Prime Minister Honourable Josaia Voreqe Bainimarama has called on international financiers to provide direct financial assistance instead of loans to countries in need of their support.

While delivering his statement this morning at the UNGA74 High-Level Interactive Dialogue on Financing for Development on the theme “Financing the SDGs and Climate Action against Rising Debt Burdens”, Prime Minister Bainimarama said such a practise would enable affected countries to rebuild their economies sustainably.

 “When countries suffer from a climate disasters such as Fiji with Cyclone Winston or the Bahamas with Hurricane Dorian, rather than lending those countries money that simply perpetuates their debt spiral, they should be provided with direct financial assistance to enable them to rebuild their economies in a way that is more climate-resilient,” he said.

Prime Minister Bainimarama said due to a number of forces beyond their control, many countries classified as developing countries need to seek finance to fund the implementation of the SDGs.

He added climate change has driven these costs up placing a higher debt burden on many countries, leading to challenges of debt sustainability.

To increase investment in developing nations, the Prime Minister said developed country governments should rethink the way that aid is being provided so that it includes the provision of loan or risk guarantees as a means of encouraging private sector investment in these economies.

“We should increase the provision of concessional finance and even consider zero interest loans, or loans that are linked to meeting the sustainable development criteria,” he said.

“We should reintroduce measures such as debt-for-nature swaps, which could be broadened to include debt-for-sustainable development or debt-for-climate swaps.”

The Prime Minister added that in recent years, there has been a tendency for many of multilateral development banks to be more conservative and these institutions need to take more risk and more often, take a first-loss position.

“We need to rethink of how countries are categorised. Rather than casting them solely as middle income and least developed countries, sustainable finance should be provided on the most favourable terms to those countries that face significant climate risk, and especially natural disasters.”

Ends.