Keynote Address by His Excellency Dr Mohamed Muizzu, President of the Republic of Maldives, at the High-Level Meeting on Resource Mobilization for Small Island Developing States At the 4th International Conference on SIDS Antigua and Barbuda

Mr. President, Mr. Secretary General, Excellencies, Ladies, and Gentlemen,

I thank Secretary-General António Guterres, for convening this High-Level meeting and bringing together such a diverse group of stakeholders to discuss resource mobilization for SIDS.

Net external resource inflow to SIDS in the past two decades have been on a declining trend.

That is despite the international community making promises to increase development and climate financing for SIDS in Samoa in 2014.
In Paris in 2015.
And here in Antigua, we are making even more ambitious promises to increase funding for SIDS.

To escape the middle-income trap,
To continue climbing to the next level of development,
And to achieve the SDGs,
SIDS need extraordinary level of financing at concessional terms.

Many SIDS, including the Maldives, have graduated from the LDC category.
But graduation has come with a hefty price tag.

The cost of borrowing from bilateral creditors has increased with shortened maturities.
It has worsened our fiscal situation,
Forced us into high levels of indebtedness away from a sustainable debt path and lowered our credit ratings.

Since graduation, the average growth rate of the economy has slowed down.
Access to affordable finance has become restricted.
And the climate crisis has forced us to make impossible choices.

We are forced to choose between funding the establishment of new schools versus constructing seawalls.

We are forced to choose between investing in clean water versus investing in sanitation and coastal protection.

These are choices that we should not be forced to make.

External concessional financing will allow us to construct public infrastructure, vital to attract foreign direct investments. Infrastructure that is sustainable, smart, and climate resilient.

This is even more important for SIDS like the Maldives, which are highly dependent on exports.

I offer three solutions which will allow SIDS, including the Maldives, to enable easier access to finance.
To turbocharge our progress towards reaching the SDGs.

First: reform the international financial architecture.

There is evidence that multilateral development banks have the financial strength to borrow from international capital markets given their positive credit ratings, and in turn, lend to SIDS at highly concessional rates.

There is also evidence showing that such channeling of funds will not adversely impact the credit ratings of the MDBs.

I call on the shareholders of these MDBs and IFIs, to help enact these reforms and fulfill the promises they have made to SIDS in the last three decades.

Second: Our developed country partners can join the MDBs and the private sector to scale up private finance flows to SIDS.

A key reason why big foreign investments remain elusive in SIDS is that the scale is too small compared to the risks, which would always be associated with such investments.

Therefore, our partners can share the burden of some of these risks. Call it burden sharing or risk sharing.
What it would do is to create a corridor of confidence for the private sector to choose SIDS to invest in with their funds.
It is such investments which will propel SIDS towards achieving the SDGs as well as national development goals.

Third: SIDS must start thinking big.
Just because we are small, we don’t have to limit our possibilities. Expand the horizon.
Aim higher.
Try reaching further than we have ever imagined.

In realizing such a vision, we must build our own capacities.
State capacity.
Productive capacity.

We must identify and decide what we want.
We must reach out to our partners seeking support.
But it must be a process that we lead.
We should be in the driving seat.

Mr. Secretary-General,

The question is not whether there is enough finance for SIDS.
Rather, the question is whether there is commitment and will to direct finance towards where and who needs it the most.

We need our development partners to stop seeing SIDS simply as recipients of aid, and to see us as partners in sustainable development.
Partners who protect a large part of the Ocean and its biodiversity.
It is only through genuine partnerships, with mutual respect and trust, that we can ensure that finance is directed and mobilized to where it is needed the most.

And in that long line of countries that need assistance, SIDS will be among the top.

Thank you.