1. Financing the SDGs in the Pacific
Dr. Raymond Prasad
Economic Adviser
Pacific Islands Forum Secretariat

2. Outline Linkages: SDGs and Development Finance The “Pacific”
Financing Landscape
The “Pacific”
Financing Priorities & Means
Financing Instruments & Enablers

3. The Pacific Islands

4. The Pacific Islands
Size of PICs
EEZ
Size of PICs
EEZ
Size of PICs
EEZ

5. The Pacific Islands The “Pacific” Economy Large-ocean States
Blue Economy:
# Fisheries – Tuna # Deep Sea Mining (Potential)
# Coastal (Tourism) # Marine Protected Zones
Larger PICs (Land based Natural Resources)
PNG: # LNG # Gold # Copper # Logging # Agriculture
Fiji: # Water # Gold # Bauxite # Copper # Logging # Agriculture
Solomon Islands: # Gold # Logging # Agriculture
Most Important – Its People, Culture & Tradition
# Remittances (Samoa|Tonga) # Traditional Social Safety Nets
# Culture & Dev. Financing

6. Financing Landscape Traditional Options:
access to foreign capital (FDI and loans) and inflows of unrequited transfers (including remittances and aid);
build-up of domestic sources of finance ;
mobilising domestic savings for private investment (US$3.5bn – Superannuation Fund);
private sector credit and financing;
Inter-temporal transfer of potential economic growth through Sovereign Wealth Fund (SWF) or Trust Fund (TF)
generating/leveraging domestic financial resources
(Lack of) Fiscal Space - debt to GDP ratios
Generation of net foreign revenues
Economic resilience (Disaster Insurance - PCRAFI, BoP Support, Regional Finance Facility)

7. Financing Landscape

8. Financing Landscape

9. Financing Landscape

10. Financing Landscape

11. Financing Priorities & Means
Climate Change Adaptation Finance
Climate Proofing of infrastructure
Food security – erosion of coastlines and salinaiton of arable land
Loss & Damage – Climate Insurance/Trust Fund
Disaster Finance
Risk Transfer to financial markets
Management and investment in Preparedness
Oceans Finance
Rehabilitation coral reefs & Sustainable livelihoods – coastal fisheries/tourism
Increasing returns from the blue economy – fisheries
Green Economy Finance
Financing of renewable energy
Waste Management – opportunities for energy generation
Means:
Private Sector Participation & Partnership
CC Projects
Risk Sharing
Gender Empowerment
Untapped potential almost 50%
Social Safety nets
Cultural/traditional Safety Nets;
Community resilience, eg. micro-insurance;
Promote Global Income Sharing
Remittances (addressing De-risking issues)
Labour mobility
Financial Innovation & Integration
Financial Resilience
Limiting pressure on fiscal space
Reducing macroeconomic volatility

12. Financing Instruments
SME Credit Guarantees
Insurance for Risk Transfer
Counter-Cyclical Options
Contingent Credit Lines
Diaspora Bonds
GDP Indexed bonds
Debt-for-nature swaps
Financial tax
Travel levy
Social levy
Tax & Non-Tax (Levy)
Bonds
Guarantee
&
Risk Transfers
Loans

13. Financing Enablers Public Financial Management
Strengthens linakages and accountability & transparency
National Budgeting Systems (Immediate/Short-term)
National Plans – usually 5 years (Medium-term)
SDGs 2030 (Long-term)
Pacific:
Forum Compact - Peer Review Process – Assessment of National Systems & Development effectiveness (PIFS)
DFAA – Gap Assessment and linkages to National Systems (UNDP)
Integrated Financing Agenda
𝑫𝒆𝒗𝒆𝒍𝒐𝒑𝒎𝒆𝒏𝒕 𝑭𝒊𝒏𝒂𝒏𝒄𝒆=
𝑓 𝐴𝑑𝑑𝑖𝑠 𝐴𝑏𝑎𝑏𝑎=𝑓(𝑃𝑢𝑏𝑙𝑖𝑐 𝐹𝐼𝑛𝑎𝑛𝑐𝑒+𝑂𝐷𝐴+𝑃𝑟𝑖𝑣𝑎𝑡𝑒 𝑙𝑜𝑐𝑎𝑙+𝐼𝑛𝑡𝑒𝑟𝑛𝑎𝑡𝑖𝑜𝑛𝑎𝑙 𝑓𝑖𝑛𝑎𝑛𝑐𝑖𝑎𝑙 𝐹𝑙𝑜𝑤𝑠+𝑇𝑟𝑎𝑑𝑒) + 𝑆𝑒𝑛𝑑𝑎𝑖 𝐴𝑔𝑒𝑛𝑑𝑎=𝑓(𝐷𝑖𝑠𝑎𝑠𝑡𝑒𝑟 𝑃𝑟𝑒𝑝𝑎𝑟𝑒𝑑𝑛𝑒𝑠𝑠+𝑀𝑎𝑛𝑎𝑔𝑒𝑚𝑒𝑛𝑡+𝑅𝑖𝑠𝑘 𝑡𝑟𝑎𝑛𝑠𝑓𝑒𝑟) + 𝐶𝑂𝑃𝐴𝑔𝑒𝑛𝑑𝑎=𝑓(𝐶𝑙𝑖𝑚𝑎𝑡𝑒 𝐶ℎ𝑎𝑛𝑔𝑒 𝐴𝑑𝑎𝑝𝑡𝑎𝑡𝑖𝑜𝑛 𝑎𝑛𝑑 𝑀𝑖𝑡𝑖𝑔𝑎𝑡𝑖𝑜𝑛)

14. SDGs & Development Financing
High
SDGs 2030
Financing Cost
Coherence
Regional Plans
Global Financing Constraint
Political Coherence & Support
National Plans
Low
Regional Financing Constraint
Incoherent
Immediate
National Financing Constraint
Policy Implementation (time lag)
Long-term

15. Thank You.