From Vulnerable to Resilient: Transforming Small Island States through Innovative Policy and Finance

Elizabeth Carriere (OBE)

Tropical island coastline surrounded by coral reefs
Source: Xavier Coiffic, Unsplash

Small Island Developing States (SIDS, or Large Ocean States), depend on oceans for food, jobs, and recreation — and oceans are embedded within their peoples’ cultures. Despite their relatively small land masses, SIDS steward 20% of global land-based bird, plant and reptile species, and hold a richness of indigenous knowledges.

SIDS often have fragile economies, and are acutely vulnerable to threats to sustainability, and in some cases to their very existence: 45% of Commonwealth states are SIDS facing existential threats from climate change. Although their vulnerabilities are a risk to global biodiversity and security, SIDS hold valuable assets that can increase their own and global resilience to climate, economic and health threats.

The devastation of some SIDS economies by the pandemic heightened global awareness of their particular vulnerabilities. Attention is increasingly focused on how the survival of their ecosystems and cultures underpins global equilibrium and sustainability, and how richer nations profited from and often severely damaged their ecosystems and economies. Paradoxically, SIDS have limited access to international investment and support that could transform them from intensely vulnerable, to thriving and sustainable. And they are very often excluded from accessing the investment they so urgently need because of complex processes currently required to negotiate, receive and manage these funds.

An innovative collaboration between the Commonwealth Secretariat and the University of Cambridge Centre for Resilience and Sustainable Development (CRSD) aims to resolve this. Their project, Their Future, Our Action is developing and using methodologies and tools with and for Commonwealth SIDS [1] to articulate their needs, identify investible assets, explore capacities to attract investment, and examine new models for international finance. The project’s action research is a powerful platform for SIDS to identify their strengths and exercise agency in addressing the strategic question How can we transform the capacity of governments in SIDS to attract sustainable finance to contribute to resilient economies?

You will find other articles that detail the contours and achievements of Their Future, Our Action , but here I want to emphasise both the possibility and necessity of co-creating new approaches to finance that can support SIDS as they forge pathways to sustainability at a time of heightened global challenges.

It is well documented[2] that small states face disempowering elements in current systems of international finance, and require access to a system that acknowledges and invests in their strengths, while managing the fiduciary risks generally associated with funding small, geographically dispersed populations.

Through Their Future, Our Action SIDS have clearly indicated they are ready for new approaches and partnerships based on what they see as their common assets. So far, this project has enabled SIDS’ self-identification of cross-nation investable assets and strengths (youth and nature) that can leverage relevant, transformative and sustained investment in multiple-country projects. It assumes the possibility of, and works to develop, a funding mechanism that can provide funders/investors with needed assurance and adequate evidence of results, reasonable returns and lowered risk — through collaborative pooled funding.

What can bring funders/investors together with SIDS in financial partnerships which satisfy the needs of both? A recent project workshop brought together global experts to examine what is needed to attract finance for SIDS and reduce fiduciary and other investment risks, and propose alternative finance models. Next steps involve testing these options with relevant decision-makers, and formulating partnerships to implement investment in projects agreed with SIDS.

Time is of the essence: the process is moving forward swiftly to engage decision makers with a view to implementing — within the next 18 months — a sustainable model for financing SIDS’ success.

In future articles, I will trace progress, and provide further background on potential for innovation in this critical aspect of SIDS’ and global resilience.

Elizabeth Carriere (OBE) is a Senior Fellow at the Centre for Resilience and Sustainable Development, University of Cambridge.

[1] This project focused on a subset of Commonwealth countries, defined as low or middle income small island states: Antigua and Barbuda, Barbados, Belize, Botswana, Brunei Darussalam, Cyprus, Eswatini, Fiji, Guyana, Jamaica, Lesotho, Maldives, Malta, Mauritius, Namibia, Papua New Guinea, Saint Lucia, Saint Vincent and the Grenadines, Sao Tome and Principe, Singapore, Solomon Islands, Tonga, Trinidad and Tobago and Vanuatu.

[2] For example see

De Marez, L., S. Bee, B. Bartle, O. Chintulga, and C. Nguyen. “Accessing Climate Finance:Challenges and Opportunities for Small Island Developing States.” UK-OHRLLS, 2022.