PSIDS urge ADB not to segregate climate and development finance

Pacific Small Island Developing States (PSIDS) are urging the Asian Development Bank (ADB) as one of its main multilateral banker, not to segregate climate and development finance.

They say the demarcation of these financing delinks long term development agenda, medium-term national planning and short term budgeting.

This was one of the key points raised by PSIDS ministers and governors of central banks at the 49th Asian Development Bank Annual meeting underway in the German city of Frankfurt.

Speaking on behalf of PSIDS, Cook Islands Finance Minister, Mark Brown said all the 13 Pacific Island Countries represented agree that climate financing remains the utmost priority for them.

“Therefore, we urge ADB to consider this in their programmes and projects for the Pacific Development Member Countries (DMCs), especially the need to consider adaptation rather than mitigation aspects of climate change. This will ensure that we synchronise the planning and associated financing cycles through annual budget appropriations, said Minister Brown.

He appealed to the ADB to assist Pacific countries identify global climate finance options and ‘work with us to drawdown on these funds successfully.’

“Pacific DMCs have also considered an aggregate or omnibus proposal to look at regional and/or multi-country approaches in accessing climate finance. This will ensure that together small Pacific DMCs are able to overcome the diseconomies of scale, appeal to the development partner requirements of far-reaching and wide impact on the lives of people in the Pacific, and attract the best private sector companies and skills to assist in our infrastructure development, said Minister Brown.

Pacific countries, he said remain vulnerable to adverse climatic events as demonstrated by the recent category 5 cyclone that devastated development and the economy of Fiji and the recent brutal droughts that affected Palau, Marshall Islands and the Federated States of Micronesia.

“We are increasingly becoming vulnerable to adverse climatic events and our current prosperity is simply a “house of cards”. One major event, whether it be a cyclone, tsunami and earthquake, can wipe-out our years of hard struggle in achieving whatever we have.

This demonstrates our extreme vulnerability to natural disasters which has placed enormous pressure on limited domestic financial capacity and resources, said Minister Brown.

Despite these glaring evidence, Minister Brown said, ‘our vulnerability and fragility is ignored or left out of the modality of development finance disbursements.’

“We request the ADB to support us in global for a and financial architecture to embed vulnerability with a view to increase the concessional resources to Pacific DMCs to improve our likelihood to access current pool of global climate funds.

He said ADB and other climate financiers should step away from the simple GDP per capita measure of development as criteria.

“We request the ADB to consider this as part of their mix of lending and grants to Pacific DMCs with long-term repayment options to alleviate debt distress and appropriate debt planning as part of overall macroeconomic stability.

The 13 PSIDS represented at the ADB meeting are Cook Islands, Federated States of Micronesia, Kiribati, Marshall Islands, Nauru, Palau, Papua New Guinea, Samoa, Solomon Islands, Timor-Leste, Tonga, Tuvalu and Vanuatu.