Challenges Facing Small States and Middle Income Countries

81. Heads of Government reaffirmed the challenges facing small states as set out in the 2005 Gozo Statement on Vulnerable Small States. They noted with concern that the global financial and economic crisis is having significant negative effects on small states in trade, aid, tourism and remittances and that the crisis has exacerbated the challenges already faced by these countries by deepening unemployment and creating budgetary pressure in crucial social sectors.

82. Heads of Government noted that the disproportionate impact of the global economic crisis on small states underscored the importance of a conducive external environment to their development. They encouraged these countries to continue to implement outward-oriented development strategies that would assist them to overcome their vulnerabilities and diversify the structures of their economies. They also called for an holistic and integrated approach to development for small states. Heads commended the work done by the Small States Network for Economic Development.

83. Heads welcomed the advocacy and policy development work of the Commonwealth Secretariat on behalf of small states. They urged the Secretariat to continue work in all the areas that would assist small states in their endeavour to implement crisis-resilient growth and development strategies. They agreed to make further efforts to better utilise the resources and capacities across the Commonwealth‟s membership to support efforts to strengthen economic and social development in small member states. They welcomed the work of the Secretariat through its Joint Office for Commonwealth small states in New York and looked forward to further progress towards establishing a similar Joint Office in Geneva. They requested the Secretary-General to explore the possibility of the Geneva office being established as a cooperative venture with La Francophonie.

84. Heads urged the international community to provide support to small states in the pursuit of their development strategies and, in particular, the provision of comprehensive development assistance programmes and the use of regional mechanisms to address development challenges. They
also called for continued international assistance to small states in meeting the MDGs and commitments under the Mauritius Strategy.

85. Heads expressed concern at the growing debt burden of Commonwealth small states. In the context of the acute pressures on small and middle-income states in respect of their debt burdens, liquidity and access to finance, Heads supported efforts to develop innovative solutions in areas of constraint, as recommended by Commonwealth Finance Ministers. They recognised that viable solutions would need to be adequately financed and urged that international financial institutions allocate more substantial resources for analytical and advisory services, capacity building and technical assistance for small states to meet the developmental challenges arising from the global economic and financial crisis.

86. Heads recognised that several Commonwealth countries are classified as middle-income countries (MICs) and still face significant challenges in their efforts to meet the internationally agreed development goals, including the MDGs. In that regard, they underlined the importance of international support that is aligned with national priorities, to address the development needs of middle-income countries, especially lower-middle-income countries. In view of the challenges faced by MICs, especially those that are small, vulnerable and highly indebted lower-middle-income countries, Heads welcomed the work of the Commonwealth Ministerial Debt Sustainability Forum (CMDSF) and in particular the recent launch in June 2009 by the World Bank, in partnership with the Commonwealth and other organisations, of a Debt Management Facility to help highly indebted low income and other developing countries. They urged continued action in this regard.

87. Heads extended sincere condolences to those affected by the recent natural disasters in the Asia-Pacific region, especially to those affected by the earthquake and subsequent tsunamis in Samoa and Tonga. They noted that small island developing states (SIDS) are among the most vulnerable to the impacts of natural disasters, and reaffirmed their commitment to supporting disaster risk reduction efforts in line with the Hyogo Framework for Action and the Mauritius Strategy.

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