Sinking islands, rising debts: urgent need for new financial compact for Small Island Developing States

Small Island Developing States (SIDS) are getting entrapped in financial quagmire due to climate impacts. This paper delves into the urgent financial plight of SIDS, examining the multifaceted challenges they face across social, environmental and economic domains. It argues for a comprehensive approach to debt relief, future protection, resilience investment and advisory support as necessary steps for the survival and sustainable development in these vulnerable regions.

This paper identifies and explores four measures to build longer-term debt sustainability. These include debt alleviation, future protection, longer-term resilience investments, and advisor support and legal aid. It is crucial to recognise that for this holistic and sustainable solution to take shape, international cooperation and commitment will be needed. The paper highlights that the challenges faced by SIDS shines light on the importance of creating a united approach and shared responsibility.