched at COP 28 with the SAG’s formation. Through the concerted effort of the SAG, comprising of SIDS finance and environment ministries, key global, regional and local financial institutions, and civil society organisations, the design has been shaped by collaborative dialogue sessions, engaging a spectrum of stakeholders in a transparent, inclusive process.

Through a series of deliberative dialogues with stakeholders across various sectors, the SAG has been gathering input to shape an effective and actionable design for the Support Servicewhich aims to deliver a comprehensive response combining debt sustainability, future protection, investment in resilience, and legal support for SIDS. The Support Service is proposed to be launched at the SIDS 4 Conference in May 2024 and integrating it with the agreement and implementation of the next SIDS Programme of Action(2024-2034) that will be adopted at SIDS4 in Antigua and Barbuda.

Objective of the Side Event:

This event serves as a precursor to the official launch of the Global SIDS Debt Sustainability and Investment Support Service at the SIDS 4 Conference. We aim to present the draft design document of the service for stakeholder feedback, endorsement, and commitment. The side event will be an opportunity to gather further inputs that will refine the service's design, ensuring alignment with both national and international goals, and reinforcing the SAG’s strategic vision. Stakeholders will engage in panel discussions to review the service structure, governance, financial mechanisms, and integration with the SIDS new programme of action.

Our goal is to foster a dialogue that will culminate in a robust financial compact tailored to the unique needs of SIDS, ensuring their journey towards resilient prosperity and equitable participation in the global financial system.