BRIDGETOWN, Barbados, CMC—Grenada’s Prime Minister Dickon Mitchell said Thursday that he believes the 15-member regional integration grouping, CARICOM, will welcome the United Nations’ decision on Wednesday to adopt the multidimensional vulnerability index (MVI) as a new measuring tool intended better to serve small island developing states (SIDS).
International financial institutions, including the International Monetary Fund and the World Bank, have often relied solely on gross national income (GNI) to determine eligibility for concessionary loans.
However, on Wednesday, the UN member states reached an agreement for the adoption and use of an MVI following an exhaustive process of final deliberations over the past few days. The final document emerged late Wednesday night from a critical UN process called the “Silence Procedure,” during which member states can raise objections or dispute positions from the final negotiated text.
Silence on the MVI was unopposed, signifying full and unanimous endorsement by all UN member states.
Mitchell, speaking at a virtual news conference where the UN and its partners launched a Regional Response Plan for Grenada and St. Vincent and the Grenadines in the wake of the widespread destruction caused by Hurricane Beryl when it passed through the region last week, said that he believes “almost all of CARICOM have certainly welcomed the adoption by the UN of the multidimensional vulnerability index. Listen to audio
“I think as painful as it is, we just had on the first of July demonstrable evidence as to why we advocated for a more diverse matrix for determining how financing should flow and the countries it should flow to, particularly on a concessional basis.”
Mitchell, who will officially take over the chairmanship of CARICOM when the leaders host their annual summit in Grenada at month’s end, said simply using GNI, “You are punishing small island developing states for having eked out over many decades post-independence investments in education and infrastructure that have allowed some of their citizens to earn a higher income.
“In many instances, the higher income does not necessarily translate to a higher standard of living, and we have to factor the cost of living, and the GNI does not add to the factor, the cost of living.”
“So the reality is for many of the small islands developing states in the Caribbean, the Pacific, the vulnerabilities that we face …volcanoes, hurricanes …the impact of geopolitical wars on food pricing, fuel pricing and how that impacts our economies.
“So we are in a situation, without fail every couple of months, we are facing significant vulnerabilities,” Mitchell said, noting that in Grenada’s case, for example, “we had a significant drought for the first six months of the year and as soon as the rains started to fall we get hit with this dreadful hurricane.”
This historic UN initiative marks a milestone for SIDS, which has long championed the need for an MVI for over 30 years. They fight tirelessly for an MVI to access crucial development support, including concessionary financing, due to traditional means of measuring economic needs that fail to consider their unique vulnerabilities.
Mitchell said that MVI is something the region had advocated for, championing the position within SIDS. “But it is just one of the things that needs to be addressed.
“We also have to be careful that it is not used to disadvantage anyone, but at this stage, I would say we certainly welcome, but it is not just the UN, there are multilateral financial institutions…(and) we are not there yet.
“This is just really the start, a long road to go, and we have to be persistent, consistent in our advocating for things like that, but there are many other instruments that need to be addressed as well,” Mitchell said, referring to debt suspension clauses…”
He said that the issue of debt forgiveness is another factor, “especially when the debt has been incurred due to natural disasters, and we have to constantly have to rebuild.
“So, this is a drop in the bucket of the collective actions we need to take to shore up and pay particular attention to the challenges of small island states like Grenada and St. Vincent and the Grenadines.”
In 2022, the Barbados-based Caribbean Development Bank (CDB), at its 52nd annual meeting in the Turks and Caicos Islands (TC), said that it was piloting a new concept that will allow countries in the Caribbean to access financing following natural disasters and other shocks to their economies.
It was then said that the Recovery Duration Adjuster (RDA) aims to change the way vulnerability is measured for small island states and is intended to replace the current standard measurement, the MVI, which primarily considers a country’s GNI. Many countries in the Caribbean do not qualify for such financing since they no longer meet the GNI standards.
Download audio – Regional Response Plan meeting – Grenada PM Dickon Mitchell
and then 