President Ali calls for adaptation fund for vulnerable SIDs, low-lying coastal states

President, Dr Mohamed Irfaan Ali has called for a special adaptation fund for Small Island Developing States (SIDs) and low-lying coastal states, to meet their peculiar needs relating to climate financing and address their vulnerabilities.

He was at the time delivering remarks to the Food and Agriculture Organisation’s (FAO) Hand-in-Hand Investment Forum on Monday.   

“SIDs and low-lying coastal states have peculiar and special needs, especially about climate financing and the interlocking food security challenges. SIDs and the low-lying coastal states need climate adaptation financing on soft terms, more grants, concessionary interest rates, and long-term repayment periods.

“It is my hope, therefore, that the FAO can conceptualise and facilitate the establishment of a special adaptation fund for SIDs and low-lying coastal states, disburse based on vulnerability index on traditional measures relating to the gross domestic product,” President Ali stated in his virtual address.

The Guyanese leader also called for a Climate Vulnerability Fund to help SIDs and low-lying coastal states to boost their food security.

“Climate Change is too critically interlinked with food production, climate change is too critically interlinked with the sustainability of the food production system and agriculture as a whole,” President Ali said.

SIDs and the low-lying coastal states, he added, face particular challenges to their food security, especially with their small land resources, remoteness to larger markets, susceptibility to external shocks, and vulnerability to climate risks such as flooding, and other natural disasters.

“Extreme weather events including droughts and floods disrupt food systems and cause destruction to crops and agricultural infrastructure, critical resources needed to support production often have to be diverted to climate adaptation.

In the face of these challenges, financing for food security, therefore cannot be delinked from climate financing.”

Regarding climate financing in SIDs, close to half of the limited bilateral finance provided was through loans, Dr Ali pointed out.

He noted that given the scale of climate financing needs and common trends, it is anticipated that the large-scale transfers to match those needs will continue to be raised through debt rather than grants. 

Dr Ali said this trend is concerning, particularly for SIDs in CARICOM, given the worsening debt situation that many face, compounded by COVID-19, global inflation, rising fuel prices, and the Russia/Ukraine war, ‘crowding out’ climate finance-related issues.

Investments, therefore, the president said, will help SIDs reduce vulnerabilities and diversify production, expand and modernise agriculture, and foster climate-smart innovations and climate-resilient agriculture.

“Investment is needed to transition production higher up the value chain, through food processing, investment is needed in developing human resources, particularly in making agriculture more attractive to young people.

“SIDs and low-lying coastal states require a substantial injection of resources for climate adaptation to ensure a more resilient sector, without this investment, food security will remain imperilled in SIDs and the low-lying coastal states.”

The president welcomed the Hand- in- Hand initiative, noting that it is an important platform to help countries source and attract resources for greater food security and that the timing is favourable as the world faces ‘one of its gravest food crises.’