This page in:
  • English

Events

Small States Forum logo

2013 Small States Forum - Fiscal Sustainability: Building Resilience and Addressing Vulnerability

October 12, 2013

Washington DC

Event Details
  • Date: Saturday, October 12, 2013
  • Time: 8:30am - 5:30pm
  • Location: 1818 H st, NW
  • Conference Hall: J-B1-080

Since 2000, the Small States Forum (SSF) has brought together Finance Ministers and Central Bank Governors from 50 small states to discuss the most pressing challenges they face and share examples of success and best practices in an effort to raise the profiles of small states issues and bring them to the attention of the international community.

The 2013 Small States Forum during the World Bank's Annual Meetings focused on the challenges, best practices, and policy actions to build resilience, address vulnerability and ensure fiscal sustainability. Discussion touched upon potential areas of international support, including the World Bank’s work on the Comprehensive Debt Framework (CDF) and Debt Management Performance Assessment (DeMPA).

Fiscal Sustainability and Fiscal Rules in Small States. Fiscal rules may help guide fiscal policy and promote fiscal responsibility and debt sustainability. However, only a relatively limited number of small states have in the past used fiscal rules compared to larger peers. Similarly, Sovereign Wealth Funds have long been advocated as an important rules-based fiscal policy instrument to manage the use of government revenues in small states.  In practice, only few Funds in small states have been able to achieve their stated objectives.

Promoting Effective Debt Management and Sustainable Growth. Strengthening institutions and policies by implementing reforms, particularly in economic and debt management areas, is critical to mitigating the broader risks to which small states’ economies are exposed: limited economic opportunities, lack of diversification, disproportionately high infrastructure and transaction costs, and high vulnerability to natural disasters.  It is necessary to look at debt issues in a holistic manner, taking into account country specific circumstances and vulnerabilities, including to natural disasters and climate change, depth of the private sector, and health of the macroeconomic situation. Debt sustainability can only be achieved if accompanied by sustainable growth.

For more information, please visit www.worldbank.org/smallstates

8:30- 9:00 Breakfast Reception

9:00- 9:15 Welcome

Hon. Faumuina Tiatia Faaolatane Liuga, Minister of Finance, Samoa

9:15-10:30 Fiscal Sustainability and Fiscal Rules in Small States

Presenters:

  • Martine Guerguil, Deputy Director Fiscal Affairs Department, IMF 
  • Sudhir Shetty, Director, East Asia and Pacific Region, The World Bank

Discussants:

  • Hon. Rick Houenipwela, Minister of Finance and Treasury Solomon Islands
  • Hon. Peter Phillips, Minister of Finance, Jamaica (TBC)

10:30-10:45 Priorities for the World Bank Group

Dr. Jim Yong Kim, President, The World Bank

Coffee Break

11:00-12:30 Promoting Effective Debt Management and Sustainable Growth

Presenters:

  • Jeffrey D.Lewis, Director, Economic Policy, Debt and Trade Department, The World Bank
  • Auguste Tano Kouame, Sector Manager, Latin America and Caribbean Region, The World Bank

Discussants:

  • Hon. Keith Mitchell, Prime Minister, Grenada (TBC)
  • Hon. Pierre F. Laporte, Minister of Finance, Seychelles

12:30 Chairman’s Conclusion

Lunch Buffet

1:30 -2.15 PM Book launch: “Tourism and Inclusive Growth in Small Island Developing States”

Moderator: Denny Lewis Bynoe, Economic Adviser, The Commonwealth Secretariat

Presenter:

  • Dr. Mark Hampton, University of Kent

Discussants:

  • Hon. Pierre F. Laporte, Minister of Finance, Seychelles
  • Sudarshan Gooptu, Sector Manager, Economic Policy, Debt and Trade Department, The World Bank

2:15 - 3.30 PM Workshop: Macroeconomic issues in Small States and implications for the Fund Engagement

Presenter:

  • Peter F. Allum, Assistant Director, Strategy, Policy, and Review Department IMF

Chairman’s Summing-up
*******

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.

Fiscal Sustainability and Fiscal Rules in Small States
PDF 263KB
Promoting Effective Debt Management and Sustainable Growth
PDF 577KB
Fiscal Rules and Small States
PDF 463KB
Volatility Resilience and Fiscal Policy in Pacific
PDF 521KB
Debt Management in Small States
PDF 1152KB
Comprehensive Debt Framework in Small States
PDF 2,019KB