Antigua and Barbuda was making great strides as one of the Caribbean’s more prosperous nations…Then Hurricane Irma struck

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A man walks down a street at Codrington on the island of Barbuda in October 2017, a month after Hurricane Irma struck the Caribbean islands of Antigua and Barbuda. Photo by: Shannon Stapleton / Reuters

Aid rules shake-up offers hope to climate-threatened small islands

SOURCE: Antigua and Barbuda was making great strides as one of the Caribbean’s more prosperous nations and poised to become “high income,” officially no longer in need of development assistance. Then Hurricane Irma struck.

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Category 5 winds reaching 180mph lashed Barbuda, damaging some 90% of structures and triggering the evacuation of all 1,800 residents to cramped shelters on its larger sister island. A “mammoth task” of reconstruction was required.

Two weeks later, Hurricane Maria inflicted similar devastation on nearby Dominica, wiping out the equivalent of 226% of its gross domestic product in a country classed as “upper-middle-income” and therefore with limited access to aid and concessional finance.

For critics of the system for allocating development assistance, these terrible events in September 2017 laid bare the weakness of its narrow focus on national income while ignoring “vulnerability” — in a warming world where so-called once-in-a-lifetime weather disasters will become all too frequent.

Many small island developing states, or SIDS, at the eye of the climate emergency are also paradises. A small number of very wealthy people snapping up luxury homes distorts and inflates income-per-head statistics, masking deep poverty.

Seven years on, a radical plan to rewrite these aid rules — to recognize the climate threat to SIDS, but by mapping vulnerability in all its forms — will stand or fall in crucial talks at the United Nations in the next few months.

The change is “long overdue,” according to Walton Webson, Antigua and Barbuda’s permanent representative to the U.N. who argued the COVID-19 pandemic — “another social disaster” — had also proven the need for it.

“Many small islands, and subsequently many developing countries, have seen that the current measurement for whether a country has graduated out of aid assistance is not fair or not working in their best interests. The momentum is really strong,” he told Devex from New York.

Webson is a co-facilitator of the U.N. intergovernmental process, along with Ana Paula Zacarias, Portugal’s permanent representative, who pointed to growing interest from the World Bank and the Organisation for Economic Co-operation and Development group of donor nations. “For the first time, they are open to a discussion on these matters,” she said.

Both acknowledged the suspicions of some low-income countries which fear losing out from a shake-up. “The process now is to talk with everybody, listen to their worries, try to understand them, and address them the best we can,” Zacarias added.

This proposal to supplement GNI, or gross national income, as the benchmark for eligibility for aid, cheaper finance, and debt relief enjoys the obscure title: High level panel on the development of a Multidimensional Vulnerability Index, or MVI.

For 18 months from March 2022, a 12-member panel gathered evidence for a new system, producing a final report in February this year that ranked each country’s vulnerability to a range of economic, environmental, and social threats.

It branded the GNI measure “the wrong tool for the job” stating: “The MVI is not an academic exercise: it is a vital tool to help small island nations gain access to the concessional financing that they need to survive the climate catastrophe.”

The index will be in the spotlight at the 4th SIDS international conference in Antigua at the end of May before U.N. members decide its fate in an expected resolution at the next General Assembly in September.

The European Union has given strong backing, arguing the vulnerability index offers a “better understanding” than GNI of “development challenges and vulnerabilities” and calling for its “swift approval.”

The United States is “quite supportive,” Webson and Zacarias said, while the United Kingdom has been somewhat more cautious, telling Devex that “improvements are needed.”

Supporters recognize that even a political go-ahead in New York will only be a first step on the road to change: Backing from international financial institutions will be essential for a real-world impact.

The “preliminary country scores” produced by the index ranked 70% of SIDS as above average for vulnerability, but acknowledged that — with most countries “clustered around the median” —  it would be more difficult to use as a basis for allocating development aid than an “income cutoff.”

And the world’s most vulnerable country? Not a SIDS, but war-torn Yemen — ahead of Maldives, Djibouti, Chad, Naura, and Somalia — evidence for the argument that it is a “universal” model, the panel said.

The index is “a living tool,” it was stressed, to be adapted as understanding of “the causes and consequences of vulnerability improve.” One acknowledged weakness is the omission of the burden from debt, because of a lack of data.

Webson acknowledged “U.N. negotiations are never easy because they always involve politics as much as economics,” but added: “I am optimistic, I believe we will get it done. We have to make sure the resolution isn’t so watered down that it’s not a useful mechanism.”

Zacarias said the stance of international financial institutions will be crucial. “This will be the most important thing. We want IFIs to look at the index and use it as fast as they can in their processes.”

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