What are the benefits of a SIDS strategy?

The strategy crystallises promises made at COP26 in Glasgow to prioritise the interests of SIDS as the most climate-vulnerable countries. It reflects the UK’s desire to stake out a distinctive post-Brexit approach to global leadership, and it represents a commitment to development from a government criticised for the decision to scale back its ODA contributions from 0.7% to 0.5% of GDP.

As the world becomes more volatile and SIDS edge further towards the climate crisis precipice, the strategy appropriately focuses on supporting SIDS to adapt to the impacts of climate change, improve access to finance, prevent biodiversity loss, and build diverse and resilient economies and institutions. While sceptics may wonder what is in it for the UK, the strategy promises a wide range of benefits for a global constituency, including:

• small islands themselves, which are uniquely vulnerable to climate impacts and require tailored development strategies from donors and development partners
• the UK, which can potentially exert greater geo-political influence with SIDS on-side, given that they collectively comprise 20% of votes in the UN
• global governance, by pushing multilateral institutions to be more responsive to the special needs of SIDS, thereby rendering them more resilient in a world of increasing geopolitical tensions and agendas running counter to liberal norms
• the planet as a whole, by building the stock of global public goods.

These benefits were the crux of RESI’s recent written submission of written and oral evidence to the IDC.

One recent example of the UK and SIDS shaping the international environment for the better is Vanuatu’s remarkable success – supported by the UK – in advocating for the UN General Assembly to request an advisory opinion from the International Court of Justice on responsibility for climate change.

Yet SIDS share structural constraints that differ dramatically to those faced by bigger developing countries, and therefore require greater assistance relative to their size. Their small size, remoteness and insularity, combined with acute exposure to tropical cyclones, coastal inundation and other hazards – as well as risks related to small, open economies, such as Terms of Trade dislocations – all mean that SIDS are especially sensitive to negative external shocks. This vulnerability does not imply weakness or a lack of development, rather that developmental gains can be wiped out suddenly and on a greater scale than in larger states.

How can the UK support SIDS?

The UK SIDS strategy clearly matters, but funding has not yet met the scale of the challenge in scope or in speed. To avert climate catastrophe in small islands, the UK must accelerate its efforts. It can do this in four ways:

1. Climate justice

The world is becoming even less hospitable to the interests of SIDS: geopolitical upheaval, the closing down of development niches and accelerating climate change all weigh far more heavily on small islands than elsewhere. They are the proverbial canaries in the coalmine of global warming, facing its most immediate and destructive impacts – to the extent that some SIDS are facing potential ‘state death’ despite having little to no responsibility for climate change. Yet the international community has summarily failed when it comes to SIDS’ central demand of limiting global warming to 1.5°C above pre-industrial levels. It is critical that the UK continue to support efforts to set up a Loss and Damage fund and work with other donors to scale up assistance to help SIDS and their communities cope with the impacts of climate change.

2. Continuing to refine the UN’s Multidimensional Vulnerability Index (MVI)

International development finance architecture has been designed by and for larger countries, with predictions based on their assumptions about a state’s capacity to drive development. There are now promising signs of long-overdue reform of multilateral institutions, but these do not take into account the needs of SIDS. The UK Government has supported the development of the UN’s Multidimensional Vulnerability Index (MVI) and should continue to push for its endorsement at the UNGA and application by MDBs in eligibility for – and allocation of – concessional finance, and should continue to support ongoing dialogue between stakeholders to continue refining the index

3. Accessible climate finance

SIDS face daunting challenges in accessing the climate finance they are entitled to. This is partly due to size and state capacity when it comes to navigating funding applications with insurmountable barriers to access – in terms of drafting technical proposals etc. The UK, as the largest contributor to the Green Climate Fund (GCF), must put pressure on the Board to cut red tape and find ways to streamline the climate funds so they serve the interests of their most important clients. But accessing finance is just the start: SIDS face huge capacity gaps that cannot be simply filled with external consultants. A new model of technical assistance that seeks to build long-term domestic capacity, is needed so that climate projects stand the test of time.

4. Long-term debt sustainability

SIDS’ levels of external public debt have risen sharply since the COVID-19 pandemic, with some experiencing high levels of debt distress. SIDS find themselves in a vicious cycle: unable to access ODA or cheap financing, they borrow at much higher rates. When a shock hits, not only do they lose their investments, but they must pay back these loans at the same time as responding to the crisis – requiring them borrow more, at even higher rates, to recover. This increases the overall debt level, making it even harder for SIDS to invest in building resilience to the next shock. The G20 initiatives to address debt problems have proved to be insufficient and inadequate, particularly for SIDS. Instead, SIDS require a new deal on long-term debt sustainability, supported by the UK Government.

The Fourth International Conference on SIDS (‘SIDS4’), taking place next year in Antigua and Barbuda, is a crucial staging post. It will arguably be the most important of all the conferences held by SIDS since the Earth Summit in 1992, as they seek to chart a way forward in a global order that – in some cases – threatens their very existence.

The UK has a crucial role to play in advocating for SIDS as a group and supporting joint diplomatic efforts through the Alliance of Small Island States (AOSIS). Moreover, because of the unique shared history between the UK and many small island countries, as well as sizeable diasporas within the UK itself, it is uniquely placed to facilitate this kind of action on their behalf and in partnership with them.