Debt and Development in Small Island Developing States

Conservation, development and the blue frontier: the Republic of Seychelles’ Debt Restructuring for Marine Conservation and Climate Adaptation Program

“…Small Island Developing States are often discussed in terms of shared physical and economic characteristics: island or archipelagic state; small land mass; remoteness; trade dependence and vulnerability to external supply and demand shocks; limited resource base; and exposure to environmental change (Campling and Rosalie ; UNDESA ). Moreover, SIDS tend to have higher average per capita incomes than do landlocked developing countries and have generally scored better on the Human Development Index over the last 20 to 30 years (King and Tennant ). At the same time, they are among the middle‐income countries with the largest debt burdens in the world; in 2012, 12 of the 20 most indebted were SIDS (Tennant ).…”

“…A 2013 position paper by the Commonwealth on debt held by small Commonwealth states (many of them islands) identifies the co‐existence of moderate citizen incomes and high state debt burdens as a paradox; these countries need “more favourable access to concessional financial resources, but such requests have failed due to an insistence [by International Financial Institutions] on eligibility by income classification” (Commonwealth , p.iv). The risks and inequities of this paradox for SIDS – especially in light of exposure to rising sea levels and vulnerability to economic shocks – appear to be galvanising attention among multilateral and other donor agencies (King and Tennant ; UN ).…”

“…It was during this era that newly independent Pacific island nations created the “Pacific Islands Forum” from which former colonial powers were excluded (Gruby and Campbell ). Many SIDS, including the Republic of Seychelles, centralised their economies and enacted sweeping domestic agendas through a combination of public spending and import substitution industrialisation (Campling and Rosalie ; King and Tennant ).…”

“…Simultaneously, donor countries, international financial institutions and some governments and NGOs adopted the perspective that economic development could only be achieved through export‐led industrialisation. A key international development question during this period (one that has remained since) was not whether developing countries should accumulate debt, but rather what the appropriate debt ratio was as they sought to attract international businesses and capital through new infrastructure and tax breaks (King and Tennant ). In international fora and multilateral negotiations, SIDS began to “emphasize economic vulnerabilities as a primary [development] concern” (Campling , p.243).…”

Together For Prosperity in the OECS: Growth, Development, and Adversity in Small Island Developing States

“…The ECCB assumed control of the BOA and provided a three-year loan to the government to help recapitalise the bank. The loan amounted to 3 percent of GDP (King and Tennant 2014). Subsequently, the BOA was sold in October 2010 to the Eastern Caribbean Amalgamated Financial Company Ltd, a consortium owned by regional banks and the Government of Antigua and Barbuda.…”