UNESCAP/PIFS Workshop on Debt for Climate Swaps
Opening Remarks by Dr Filimon Manoni, Deputy Secretary General
Pacific Islands Forum
16 March 2022
Bula Vinaka and Greetings to you all from the Blue Pacific.
First of all, let me on behalf of the Pacific Island Forum Secretary General, thank my colleagues from the Forum Secretariat and UN ESCAP for organizing this very important event. I am pleased to accept the invitation to offer a few remarks at this workshop.
Pacific Island countries are on the frontline of climate Pacific Island Leaders have identified climate change as the greatest threat facing our region. For us, it is an existential threat. This was confirmed by the latest Intergovernmental Panel on Climate Change (IPCC) report, that was released at the end of last month, sadly, time is not on our side, if urgent actions to deal with the increasing climate and disaster risks are not taken.
Our region is highly exposed to disasters such as tropical cyclones, earthquakes, tsunamis and droughts. Several of our Forum Members are amongst the most vulnerable countries on the planet. The recent massive volcanic eruption and tsunami in Tonga, for example, wiped out 18.5% of Tonga’s GDP. The country needs at least US$240 million to fully recover from the disaster, at a time when it is still recovering from the impacts of Cyclone Harold two years ago. It takes many years and huge cost, for Pacific economies to recover from the socio-economic losses from disasters.
Many countries find themselves borrowing heavily to rebuild after every disaster and as is common in the region a new disaster strikes when countries are still recovering from the previous one. Countries are easily trapped in the ‘borrowing-rebuilding and further borrowing’ cycle.
As a result, debts of Pacific countries continue to mount, placing immense fiscal pressure on governments, communities and families, perpetuating poverty, inequality and hardship.
According to the debt sustainability assessments of the IMF and World Bank, thirteen Pacific economies have been assessed at high risk of debt distress in 2021 up from six in 2019. This is a cause for concern going forward as high debt levels mean less resources for other priority needs such as health and education.
The region, therefore, needs innovative financing instruments to address our debt situation and build resilience against climate risks. That is why this workshop on ‘Debt-for-Climate Swaps’ and the upcoming Pacific Regional Debt Conference planned for next month are so important because they provide critical platforms to explore options to address the challenges posed by the high debt profiles and climate vulnerabilities facing many Pacific economies.
I also note with great interest the inclusion of the Pacific Resilience Facility (PRF) on the agenda for discussion during the workshop. The PRF is a very important initiative for the Pacific and the Secretariat will continue to consult and advocate with our development partners for their support and financial commitment to capitalise the PRF. The potential to use the PRF as a vehicle to implement debt for climate swap arrangements is acknowledged in the ESCAP report on Debt for Climate Swaps and I would urge we explore this further going forward.
I would like to call on the region’s development partners to support the PRF because it is a beacon of hope for our Pacific people. The use of the PRF to address the region’s debt situation and at the same time build community resilience against disasters can be a ‘win-win’ option for the Blue Pacific.
Finally, let me wish you all a fruitful discussion on this important matter and the Forum Secretariat looks forward to the outcomes of this workshop, especially the next steps in realizing the potential benefits of debt-for-climate swaps for economies in the Blue Pacific continent.
I thank you
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