The Commonwealth Secretariat has commended the Caribbean Development Bank for its latest initiative on including vulnerability as a criterion for accessing development financing
The Commonwealth Secretariat has commended the Caribbean Development Bank for its latest initiative on including vulnerability as a criterion for accessing development financing.
Travis Mitchell, Head of Economy Policy and Small States at the Secretariat, said that vulnerability to threats such as climate change could now be as important as global poverty and must be taken into consideration by international financial institutions (IFIs) when rethinking aid priorities.
The Caribbean Development Bank (CDB) has always included vulnerability in its considerations on allocating development finance, but is now looking to formally link vulnerability to its policy framework by drafting a paper on a CDB vulnerability-resilience framework.
This would include a special fund directed towards disaster relief.
The proposal will focus on environmental, economic and social vulnerabilities and aims to establish a link between CDB’s financial support and an adoption of resilient policies by its member countries.
CDB has estimated that the paper will be put to the Board in May 2018 and made publicly available for comment thereafter, before being implemented.
The proposed disaster relief fund will be presented similarly later in the year.
The proposal aligns closely with the Secretariat’s own vulnerability-resilience framework, which the Commonwealth has been trying to advocate internationally for several years.
The Secretariat has expressed hope that CDB’s move will catalyse serious international debate on vulnerability and development financing.
Its urgent appeals for IFIs to consider vulnerability as a criterion for concessional finance allocations has been unheeded by the international community to date, largely due to geopolitical and other pragmatic concerns.
A shrinking aid budget has been the biggest challenge; despite significant progress on the eradication of poverty, fragility lingers within a large proportion of the world.
Terrorism has become a major threat to countries globally and has pushed the issue of maintaining peace and security up the aid agenda.
It is difficult, however, for IFIs to justify allocating concessional finance when many of the world’s smallest, and most vulnerable, countries own amongst the highest income per capita.
Achieving resilience to vulnerabilities is, after all, as much about countries’ improving their own institutions and policies as about access to cheaper finance.
Nevertheless, with climate change promising more powerful and frequent disasters in the future, the international community needs to become proactive, stresses Mitchell, and provide financial support to improve policies, building standards and the like.
Commonwealth country Dominica is a strong example of why vulnerability needs to be taken into account: a recent category 5 storm wiped out almost all the country’s entire capital stock in less than 24 hours and proved that existing insurance and rapid response facilities are insufficient to deal with climatic shocks.
Read More: The Commonwealth Secretariat has assigned National Climate Finance Adviser Winston Bennett to work with Barbados in 2018 to help government, non-governmental organisations, the private sector and other groups build capacity to access climate finance