1) Financing sustainable development in the Pacific region faces unique challenges due to the small size and remoteness of the island countries. 2) Traditional financing options are limited and domestic resources are scarce, with many countries having high debt levels and narrow economic bases reliant on a few industries or remittances. 3) Key financing priorities include adaptation to climate change, disaster risk management, developing sustainable ocean industries, and transitioning to green economies. Innovative financing instruments and public-private partnerships will be needed to mobilize sufficient funds. 4) Strengthening public financial management systems and developing integrated national and regional development plans can help maximize financing opportunities and ensure funds are used effectively for the Sustainable

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

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

3. The Pacific Islands

4. The Pacific Islands
Size of PICs
EEZ

5. The Pacific Islands
• The “Pacific” Economy
• Large-ocean States
oBlue 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 ;
o mobilising domestic savings for private investment (US$3.5bn – Superannuation
Fund);
o private sector credit and financing;
o Inter-temporal transfer of potential economic growth through Sovereign Wealth
Fund (SWF) or Trust Fund (TF)
o generating/leveraging domestic financial resources
o (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
0
10
20
30
40
50
60
70
80
Cook Is. Fiji FSM Kiribati RMI Palau PNG Samoa Sol. Is. Tonga Tuvalu Van.
National Debt (% GDP) (2001-2014)
Debt/GDP Avg.('01 -'04) Debt/GDP Avg.('05 -'09) Debt/GDP Avg.('10 -'14) Benchmark (40%)

8. Financing Landscape
13
-13
13
20
-15
11 11
-10
23
-3
-8
19
-40
-30
-20
-10
0
10
20
30
40
Cook Is. Fiji FSM Kiribati RMI Palau PNG Samoa Sol. Is. Tonga Tuvalu Van.
Fiscal Space (% of GDP)
Fiscal Space Avg.('01 -'04) Fiscal Space Avg.('05 -'09)
Fiscal Space Avg.('10 -'14)

9. Financing Landscape
25 24 14 16 16 17 25 21 30 16 17 17
42
28
66
79
57
42
30
33
56
27
96
22
0
20
40
60
80
100
120
Cook Is. Fiji FSM Kiribati RMI Palau PNG Samoa Sol. Is. Tonga Tuvalu Van.
Total Revenue and Grants & Tax (% of GDP)
(Avg. 2010-2014)
Tax/GDP Avg.('10 -'14) Rev. + Grants Avg.('10 -'14)

10. Financing Landscape
-60
-50
-40
-30
-20
-10
0
Fiji FSM Kiribati Palau PNG RMI Samoa Sol. Is. Tonga Tuvalu Vanuatu
Current Account Deficit (% of GDP)
Current Account Deficit % of GDP(Avg. 2001-2014) Current Account Deficit Excluding Grants % of GDP (Avg. 2001-2014)

11. Financing Priorities & Means
Priorities:
• 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
Financing
Cost
Coherence
Long-term
Low
Immediate
Policy
Implementation
(time lag)
Political Coherence &
Support
Incoherent
SDGs
2030
Regional
Plans
National
Plans
National Financing
Constraint
Regional Financing
Constraint
Global Financing
Constraint

15. Thank You.