On October 14, 2017, the annual Small States Forum was held at the World Bank Group/IMF Annual Meetings. This high-level event brought together heads of government, ministers and central bank governors from small states, as well as World Bank Group management and partner organizations from OECD, Commonwealth Secretariat, UNDP and IMF to discuss the pressing challenges and opportunities that small states face. Key issues included vulnerability, increased funding from the International Development Association (IDA), de-risking and partnerships.
The new Chair of the Small States Forum, the Right Honorable Prime Minister Keith Mitchell of Grenada, received a warm welcome by members. The new Caribbean leadership of the Small States Forum is very timely and coincides with the Prime Minister’s Chairmanship of CARICOM.
This year’s event took place in the aftermath of devastating hurricanes in the Caribbean, which put a spotlight on small islands vulnerable to extreme weather events. In her opening remarks, Kristalina Georgieva, the Chief Executive Officer of the World Bank, provided highlights of a high-level roundtable on recovery and resilience in the Caribbean during the Annual Meetings. At this event, Kristalina noted that the World Bank, other international financial institutions, and representatives of CARICOM countries and territories reaffirmed their commitment to help rebuild the Caribbean and share expertise on how similar crises have been managed elsewhere.
Manuela Ferro, Vice President of Operations Policy and Country Services, emphasized efforts the World Bank is making to provide more financing to small states, most notably the massive increase in IDA resources, the World Bank’s fund for the 75 poorest countries. The most recent replenishment of IDA's resources, the eighteenth (IDA18), resulted in a record replenishment of $75 billion over the next three years. This is a significant increase from previous replenishments, particularly for small states. Total funds allocated to small states for FY18-20 under IDA18 – $1.9 billion – more than doubled the previous allocation in the previous 3 years. This provides real opportunities for countries to overcome poverty and set a sustainable growth path. As noted by Manuela Ferro, “we now need to focus on concrete activities to make the best possible use of these resources.”
The discussion also highlighted the many ways the World Bank supports small states, which was covered in the first session.
Joaquim Levy, Managing Director and Chief Financial Officer of the World Bank, outlined some practical solutions and actions to support small states that face de-risking – the phenomenon of financial institutions terminating or restricting business relationships with clients to avoid, rather than manage risk. He singled out the role of technology as a possible solution to challenges small states face in the banking sector and the potential of ‘blockchain’ technology and other initiatives to help facilitate remittances and other financial flows to and from small states.
The World Bank’s Vice President for Latin America and the Caribbean, Jorge Familiar, highlighted innovations in the World Bank’s toolkit of instruments, including the Catastrophic Risk Insurance and the Catastrophe-Deferred Drawdown Option, which offer financing to respond to emergencies and build resilience to external shocks.
The second session of the Forum showcased various accomplishments and innovations led by small states over recent years.
Prime Minister Mitchell set the stage by praising the Small States Forum as a platform for development solutions.