Statement
Chair,
For Small Island Developing States, the challenge is not only how we are assessed, but also our ability to engage with the system that assess us.
Credit rating processes are complex, resource-intensive, and often inaccessible to many SIDS. As a result, our countries are frequently evaluated through frameworks that we have limited capacity to influence, and sometimes limited ability to fully understand or respond to.
Many SIDS lack the capacity to effectively engage with credit rating agencies, manage complex data requirements, or communicate their economic narratives. This contributes to a persistent imbalance, where countries are assessed through frameworks they have limited ability to influence.
This imbalance begins with access.
Only 13 SIDS currently have sovereign credit ratings, reflecting the significant financial and administrative barriers involved. The cost of obtaining and maintaining a rating is prohibitively high for many SIDS, particularly those already facing high debt burdens and constrained fiscal space.
While those without a rating, the consequences are even more immediate. They face even higher borrowing costs and further limit their access to international capital markets and investment.
Even for those that are rated, engagement remains a challenge. Effective interaction with credit rating agencies requires strong technical capacity in debt management, macroeconomic analysis, and financial communication. Yet many SIDS operate with small administrations and limited resources.
With this in mind, for AOSIS, boosting the capacity of SIDS with ratings and assessments requires deliberate actions across three key areas.
First, we must strengthen technical capacity. SIDS need targeted, sustained support to engage effectively with credit rating agencies particularly in debt management and economic analysis.
Dedicated advisory support mechanisms for SIDS could play an important role in boosting the capacity of SIDS to engage better with the ratings system.
Second, AOSIS calls for greater investment in national data and statistical systems. Stronger national data framework, to better capture the realities and circumstances of SIDS, are essential.
This will enable countries to not only improve their engagement with rating agencies, but also to present more accurate assessments of their economies.
Lastly, we must reduce the structural barriers within the system itself. This includes exploring models to make rating more affordable, simplifying administrative requirements, and strengthening transparency and nuanced approaches in rating methodologies. For SIDS, greater recognition and clarity on how climate risks and resilience investments are taken into account in rating assessments would significantly improve engagement.
Chair, Excellencies,
Our objective of mandating this recurring meeting through the Sevilla Commitment, at its core, is about balance. It is about ensuring that countries are not merely passive subjects of external assessment, but active participants in shaping how our creditworthiness is understood.
These discussions are one part of improving this engagement, but this engagement must also bring about reform. It must help to ensure that credit ratings more accurately reflect both the risks we face and the resilience we are building.
At SIDS4, the United Nations Secretary-General and the Prime Minister of Antigua and Barbuda issued a joint call to reform credit rating methodologies to create long-term ratings and recognize the long-term growth potential of SIDS.
Without this, our efforts to reform the international financial architecture will remain incomplete.
With such reforms, we can move toward a more equitable and effective system.
A system that supports, rather than constrain, the sustainable development and resilient prosperity of small island developing states.
I thank you.
