Minister Singh urges global community to deliver on longstanding development financing commitments

Georgetown, Ministry of Finance, July 12, 2021: Senior Minister, Office of the President with Responsibility for Finance Dr. Ashni Singh today participated in a virtual 2021 United Nations High Level Political Forum Official side event organized by the Sustainable Development Solutions Network (SDSN) and the Government of Antigua and Barbuda.

The participating governments and institutions were addressed at the opening by Professor Jeffrey D. Sachs who highlighted that the Small Island Developing States (SIDS) had special vulnerabilities characterized by the fact that they are small, not diversified with related volatility, remote with the implications of huge costs of transport and vulnerable to climate shocks including rising sea levels, floods and droughts. Importantly he emphasized that in revamping development assistance there is need for more resources and the need for rich countries to ‘put their umbrella over the multilateral lending agencies’.

Professor Sachs noted that on a per capita basis the SIDS – with the exception of a couple – have contributed almost nothing to global climate change, but they are disproportionately afflicted by the consequences of global climate change that they did not cause. He described this as imposed costs of greenhouse emissions of the rest of the world on SIDS. He expressed his hope that the revamped solution would be practical, scaled and exactly directed for the countries in need and expressed anticipation for the upcoming G20 meeting in Bali 2022 for key decisions.

Following the first panel discussion on Measuring Multidimensional Vulnerability post COVID-19 and staying on track for Agenda 2030, Minister Singh led off the second panel discussion on International Financing to address Multidimensional Vulnerability in SIDS by outlining the case of Guyana being a small country below sea level. He emphasized the fact that over 80 percent of the population live on its low-lying coastal plain which is over 1 meter below sea level and where over 60 percent of productive activity occurs. He, therefore, stressed on Guyana’s extreme vulnerability to climate change.

At this point, Minister Singh referenced Professor Sachs’ earlier point that Guyana especially was disproportionately contributing to the fight against climate change through the preservation of its pristine rainforest. He then noted that in 2005 devastating floods cost 59 percent of Guyana’s GDP and indicated further that recent floods have seen entire communities under flood waters for several weeks. The Finance Minister alluded to the fact that sister countries in the Caribbean have also experienced hurricanes, earthquakes, volcanos which in some cases caused devastation equivalent to over 200 per cent of GDP being lost.

The Minister stated emphatically that Guyana is therefore strongly in favour of the arguments made regarding the limitations of per capita income as a primary determinant for eligibility. He also voiced Guyana’s support for the incorporation of vulnerability dimensions within the consideration for eligibility for development resource, further noting that while the conversation has to go beyond mere Official Development Assistance (ODA) there is need for recommitment on longstanding commitments already made including the 0.7 percent Gross National Income (GNI) for ODA as well as on climate financing – both commitments yet to be realized.

The Finance Minister further emphasized that the global community should not be distracted from delivery on scale of resources including those promised 50 years ago as well as new resources. This was especially important in small economies whose entire productive base could be wiped out by a pandemic or natural disaster and therefore would have no taxable production.

He therefore agreed that factors contributing to productive diversification needed to be examined, emphasizing that, “Even as we consider questions of mobilizing development support etc. we also to have revisit the question of the development model that is being implemented or is being considered for many of these countries because the reality is we have to find a way to diversify ourselves out of this extreme vulnerability that arises from a single productive sector generating all of our economic output and generating all of our Government revenue. That is not an easy question to answer. It’s a question that policy makers have been wrestling to answer for a long time but it’s a question that we have to redouble our efforts to find an answer.”

The Minister also emphasized that even as regional integration is pursued and despite this having much value to add, ‘we do have to take a long hard look at how we address the peculiar vulnerabilities that are faced by our countries and in particular this challenge of productive diversification’.

He then further concluded that, “It is very important that we don’t allow ourselves to be distracted with new conversations which might divert our attention from ensuring the delivery of commitments that we’ve already made, that we already embraced as a global community and that we are still struggling to deliver on.”

Despite Guyana becoming an oil producing country last year, Government, since the commencement of its new term in office on August 2, 2020 has been steadfast in its approach to ensure that the country’s economy is diversified from the reliance on any one sector and has been pushing to strengthen other productive sectors such as agriculture and tourism to add value and resilience in the case of future shocks and to avoid the Dutch Disease.

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