We, the representatives of small states, met at the Small States Forum on October 12, 2013. We considered the prospects for the global economy and its impact on the development prospects for small states. We emphasized the need for extraordinary efforts individually and collectively to ensure that development gains in our countries are sustained.
Given our intrinsic vulnerabilities and characteristics, we will continue to face special development challenges. The openness of our economies makes our countries more vulnerable and dependent on trade and external demand. The size of our markets also makes our countries more vulnerable and dependent on external sources of finance, including remittances and ODA. The size of our labor force makes our countries more vulnerable and dependent on the health of specific sectors.
We noted that investment in infrastructure and human capital remains a key driver to promote growth. But, we recognized that the growing fiscal pressures and less favorable international conditions could present challenges to mobilize resources. We emphasized the need for stronger fiscal positions to enable faster restoration of policy space. We also underscored the need for sustaining progress on reforms in macro-fiscal management, investment climate, and governance. We discussed how fiscal rules and sovereign wealth funds may help us manage efficiently government resources and promote fiscal responsibility and debt sustainability.
We also acknowledged the importance of augmented donor support to help our countries build resilience and address inherent vulnerabilities, which will continue to have important and long-lasting impacts on our development prospects. In this regard, we welcomed the financial support that the World Bank has provided over the past years and the changes made by IDA for small states allocations. We look forward to renewed efforts by the World Bank and other MDBs to sustain growth, development, poverty reduction, and shared prosperity in small states. We called on donors to ensure an ambitious replenishment of IDA and enhance efforts for more effective use of existing resources.
We benefited from an extensive discussion on the structural interdependent causes of high debt, low growth, and natural disasters. We recognized that debt sustainability can only be achieved if accompanied by sustainable growth. We welcomed the World Bank’s Comprehensive Debt Framework and called upon the World Bank to explore how climate change funds can be leveraged more effectively for sustainable development in small states. We also called on donors to urgently work toward recalibrating their climate-related financial instruments to help small states with limited capacities to develop greater climate resilience, adaptation, and mitigation.
We shared some examples of success in small states and underscored the need to continue to learn from each other and to tap global expertise in specialized areas. In this regard, we thanked President Kim for the World Bank’s continued commitment to and support of the Small State Forum.
We welcomed Minister Pierre F. Laporte from Seychelles as the new chair of the Small States Forum.