Many small islands have no room for manoeuvre at COP28

AT THE LATEST climate summit convened by the UN, COP28, which opens in Dubai on November 30th, one group is sure to have an outsize voice. These are the small island developing states (SIDS). Their club numbers just 39 full members and 18 associates. Together they account for less than 1% of the world’s population, land mass and GDP—and just 0.2% of carbon emissions. Yet on climate, as well as in other development-related areas, they have a knack of helping to shape the international agenda.

The SIDS vary widely (see maps). Belize, Guyana and Suriname are not even islands. Far from counting as developing, Singapore is one of the world’s richest societies. Many of the others are not exceptionally poor—only seven count among the world’s least developed countries (among them Guinea-Bissau, Haiti and Timor-Leste). But as Emily Wilkinson of ODI, a think-tank in London, emphasises, SIDS “collectively have much more in common than their very big differences.”

The commonalities relate, above all, to the susceptibility that small size confers to sudden shocks. Whether from pandemics or from natural disasters, these have enormous economic and social consequences. A changing climate finds extra ways to pile on the pressure. All this means that small island states are forced to plan for the long run. So when it comes to policy in areas such as climate and development, they are adept at bringing bigger countries—all too slowly, admittedly—along with them.

Little islands, large friends

The small states have proved canny as they navigate the geopolitical contest between America and its friends and China. They have needed to be: the contest is playing out over their maritime domain, above all in the Pacific and Indian oceans. And with exclusive economic zones (EEZs) that can have areas many times that of the islands themselves, small island states are big ocean states.

As such, small island states have a vested interest in peaceable seas around them, open for trade and free of conflict and crime, including smuggling, arms-running and illegal fishing. That makes SIDS champions of a multilateral order governed by international law. The small island states on balance therefore lean more readily to the West. It helps that America, Australia, Europe and New Zealand are big donors. For instance, Australia, the biggest Pacific donor, commits about 40% of its almost $3bn annual budget for aid to Pacific island states.

Yet small island states resent sometimes clumsy attempts by America to use them to project hard power—and to press them to resist Chinese proposals. And although China comes with goodies that SIDS badly want, such as the capacity and the finance to build much-needed infrastructure, that country’s actions can be clumsy, too. Its attempts last year to get island nations to sign up to a “China-Pacific Island Countries Common Development Vision”—in effect a new geopolitical bloc—were flatly rejected. “How do we view national security?” asks Mark Brown, the prime minister of the Cook Islands. “It’s climate security. It’s economic security. It’s the wellbeing of our people, that sort of security…It’s not warships…it’s not more patrols. That doesn’t do it for us.”

Climate security matters more for SIDs than geopolitical wrangles do. It is an existential issue for them as their vulnerabilities are potentially extreme. In one night in 2015 Cyclone Pam, the second-most intense tropical storm ever recorded in the southern Pacific Ocean, caused damage equivalent to 60% of Vanuatu’s annual GDP and wiped out much of the country’s infrastructure. As for the Caribbean: to take one year, 2017, the estimated cost of the hurricane season for the region’s countries was $93bn.

As Abdulla Shahid, the departing foreign minister of the Maldives, puts it: “SIDS have the smallest carbon footprint, but we find ourselves in the biggest trouble.” Models suggest much of low-lying Kiribati, the Maldives and Tuvalu will sink beneath the waves by the century’s end. Climate is a threat not only to development but to sovereignty. The prospect helps the club pack a certain moral punch. Members’ striking gestures (cabinet meetings held underwater) and slogans (“Save Tuvalu, save the world”) reinforce that punch, as does their strength in numbers: SIDS account for a fifth of UN members.

On climate their agenda-setting has been striking. Advocacy by SIDS was crucial to bringing the first international climate treaty into being in 1992. In 2015 they were instrumental in bolstering the ambitions of the Paris agreement with the collective aspiration to restrain global warming to 1.5°C above pre-industrial levels (ie, doing better than the target of 2°C).

Most impressively, at COP27 a year ago in Sharm El-Sheikh, they forced climate-related “loss and damage” (something they had pushed for three decades) to the centre of the climate debate. This is the acknowledgment that the world’s biggest historical emitters of carbon have an obligation to help casualties of climate change adapt to it. A loss-and-damage fund was agreed on, to be paid for by rich-country emitters. But rich countries have not yet put their money where their mouths are. Even finding a permanent home for the fund has fallen victim to bickering. Going into COP28, Mr Brown hopes that at the summit negotiators will agree on the scale and sources of funding for it, as well as the criteria for eligibility.

Small island states are affected particularly badly by shocks because calamities often reinforce one another, undermining these states’ resilience across the board. A core weakness, as Ms Wilkinson points out, is that economic assumptions that underpin the workings of larger countries do not apply to SIDS. They are generally too small to foster diversified economies or to reap the benefits of scale, and too distant from big markets. That means they struggle to attract private capital.

Some island states have alighted on niches that can serve them well. The most obvious is tourism; Caribbean states, in particular, are close to the huge and wealthy North American market. That also makes them inclined to offer themselves as tax havens. Other niches include resources—starting with fish. Several have lucrative revenues from selling day licences for tuna to foreign vessels. And in the Cook Islands, if Mr Brown has his way, a seabed-mining bonanza beckons. On his coffee table is a pile of black egg-shaped forms that a visitor might mistake for artwork. In reality, the seabed of the country’s vast EEZ hosts millions of these nodules, rich in nickel, tungsten and, above all, cobalt—“a battery in a rock”, as Mr Brown likes to put it.

Yet the niches rarely come without perils. In the south Pacific, illegal fishing by foreign vessels means depleted stocks and forgone revenues. A boom and bust in potash mining in tiny Nauru left the state bankrupt and the land denuded. And in the Cook Islands, where Mr Brown talks about “harvesting” those nodules, conservationists and fishermen worry about the impact on biodiversity and fish stocks.

As for tourism, covid-19 hit SIDS dependent on the industry much more than it did more diversified economies, and many small states are emerging from the pandemic with sharply higher levels of debt. Meanwhile, positioned between drug-consuming America and coca-producing countries in South America, Caribbean states struggle with violent crime. The situation is worsened by illegal firearms from abroad, particularly from America.  Rising gun-trafficking has left the Dominican Republic, Jamaica, Trinidad and Tobago and others with horrific violence. In a small country, even low numbers of guns can have an enormous impact. The murder rate in the Turks and Caicos, 78 per 100,000, is roughly ten times higher than in America and 100 times higher than in the EU.

Growing greenbacks

Given the relative size of small states’ climate and development needs, and their difficulties accessing market finance, many leaders argue that all but the most successful small island states will need financial and other assistance in the form of concessional loans, grants and budgetary support from richer countries and international institutions for decades to come.

Mr Brown, for example, points out that getting a new supply vessel for remote islands into play constitutes a hefty part of the annual infrastructure budget. He calls for heavily concessional lending with loan terms of up to 50 years—much longer than international financial institutions currently offer. He notes that the Asian Development Bank, a key lender in the Asia-Pacific region, is growing responsive to the idea.

The Cook Islands is a case study of how even relatively prosperous microstates need help. Fiji, the Maldives, the Marshall Islands and Palau are among those that count as upper-middle-income countries, ranking above Brazil or China and ineligible for overseas development assistance. Yet measures of income fail to capture states’ vulnerability to shocks that can knock a country back. Shortly before the pandemic, the OECD moved the Cook Islands to developed-country status. As covid-19 hit tourism, the Cook Islands was deprived of help just when it needed it. Support is growing for a “multidimensional vulnerability index” as a means to taking SIDS’ special circumstances into account. Such an index, says Mr Shahid, would help clarify development challenges and identify countries “in need of heightened international assistance before a crisis hits.”

A severe lack of bureaucratic capacity makes matters worse. Darshana Baruah of the Carnegie Endowment for International Peace, a think-tank in Washington, DC, writes that small states “lack the administrative capacity to compete against countries such as China and India for access to multilateral development finance.” A loan application to the World Bank is much more troublesome—and relatively much more costly—for Cape Verde than it is for Brazil.

Small states’ governments are stretched thin—Mr Brown’s budget department has fewer than ten staff. And the process of applying for funds can be excruciating: over three years to get accreditation to access climate funds; one to two years to be approved; and a further year or two for disbursement. It is partly why only a fraction of money theoretically available to SIDS gets delivered. Global institutions, says Ms Wilkinson, “are not set up with small countries in mind.”

Despite their vulnerabilities, it is wrong to think of small island states as powerless or hapless victims. A sense of agency, whether as countries affected by climate or by great-power competition, matters hugely to them. And there are indications that Western countries, at least, are listening more carefully to them.

America has sharply upped its aid commitments in the Pacific. Earlier this month Tuvalu, with a population of 11,200, struck a remarkable deal with Australia, which promised residency rights to 280 Tuvaluans a year as well as help with coastal adaptation projects to allow citizens to “stay in their homes with safety and dignity”. Certainly, small island states need help, in ever more creative forms, with a litany of challenges. But, clear-eyed about their future, they are as determined as ever to set the agenda. ■