Pacific Small Island Developing States have welcomed the decision by the Asian Development Bank (ADB) to develop a contingent credit line to finance post disaster recovery.
Cook Island Finance Minister, Mark Brown made reference to the new financing mechanism in his address at the 49th Asian Development meeting in Frankfurt.
“Pacific DMCs need innovative financing mechanisms that suit our needs and yet be flexible enough to account for inherent vulnerabilities, such as susceptibility to adverse climatic events and global economic shocks.”
“We would like to see ADB at the forefront of financial innovation for Pacific countries, which are tailored to the needs of Pacific countries. In this regard, we welcome the decision to focus on Contingent Credit Lines (CCL) for post-disaster recovery, said Minister Brown.
He also raised the issue of ADB investing into Micro, Small Medium Enterprises (MSMEs) and private sector development in the Pacific region.
“A reasonable private sector development can be a catalyst to greater mobilisation of idle funds (or savings) into investment, improve domestic resource mobilization (through direct and indirect tax revenues), and enhance the national welfare and reduce inequality.
“The development of MSMEs provides a meaningful opportunity for creation of employment and livelihood for the informal sector, especially for economic empowerment of women and youth in the region, said Minister Brown who spoke on behalf of 13 PSIDS represented at the ADB Annual meeting.
He admits that financing of private sector in the region remains a key issue.
“We seek ADB’s support in looking at financing options, such as SMEs Credit Guarantee Schemes and scope of angel financing, for Pacific DMCs. Financing options coupled with financial inclusion initiatives can provide long-term gains in improving the macroeconomic performance and building resilience.
“In addition, ADB should also consider actively participate in the State Owned Enterprise (SOE) reforms and assist countries in the divestment of SOEs, where requested, said the Cook Islands finance minister."