This paper provides a snapshot of development financing in small island developing States (SIDS). It aims to inform and reinvigorate international policy debates around how SIDS can finance – and meet – the world’s new sustainable development agenda, the SDGs (Sustainable Development Goals). This discussion is particularly timely in view of the Third International Conference on Financing for Development in Addis Ababa, Ethiopia in July 2015. The conference will define the financing framework for the new SDGs. A robust and inclusive outcome to this conference must necessarily recognize the special development challenges faced by SIDS, and include measures designed to support them to meet the SDGs. This paper reviews recent key data on domestic and international financial flows, such as development and climate aid, foreign direct investment, remittances, tax revenues and savings. It also explores in detail some SIDS’ continued struggles to maintain debt sustainability. All SIDS regions, namely the Caribbean, Pacific, and Atlantic, Indian Ocean, Mediterranean and South China Sea (AIMS) countries are included in our evaluation. SIDS are extremely mixed when it comes to human development. Some enjoy very high levels of human development such as Barbados and Singapore; others, such as Comoros, Guinea-Bissau and Haiti score poorly. When it comes to domestic and international financial flows, the picture is similarly mixed; some countries rely heavily on domestic and international capital markets (i.e. private finance) to meet fiscal deficits and fund development while others are heavily aid dependent. Some attract foreign direct
investment while others do not.

• More Information

Download PDF