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ADB 2019: Vulnerable States Need More Options In Concessional Resources

Because of the extreme vulnerabilities and needs faced by small island states, it's crucial that ADB further increase the Asian Development Fund (ADF) grant and concessional financing from current levels for the smallest and most vulnerable members.
02 May 2019 00:25
ADB 2019: Vulnerable States Need More Options In Concessional Resources

Pacific Ministers are hopeful that the Asian Development Bank will continue to scale up and innovate in order to maintain its traditional leadership role among the Multilateral Development Banks (MDBs) in the Pacific.

The plea was made by Marshall Islands Minister for Finance and Governor Brenson Wase while delivering a statement on behalf of the Pacific Developing Member Countries (DMCs) Governors meeting with ADB president Takehiko Nakao on the margins of the 52nd ADB Board of Governors Annual meeting in Nadi yesterday.

The DMC countries are Cook Islands, Federated States of Micronesia, Fiji, Kiribati, Republic of Marshall Islands, Nauru, Niue, Papua New Guinea, Republic of Palau, Samoa, Solomon Islands, Timor-Leste, Tonga, Tuvalu, and Vanuatu.

Because of the extreme vulnerabilities and needs faced by small island states, it’s crucial that ADB further increase the Asian Development Fund (ADF) grant and concessional financing from current levels for the smallest and most vulnerable members.

 

“In just the past five years, we have seen two disasters that have caused damage and losses in Pacific countries of between one third and two thirds of Gross Domestic Product. These shocks can set our economies back years.

“We strongly encourage ADB to consider options to extend more concessional resources for highly vulnerable small states current eligible only for Ordinary Capital Resources (OCR) lending.

This might be considered through some combination of:

  • (i) differential OCR pricing;
  • (ii) country reclassification, as the World Bank has recently announced for Fiji and special consideration should be given to extremely vulnerable Pacific non-World Bank Pacific members, or;
  • (iii) extending concessional resources to build ex-ante climate resilience in vulnerable countries or after a major shock or disaster, similar to the way ADB agreed last year to provide grant funding to help Bangladesh respond to the Rohingya crisis.

Further to these issues, Mr. President, we would like to finish with two important emerging issues of the region:

  1. The Pacific member countries wish to strongly express their concerns on the EU’s unilateral and non-transparent black-listing of a number of Pacific countries. This undermines development aspirations of vulnerable and small Pacific DMCs. This rating also derails our sovereign effort to meet international requirements set by the Organisation for Economic Co-operation and Development (OECD); and
  2. We encourage the ADB to continue to work collaboratively with Pacific DMCs and development partners amicably resolve issues of de-risking and withdrawal of correspondence banking relationships.

He reiterated their appreciation for the continuous and earnest support from ADB over the years and they firmly believe that ADB and its’ Governors will appreciate the efforts of small Pacific Island countries to build resilience.

“We hope that this year’s annual meetings will translate into a commitment by shareholders to support ADB to maintain its traditional leadership role in the Pacific by further scaling up concessional resources and considering options to ADB to continue recognising the needs of small island states consistent with Strategy 2030.”

The DMCs also congratulated Fiji for hosting this 52nd ADB Annual Meeting, the first ever in the Pacific region.

“We welcome this opportunity to showcase our unique development landscape and to share our warm Pacific hospitality.

“This is the first time since ADB’s establishment in 1966 that these meetings are being held in a Pacific island developing member country.

“It is an opportunity for the Pacific as a whole to highlight to Ministers from around the world the unique challenges faced by the region, as well as the successes that have been achieved.”

 

 

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