Policy paper

UK–Small Island Developing States (SIDS) development partnership summary, July 2023

Published 17 July 2023

Introduction

The International Development Strategy places development at the heart of the UK’s foreign policy. It sets out a new approach to development, anchored in patient, long-term partnerships tailored to the needs of the countries we work with, built on mutual accountability and transparency. This approach goes beyond aid and brings the combined power of the UK’s global economic, scientific, security and diplomatic strengths to our development partnerships. Our 4 priorities are to deliver honest, reliable investment, provide women and girls with the freedom they need to succeed, step up our life-saving humanitarian work, and take forward our work on climate change, nature, and global health. The Integrated Review Refresh reiterates that sustainable development is central to UK foreign policy and sets out how the UK will go further and faster on development to reduce poverty and reinvigorate progress towards the Sustainable Development Goals. This Development Partnership Summary details how the International Development Strategy and Integrated Review Refresh will be put into practice with Small Island Developing States (SIDS).

Small Island Developing States (SIDS) context

SIDS are a significant part of our global community. They represent 20% of United Nations (UN) members, nearly half of the Commonwealth and steward 30% of global oceans. They are at risk from climate change, natural disasters, global economic shocks, and higher proportionate spend due to their size. Central to the problems facing SIDS is the fact that they are on average among the most vulnerable of all developing states and this continues even as their incomes grow. SIDS are looking to international partners to work with them towards a green, sustainable, and resilient economic recovery.

SIDS are particularly vulnerable to the climate crisis and the rise of global temperatures above 1.5°C. In many SIDS, over 10% of the population will be threatened by chronic coastal flooding or permanent inundation by 2100, displacing close to 40 million people. SIDS are frequently hit by climate-related extreme weather events, resulting in extensive loss of lives and livelihoods. Globally, SIDS make up two thirds of the countries that suffer the highest relative financial losses from natural disasters.

SIDS are more trade dependent than other developing states due to their narrow, undiversified economies, have higher levels of debt and have greater dependency on development assistance. SIDS are susceptible to shocks in the international economy and their economies are on average the worst affected following COVID-19 and the ensuing economic crisis, with some suffering double digit declines in Gross Domestic Product (GDP). Current forecasts suggest slow economic recovery at least until 2025 and an early impact has been rising levels of external debt.

Promoting resilience and reducing aid dependency for SIDS are mutually beneficial goals. While the diversity of SIDS has previously encouraged a purely regional focus (eg Caribbean, Pacific), SIDS have developed a global worldview that the UK will reflect in its approach. The UK will use both policy engagement and programmes to support sustainable economic diversification, reduced dependency, and improved climate and economic resilience.

The UK is the right international actor to offer G7 and Organisation for Economic Co-operation and Development (OECD) leadership on SIDS issues. We will seek multilateral solutions using the UK’s convening power to drive debate, ambition, and action. Acting as a champion of SIDS, we work in partnership with other donor countries including the US, Canada, France, Germany, Japan, the Republic of Korea, India, Australia, and New Zealand.

Why and how: the UK’s development offer with SIDS

The UK’s development offer with SIDS is directly informed by the IDS and detailed in the UK SIDS Strategy 2022 to 2026. Our international engagement and programmes are driven by the vision that it sets out.

Climate resilience

The UK has advocated for simplified procedures that are fit for purpose and more suitable for low-capacity states and has taken a lead on pressing international providers of climate and concessional finance to reduce the barriers for small states. We have acted with like-minded donors to call for action from providers of finance to press for eligibility and graduation processes to be made fit for purpose. This has included a UK-led Access to Finance roundtable process, and a joint ‘Call to Action’ launched by the COP26 President in Glasgow.

We will continue to work with the international community to ensure that financial support to SIDS is more effective, transparent, and sustainable, developing a set of principles for improved engagement and impact. Through the Small Island Developing States Capacity and Resilience Programme (SIDAR), we will support international organisations and SIDS governments to strengthen systems that will allow governments to better access and utilise wider climate finance and other concessional funding.

The UK will champion SIDS issues in the context of the Commonwealth, supporting efforts to deliver a small states advocacy strategy, and work with like-minded donors and the OECD Development Assistance Committee (DAC) to improve the current Official Development Assistance (ODA) eligibility and graduation system to better account for SIDS unique vulnerabilities. We will support processes such as the UN High Level Panel to explore the role of Multi-dimensional Vulnerability Indices.

Recognising that SIDS are an influential voice on climate action, the UK COP26 Presidency amplified the voice of SIDS and sought to drive action on their priority issues at the Glasgow Summit. The UK provided prominent platforms for SIDS leaders and facilitated extensive consultations with, and support for, SIDS leaders and delegations. The UK has built on COP26 by continuing to encourage the international community to deliver on their climate and nature finance commitments and the need for ambitious climate action including on mitigation, adaptation, and loss and damage.

The UK is the Ocean Chair of the High Ambition Coalition for Nature and People, as well as leading the Global Ocean Alliance – both of which helped secure an ambitious commitment to protect 30% of land and ocean by 2030 as part of the Kunming-Montreal Global Biodiversity Framework. To ensure SIDS views are represented, the UK has joined the SIDS Coalition for Nature and will advocate for support for SIDS to conserve and manage their unique biodiverse ecosystems. We also advocate for SIDS as an important negotiating bloc in the negotiations for the Global Plastics Treaty.

Economic resilience

The UK recognises the need for new approaches to financing (such as British International Investment (BII)) to support economic diversification and resilience, the significant infrastructure needs across SIDS and the need for higher quality investments.

We will implement the UK’s new trading arrangements with SIDS, including Economic Partnership Agreements with the Caribbean and Pacific, and deliver a more generous Generalised Scheme of Preferences to provide duty-free and quota-free access to the UK market for Least Developed Countries.

The UK is committed to debt resolution through multilateral fora. Through these fora, the UK has developed and participated in a historic Debt Service Suspension Initiative. The UK will play a role in boosting awareness and technical understanding of such global initiatives – bringing together SIDS and expert bodies to share information on both mechanisms for debt treatment, and practical constraints facing potential users.

Between 2016 and 2021, the UK’s Commonwealth Marine Economies Programme supported Pacific and Caribbean Commonwealth SIDS governments to better understand and manage their maritime assets, so they can develop sustainable and climate resilient economies. We will continue to promote economic resilience. This includes sustainable marine economies through the Sustainable Blue Economies Programme which will enhance the resilience of ODA-eligible SIDS to the impacts of climate change and economic shocks, supporting better ocean management, improved livelihoods, and greater use of nature-based solutions. The Sustainable Blue Economies Programme forms part of the wider Blue Planet Fund.

Who we work with

Our development work is already deepening our relationships and our advocacy including with our G20 partners. Working with our partners is essential if we are to deliver this new approach. Only with collective agreement from key actors will we secure meaningful reform on the international stage.

The UK advocates for SIDS interests at key international bodies including OECD and UN agencies to secure multilateral processes better adapted to SIDS challenges. We work with key SIDS bodies such as the Alliance of Small Island Developing States, the Commonwealth, the Caribbean Community Climate Change Centre, the Global Environment Facility, the Asian Development Bank, think tanks such as the Overseas Development Institute and the Caribbean Community (CARICOM). We also work in partnership with other countries including:

• the US and Canada in the Caribbean
• the US, Canada, Germany, France, Japan, the Republic of Korea, Australia, and New Zealand in the Pacific
• India, Australia, and the US in the Indian Ocean

Key programmes

Recognising the global worldview that SIDS have developed, our programme work in SIDS is underpinned by a single UK SIDS Strategy. Our programmes cover the three geographical regions recognised by the UN for SIDS: the Caribbean, the Pacific, and the Atlantic, Indian Ocean and South China Sea.

The UK has made an international commitment to recognise SIDS as a special case for sustainable development. We recognise their unique vulnerabilities and the need for fair and evidence-based approaches to SIDS issues by international bodies – including on climate, ocean governance, access to development finance, and UN development system reform.

Our Small Island Developing States Capacity and Resilience Programme (SIDAR) 2021 to 2026 will provide capacity support that will strengthen systems in ODA-eligible SIDS and improve international funding and policy frameworks so that they are better geared to the lower capacity and unique challenges facing SIDS. This will enable governments to better access and utilise the climate finance and other concessional funding available to them to increase climate action and deliver for local communities.

Our Sustainable Blue Economies Programme (SBE) 2022 to 2028 builds on the work of the UK’s Commonwealth Marine Economies Programme and forms part of the UK Government’s Blue Planet Fund. It will enhance the resilience of ODA-eligible SIDS and their economies to the impacts of climate change and economic shocks, including through better ocean management, improved livelihoods, and greater use of nature-based solutions. In doing so, the programme will support the UK’s Global Biodiversity Framework commitment to protect at least 30% of the global ocean by 2030.

Together, these 2 programmes aim to support SIDS to have a more flexible development pathway, be better adapted to climate change, better able to protect their ocean biodiversity, and benefit from resilient, sustainable, green/blue economic growth that embraces nature-based solutions.

The UK Government’s SIDS Strategy 2022 to 2026 and programme offer to SIDS is not limited to the FCDO centrally managed programmes mentioned above. Bilateral and multilateral programmes offering support to SIDS in full or in part are also delivered by the UK Government’s Department for Energy Security and Net Zero as well as the Department for Environment, Food and Rural Affairs (DEFRA) and at FCDO posts including the Caribbean and Pacific regions. FCDO’s SIDS and Small States Hub acts as the lead and oversight on the UK’s offer to SIDS.

Financial information

Initial allocations have been set internally to deliver the priorities set out in the International Development Strategy (May 2022) and the Integrated Review Refresh 2023, based on the FCDO’s Spending Review 2021 settlement.

The department’s spending plans for the period 2022 to 2023 to 2024 to 2025 have been revisited to ensure His Majesty’s Government continues to spend around 0.5% of Gross National Income (GNI) on ODA. This was in the context of the significant and unexpected costs incurred to support the people of Ukraine and Afghanistan escape oppression and conflict and find refuge in the UK, and others seeking asylum. The Government provided additional resources of £1 billion in 2022 to 2023 and £1.5 billion in 2023 to 2024 to help meet these unanticipated costs. The Government remains committed to returning ODA spending to 0.7% of GNI when the fiscal situation allows, in line with the approach confirmed by the House of Commons in July 2021.

The country development partnership summaries include the breakdown of programme budgets allocated to individual countries for 2023 to 2024 and 2024 to 2025. These allocations are indicative and subject to revision as, by its nature, the department’s work is dynamic. Programme allocations are continually reviewed to respond to changing global needs, including humanitarian crises, fluctuations in GNI and other ODA allocation decisions.

These figures do not reflect the full range of UK ODA spending in each individual country/region. This is because they do not include spend delivered through core contributions to multilateral organisations, and country allocations do not include regional programmes delivered by the FCDO’s central departments. Other UK Government departments also spend a large amount of ODA overseas. Details of ODA spent by other UK government departments can be found in their Annual Report and Accounts and the Statistics for International Development.

FCDO ODA Allocation ^{[footnote 1]}

Allocated ODA budget financial year 2023 to 2024	Indicative ODA budget financial year 2024 to 2025
Up to £9,520,000 (100% climate)	Up to £11,000,000 (100% climate)

1. FCDO SIDS and Small States Hub funding only (covering the SIDAR and SBE programmes) ↩