Pacific Islands Forum Secretariat Conference Centre,
5 – 6 April 2017
FEMM ACTION PLAN
The twentieth meeting of the Forum Economic Ministers was held at the Forum Secretariat Headquarters, Suva, Fiji on 5-6 April 2017. The Forum Economic Ministers Meeting (FEMM) was chaired by the Minister for Finance of Samoa, the Honourable Sili Epa Tuioti, and supported by the Secretary General of the Pacific Islands Forum Secretariat, Dame Meg Taylor.
2. The following Forum Member Countries were represented: Australia, Cook Islands, the Federated States of Micronesia, Fiji, French Polynesia, Kiribati, Nauru, New Caledonia, New Zealand, Niue, Palau, Papua New Guinea, Samoa, Solomon Islands, Tonga, Tuvalu and Vanuatu. Tokelau attended as an Associate Member. FEMM Observer representatives included: the Asian Development Bank, the Economic and Social Commission for Asia and the Pacific, the European Commission’s Delegation for the Pacific, the International Monetary Fund Resident Representative Office, the Pacific Financial Technical Assistance Centre, the Oceania Customs Organisation, the Pacific Islands Private Sector Organisation, the Secretariat of the Pacific Community, the South Pacific Tourism Organisation, the United Nations Development Programme, the University of the South Pacific and the World Bank Group. Private Sector representatives and Civil Society Organisations also held a dialogue with Forum Economic Ministers on Thursday, 6 April 2017.
3. The theme of the Forum Economic Ministers Meeting was “Financing for Development Solutions”.
REGIONAL DEVELOPMENT PRIORITIES
4. Economic Ministers commended the region’s efforts to prepare the Pacific SDGs Roadmap for endorsement by Forum Leaders in September 2017. They noted the importance of localising indicators and ensuring that they are measurable and achievable to reduce the burden in country reporting.
5. Discussions on the Framework for Pacific Regionalism noted the importance of ensuring that the work on Business Mobility and Business Harmonisation do not overlap with similar work as part of the proposed PACER Plus and MSG Trade agreements. On the issue of fisheries, Ministers noted the work of the Fisheries Taskforce and the importance of supporting their work. Economic Ministers also noted the Framework for Resilient Development in the Pacific and stressed the importance of fragility and vulnerability related to climate induced events on issues such as debt sustainability.
The 2030 Agenda for Sustainable Development/Sustainable Development Goals (SDGs)
(1) Noted the draft Outline of the Pacific SDGs Roadmap, which was approved by Forum Leaders in September 2016;
(2) Endorsed the next steps toward finalising the Roadmap including the Regional set of indicators, noting that the Roadmap will be discussed at the Pacific Regional SDGs Multi-stakeholder Consultation and Dialogue in May 2017, and the Forum Officials Committee Meeting in August 2017;
(3) Noted that a final draft of the Pacific SDGs Roadmap will be submitted to Forum Leaders for endorsement in September 2017;
(4) Noted the need for adequate resources to support the regional coordination and national implementation of sustainable development/SDGs initiatives;
(5) Recognised and supported the implementation of the Smaller Island States (SIS) Strategy;
(6) Called on relevant development partners to support capacity building such as Attachment programmes and other South-South initiatives; and
(7) Tasked the Secretariat to mobilise additional resources to further support the SIS Attachment programme.
Framework for Pacific Regionalism: Regional Priorities & The Role of Forum Economic Ministers
Increased Economic Returns on Fisheries
(8) Noted the progress of the Fisheries Taskforce to enhance economic returns from Fisheries;
(9) Directed Finance officials to: (a) prioritise support to requests for technical input and assistance from the Taskforce; and (b) ensure that recommendations arising from the work of the Taskforce are considered in a timely and effective manner through national finance and budgetary processes.
Improved Mobility and Standardisation of Business Processes
(10) Noted that Leaders recognised the potential of initiatives on regional mobility and harmonised business practice to contribute to increased economic integration, greater investment, and improved business practices;
(11) Noted that ongoing discussion as part of the PACER Plus and MSG Trade agreements may address a number of issues arising in this area;
(12) Tasked the Secretariat to identify remaining issues that require further consideration by relevant Ministers;
(13) Agreed to embed the monitoring of this work into FEMM at both the regional and national levels; and
(14) Noted the importance of remittances and their benefits to the region.
Framework for Resilient Development in the Pacific (FRDP)
(15) Noted the central role of Economic Ministers in the implementation of the FRDP, particularly with respect to resourcing the resilient development agenda;
Mainstreaming the Pacific Framework for the Rights of Persons with Disabilities
(16) Supported the promotion of livelihood opportunities through inclusive economic development approaches and decent work for persons with disabilities, as articulated by the Pacific Framework for the Rights of Persons with Disabilities, as well as by the UN Convention on the Rights of Persons with Disabilities and the Sustainable Development Goals, at both the regional and national level; and
(17) Agreed to support Disability focal Ministries at the national level to mainstream the goals of the Pacific Framework for the Rights of Persons with Disabilities within national inclusive development policies.
FINANCING FOR DEVELOPMENT
6. Discussions in this session considered how Forum Island Countries (FICs) can access new sources of development finance, particularly looking at their comparative advantage, planning for increases in development financing and support from development partners, as well as steps for mobilisation of new sources of development finance based on the UNDP-PIFS survey. Innovative financing modalities, such as debt for nature swap were identified and Economic Ministers recognised the importance of incorporating Financing for Development in medium term budgetary frameworks. Members requested clear guidelines on the specific financing modalities and noted the challenges of limited absorptive capacity. Members requested remaining countries to submit their UNDP-PIFS survey responses to improve country coverage and strengthen the conclusions of the report.
7. Members commended the Secretariat for its innovative paper on a Regional Financing Facility. It was highlighted that the proposed initiative is a good example of regionalism. However, members noted that more work is needed before development of a roadmap. Economic Ministers supported further work on this proposal but suggested a process of country consultations to provide advice on areas of work that would be needed before the development of a roadmap.
8. Economic Ministers considered presentations from the World Bank Group and the Asian Development Bank in relation to disaster responsive financing instruments and options which encompassed both, ex-post and ex-ante instruments for their respective Member States. Ministers also considered an intervention from Australia highlighting the effectiveness of humanitarian cash transfers, commending the action of the Fijian Government following Tropical Cyclone Winston in 2016. Ministers also noted an update from the Cook Islands on the progress of the Pacific Catastrophe Risk Assessment and Financing Initiative and commended the considerable work undertaken to date on the initiative. Ministers urged multilateral institutions to adopt similar products – tailored to suit the needs of the region.
9. Economic Ministers considered an update on Members’ efforts to access global climate financing, noting that climate finance forms a critical component of financing for development. Ministers also considered an update on national climate assessments undertaken to date, noting that with the completion of Palau in the coming month, eight FICs would have completed national assessments for climate financing. Ministers welcomed Fiji’s Presidency of the COP23 and identified the need to work closely as a region. Ministers also recognised the need for greater focus and innovation in the area of climate change adaptation rather than just mitigation.
Financing for Development in the Pacific: Options for Implementation
(18) Noted the analysis of the development finance landscape in the Forum Island Countries and supported the development of appropriate and innovative financial tools;
(19) Committed to invest in building statistical capacity for development finance to measure progress;
(20) Urged member countries to complete the country survey and be part of the development finance case study led by the UNDP and supported by relevant stakeholders;
(21) Noted the work of the World Bank Group on expanding the definition of fragility, but urged them to further refine their work to include the drivers of vulnerability experienced in the Pacific, particularly natural disasters and adverse economic shocks, and to consider these issues when making operational decisions affecting Pacific Island Countries and other small island developing states;
(22) Expressed concern that proposed changes to the IMF/WBG debt sustainability framework could impact the level of grants from multilateral development finance institutions to the Pacific and other small island developing states;
(23) Stressed the need for the proposed debt classifications and thresholds in the framework to fully capture the underlying drivers of vulnerability, particularly the impact of natural disasters and adverse economic shocks;
(24) Requested the Chair of the FEMM to write to the Managing Director of the IMF and the President of the World Bank, copying Representatives from other small island developing state representatives in New York and Washington D.C., to outline these concerns, and request them to ensure that any changes to the framework are well consulted at the country level before they are presented to the Board, and that the underlying drivers of vulnerability in the Pacific and other small island developing states are well considered as part of the framework;
(25) Requested Member countries to raise this and other issues relating to vulnerability at the 2017 Spring and Annual meetings of the IMF and World Bank;
(26) Directed the Secretariat to work with partners to review existing indices on vulnerability with the view to refining them to inform and influence consideration of the economic and environmental vulnerabilities faced by FICs; and
(27) Directed the Secretariat to support the Forum Island Countries in delivering a coordinated position at the upcoming 4th High-Level Dialogue on Financing for Development in Asia and the Pacific to be held in Bangkok in late April 2017.
Developing a Regional Finance Facility for the Pacific
(28) Requested the Secretariat to carry-out country consultations on the Regional Finance Facility and to present the outcomes at the next FEMM.
PCRAFI Foundation and Contingent Credit/Savings Facility for the Pacific
(29) Noted the role of the Asian Development Bank, the International Monetary Fund, and the World Bank in disaster finance and respective financial tools available to Pacific Islands Countries;
(30) Noted the rapid response financing instruments available from the World Bank, in particular the Catastrophe Deferred Draw Down Option (CAT-DDO);
(31) Noted that the PCRAFI Facility has been established in response to the request for its development in FEMM 2015;
(32) Acknowledged the generous support of Germany, Japan, United Kingdom and United States, which enabled the issuance of the Facility’s first insurance policies in November 2016, allowing seamless coverage for its members; and
(33) Acknowledged the importance of humanitarian cash as a form of disaster finance.
Climate Change Finance and Climate Change Trust/Insurance Funds
(34) Emphasised the need for country ownership of climate change and disaster risk reduction projects, and the need for them to be undertaken in a coordinated manner;
(35) Invited funding sources such as the Green Climate Fund, donors and accredited implementing entities to increase their support towards direct access by Pacific Island Countries;
(36) Tasked the Secretariat, in collaboration with relevant technical institutions and partners, to explore and report to the next FEMM on recommended options for private sector engagement in low carbon emission, and resilient development activities in Pacific Island Countries;
(37) Called for an increased allocation of global climate change finance towards adaptation, and encouraged greater private sector engagement in climate change adaptation;
(38) Requested the Secretariat to consult with Members, CROP agencies and partners to find ways to better access and utilise existing funds;
(39) Called for Members and the Secretariat to support the private sector in playing an enhanced role in the area of climate change and disaster risk financing, such as facilitating greater access to the private sector facility of the Green Climate Fund; and
(40) Noted the decision of Foreign Ministers at their 2016 meeting in Suva regarding the role of Economic Ministers in advising on effective funding mechanisms for climate change and disasters, and agreed to update Foreign Ministers at their next meeting.
OTHER FEMM ISSUES & SPECIFIC ISSUES ARISING RELATED TO FEMM STANDING AGENDA ITEMS
11. Economic Ministers noted the triennial stock-take of FEMM decisions for the period 2012-2014. They endorsed the FEMM Observer application by the Pacific Association of Supreme Audit Institutions (PASAI) and the release of FEMM Papers. Ministers endorsed the FEMM Charter, and agreed that FEMM be held annually. Ministers warmly welcomed Palau’s offer to host the 2018 FEMM.
FEMM Triennial Stock-take and Implementation Progress Report (2012-2014)
(41) Noted the updates on the implementation of FEMM decisions; and
(42) Requested the Secretariat to carry out a similar analysis of FEMM mandates triennially to allow sufficient time for FEMM mandates to be implemented.
Application by PASAI: FEMM Special Technical Observer
(43) Endorsed PASAI’s application to be a Special Technical Observer at FEMM.
Release of 2017 FEMM Papers
(44) Supported the recommended document release classifications.
FEMM Charter, Frequency and Next FEMM
(45) Endorsed the draft Charter for FEMM and agreed to include economic development related Climate Change issues in the Indicative Scope of Issues for FEMM, and refer it to the Forum Leaders for approval;
(46) Agreed that FEMM will be convened every 12 months commencing in 2019, hosted at the Secretariat with a member country hosting on a triennial basis; and
(47) Accepted Palau’s offer to host the 2018 FEMM.
Out of Session Papers
(48) Noted the out of session papers.
(49) Agreed that the issue of Remittances should be a standing agenda item for FEMM, given its importance to the region.
FEMM MINISTERIAL RETREAT
(50) Noted the potential options for Ocean Finance in the Pacific Island Countries and Territories, and requested that further work and country assessments be carried out by the OPOC with CROP, other agencies and stakeholders; and
(51) Decided to await the outcomes of the United Nations Oceans Conference to be held from 5-6 June 2017 before they determine their next steps.
JOINT DIALOGUE BETWEEN THE PRIVATE SECTOR AND THE CIVIL SOCIETY ORGANISATIONS
14. Economic Ministers, Private Sector representatives and CSOs held a joint dialogue on Thursday, 6 April 2017. The outcomes of the joint dialogue is attached as ANNEX 1.