by Linda Straker
- Foreign Affairs Minister addressed UN General Assembly on Monday, 27 September
- Economic data does not always present reality of Caribbean States
- Grenada classified as upper-middle-income country
Grenada is recommending that the World Bank adopt new a system of classification of small islands such as Caricom economies. The format currently used has resulted in the marginalisation of development to the region.
“Mr President, it is imperative that we continue to stress and address the reclassification of our status by the Organisation for Economic Cooperation and Development (OECD) Development Assistant Committee (DAC), which has resulted in the marginalisation of the quantum of development assistance to the region,” said Oliver Joseph, Foreign Affairs Minister when he addressed the United Nations General Assembly on Monday, 27 September 2021.
Describing the current system as one that is clearly problematic, Joseph, who was making his debut address to the august body since he became Foreign Affairs Minister in October 2020, said that economic data does not always present the reality of Caribbean States. “We again urge advocacy and support from organisations, including those under the umbrella of the United Nations, in the dismantling of these unfair rulings. We reiterate that economic data such as Gross Domestic Product per capita does not reflect the true nature of the vulnerability of Caribbean States.”
Joseph suggested that the new format be adopted in 2022. “We, therefore, repeat our call for the creation of a Multidimensional Vulnerability Index that adequately addresses those vulnerabilities. We strongly urge that they be completed no later than the end of 2022,” he said.
In February 2021, the United Nations Development Programme (UNDP) published a paper entitled: “Towards a Multidimensional Vulnerability Index” which says that Small Islands Developing States face severe structural challenges due to their remoteness, economic Concentration, and dependence on external flows such as remittances, foreign direct investment, and tourism revenue.
“This paper constructs a Multidimensional Vulnerability Index (MVI) to account for both long-term structural vulnerabilities as well as the recent weaknesses uncovered by the pandemic,” said the executive summary which explained that using 11 indicators for 128 countries (including 34 SIDS), the MVI demonstrates that all but five SIDS are far more vulnerable than their income level would suggest.
“Using the MVI, non-LDC SIDS could save close to 1.5% of their GDP per annum in interest payments. It contributes to the debate on vulnerability measurement by contrasting a narrow focus on economic or environmental vulnerability with a multi-dimensional approach to assessing countries’ structural vulnerabilities to a variety of shocks. This analysis implies the urgent need to reconsider eligibility for concessional financing to SIDS on vulnerability rather than just income criteria,” said the paper.
“The Covid-19 pandemic has greatly exacerbated these vulnerabilities by restricting travel, collapsing investment and tourism, and weakening the economies from which remittances are sent. However, most SIDS are still not eligible for concessional financing due to their classification as middle or high-income countries,” the paper said.
Under the classification, the world’s Middle-Income Countries, which are defined as having a per capita gross national income of US$1,026 to $12,475. Grenada and most other Caricom member states are classified as upper-middle-income countries.
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