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Funding for Sustainable Development in the Small Island Developing States

"Most small island developing states have taken positive steps since Barbados",   said UN Secretary-General Kofi Annan, "but international assistance to them has declined". He added, "If we can find solutions to the special vulnerabilities of islands, it will help us address more global problems. 

Pres Kit on Small Islands:  Issues and Actions New York, 27-28 September 1999

aid funds to the Pacific islands



  • Following global trends, official development assistance to small island developing States has continued to fall since 1994, when the Barbados Conference generated a surge of interest.
  • Net disbursements for bilateral and multilateral aid combined have dropped from $2.36 billion in 1994 to $1.96 billion in 1997, the last year for which data is available.
  • The levels of assistance that have been received by the small islands have been far lower than anticipated, or needed, to implement the 1994 Barbados Programme of Action, which detailed the actions that were necessary to achieve sustainable development in the small islands.

Representatives of donor countries and small islands met in February 1999 to discuss possible avenues for future assistance. Responding to donor demands that the islands prioritize their needs, representatives from small island governments and regional organizations presented over 300 project proposals for assistance to implement the Barbados Programme. Although small islands and donors both saw the meeting as constructive, few commitments have resulted thus far.

projects submitted for funding

Of the small islands, Papua New Guinea received the most bilateral assistance in 1996 US $350 million, followed by Haiti, the Netherlands Antilles, and the Federated States of Micronesia. On the donor side, Australia provided the most-- US $311 million, which mainly went to Pacific islands-- and was followed by the United States, Japan, the Netherlands, France, Italy and New Zealand.

Given worldwide declines in aid, the small islands are concerned that their needs might be overlooked in the global picture, since the islands generally have a higher GDP per capita than other developing countries. For example, when the Maldives was removed from a UN list of the world's poorest countries last year, it protested that its prospects for aid would be reduced and that it would be deprived of certain benefits that accrue to the poorest countries, such as interest-free loans, debt write-offs and preferential market access. Samoa, Vanuatu and Cape Verde have also been tapped as countries that should graduate from the list. Vanuatu, which a Commonwealth survey has listed as the most vulnerable economy in the developing world protested being removed from the UN list.

International financial institutions often rank developing countries' needs by their GDP per capita, which the small islands contend is not an accurate gauge. Instead, they maintain that they should be classified separately according to a vulnerability index that takes into account their susceptibility to external factors that could cripple an island's economy, such as natural disasters and trade shocks. The index would also take into account that small islands have higher costs than other developing countries, which impairs their international competitiveness.

Report of the Secretary-General

Plans and projects for the sustainable development of small island developing States implemented, under implementation or envisaged for the period of 1999-2003 by bilateral donors, United Nations organizations and regional and non-United Nations organizations. Report of the Secretary-General 

The available information as contained in the Annex tables suggests that while programme areas of the Programme of Action have been fairly well covered, national institution building and human resources development have been emphasized by bilateral donors, regional and international organizations, judging from the number of projects and resources allocated.  In so far as bilateral donors are concerned, fisheries development and transport and communication have also been strongly emphasized.  Some programme areas such as waste management, regional institutions, science and technology have been given less emphasis, even though there has been some increase in projects in those areas in recent years.

The available information seems to suggest an increase in projects since 1994 - the year of the Global Conference on the Sustainable Development of Small Island Developing States. Since information on the activities of some major donors is not available and since only sketchy information is made available by respondents regarding projects to be implemented in the coming five years, it is premature to judge at this time whether this increase will be sustained or not.

In EC's recommendations on the post 2000 development cooperation, poverty eradication is stated as the overall strategic goal.  A major guiding principle proposed to be applied in every aspect of the partnership is the principle of integration of sustainable management of the environment and natural resources into development activities, which will take into account the vulnerability of SIDS, especially the threat posed by climate change.

European Commission pointed out that within the framework of Lome Convention it has allocated a total of 771.7 million European Currency Unit (ECU) (846.7 million US dollars) to island developing States in the African, Caribbean, and Pacific regions over the period of 1996-2000. The focus of aid has been on rural development, fishery, transport, communication and social development. A breakdown of allocations for the beneficiary island developing States is contained in Table 4.

In the period of 1994-1997 Germany provided thirty SIDS with some 44 million US dollars in technical cooperation projects which were implemented in that period; Sixty-five million US dollars in technical cooperation projects and 80 million US dollars in financial cooperation projects that are still under implementation was committed to twenty-four SIDS.  A large majority of the projects emphasised national institutions and administrative capacity and human resource development.

An important feature that can be clearly identified in the information provided by the respondents is the strong emphasis on national institutions and administrative capacity and human resource development, as reflected by the large number of projects in these two areas, as well as by the funds allocated to them.  This evidence seems to point to a consensus among countries, regional and multilateral organizations on the importance of these programme areas for SIDS.

Project descriptions suggest that by and large they could be roughly categorized as "soft" and "hard". Projects belonging to the "soft" category are mostly those aimed at technical or policy analysis, planning and coordination.  They took the form of workshops, seminars, expert meetings, training, publications, technical advisory services and assistance. Projects falling under the "hard" category are mostly those relating to infrastructure development, such as construction of seawalls and defenses, building of roads and bridges, upgrading of equipments and facilities, building of harbours and schools and so on.

The costs of projects vary considerably, ranging from under ten thousand to several million US dollars.  In general, the "soft" projects benefitted from smaller allocations of funds as compared to the "hard" ones, especially the large-scale infrastructural projects.  As would be expected, the small "soft" projects have generally been initiated and completed within one year, while the "hard" infrastructural ones have often been planned for a span of several years.  Among projects funded by bilateral donors a majority consist of "hard" projects, many of them of multi-year cycles involving government-to-government cooperation.

Donor comments on funding at the 1999 SIDS/Donor meeting:

EU/EDF For the period 1996/2000, the European Development Fund package foreseen for the national and regional programmes for Pacific island small island developing States 149 million. The EU budget is oriented towards promoting actions in the fields of environment, food security, rehabilitation, co-financing with NGOs, humanitarian action, disaster prevention and preparedness and post-disaster support.

GEF invited small island developing States to enter into dialogue with GEF national focal points; regional bodies will work to establish co-financing which is required by GEF.

Germany Between 1994 and 1997, made available to 33 small island developing States in all regions an amount of DM 233 million, i.e., some 130 million US dollars, through its bilateral financial and technical Focal areas for bilateral cooperation are water supply and sanitation, family planning and health, education and vocational training, regional planning, fisheries and forests A number of small island developing States continue to be partners in bilateral development cooperation, including Cape Verde, the Dominican Bilateral cooperation complements cooperation by the EC on behalf of EU member States.  These figures include funds disbursed, as well as funds committed for ongoing or envisaged projects, and also include financial support by the federal Government to German-based NGOs which are active in Asia and Pacific, Caribbean and African small island developing States Republic, Haiti and Papua New Guinea; in addition, supports the activities of a number of relevant regional organizations.

Japan supported small island developing States in disaster prevention, tourism, small and medium-sized enterprises, fishery and waste management; attaches great importance to projects in waste management, disaster prevention, national institutions and administrative capacity and human resource development. Small island developing States are encouraged to contact the appropriate Japanese authorities through Japanese embassies to explore funding of projects.

New Zealand ODA to small island developing States amounts to $NZ 100 million, and has steadily risen in NZ dollar terms and as a percentage of central government expenditure, and now stands above the OECD average ODA/GNP ratio Assessment of capacity-building, vulnerability; supports strategies for environment, biodiversity, resource and waste management, climate change and phase-out of ozone depleting substances; in collaboration with FAO and WTO: enhancement of the Currently well over 55% of bilateral ODA is directed to 18 Pacific small island developing States and 25% of multilateral ODA specifically supports Pacific regional institutions; small island developing States, both in the Pacific and further.

UNEP. The special problems and requirements of small island developing States are recognized by GEF in three of its four concentration areas: protection of biological diversity, mitigation of climate change impacts and protection of international waters; UNEP­s Environment Fund provides relatively small amounts for small island developing States-related activities, and, consequently, UNEP relies heavily on UNEP/GEF-funded activities related to small island developing States include numerous projects in the area of biodiversity external sources of funding; the Global Environment Facility (GEF), of which UNEP is one of the three implementing agencies, remains one of the major potential sources of such funds; another source of funds for the implementation of the environmental aspects of the Programme of Action is the trust funds operated under the UNEP regional seas programme.

UNESCO contributed to two major processes of consultation in 1997 and in 1998 for the Pacific and Caribbean regions, respectively; these endeavours are known as ­Focus on the Pacific­ and ­Focus on the Caribbean­ Funding possibilities.

United States of America expressed its particular interest in small island developing States work in implementing the international coral reef initiative, and in addressing coastal and marine resources, as well as land-based activities that affect the marine environment.

World Bank is interested in promoting sustainable tourism and industry in the broadest aspects. Will support projects as long as they are consistent with country strategy.

WHO can provide training and technical cooperation for environmental impact assessment and vulnerability analysis for natural disaster preparedness.

Project areas submitted:


Climate Change and Sea Level Rise



Natural and Environmental Disasters



Management of Wastes



Coastal and Marine Resources



Freshwater Resources



Land Resources



Energy Resources



Tourism Resources



Biodiversity Resources



National Institutions and Administrative Capacity



Regional Institutions and Technical Cooperation



Transport and Communication



Science and Technology



Human Resource Development



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