Male’, Maldives, 17th April 2024 – Ibrahim Faisal, the Minister of Tourism for the Maldives, delivered a compelling address at the UN High-level Thematic Debate on Debt Sustainability and Socio-Economic Equality for All, urging reforms to the international financial system to better assist Small Island Developing States (SIDS).
In his statement, Minister Faisal underscored the unique challenges faced by SIDS, particularly their vulnerability to climate change and external economic shocks. He emphasized the critical need for significant investments in infrastructure to address these challenges. However, he highlighted the limitations posed by traditional financing options, which often come with high costs and hinder debt sustainability.
“The Maldives, like many other SIDS, faces very high costs when borrowing from external sources,” Minister Faisal remarked. “These increased costs significantly challenge our ability to service debt and limit our capability to invest in infrastructure and other critical developmental needs.”
Minister Faisal stressed that while debt is essential for economic progress, it must be affordable and sustainable. He noted that despite the Maldives’ success in the tourism industry, which has propelled it to middle-income country status, this achievement restricts access to concessional financing, leaving the nation reliant on more expensive alternatives.
“This severely challenges our ability to efficiently service debt and hampers our developmental progress,” Minister Faisal explained. He also highlighted how the high costs of servicing debt divert resources away from essential public services, exacerbating socioeconomic inequalities.
The Minister’s statement called for urgent reforms to the international financial architecture, advocating for initiatives such as debt refinancing and international collaboration to provide relief measures for vulnerable economies. He emphasized the need for affordable borrowing rates for SIDS to prevent financial crises and promote sustainable development.
The Maldives’ active participation in this discussion demonstrates its commitment to seeking sustainable solutions for SIDS on the global stage. The nation recognizes that a thriving tourism industry, a cornerstone of its economy, depends on the stability and prosperity of fellow island nations.
Minister Faisal’s address signals a call to action for the international community to address the financial challenges facing SIDS and ensure their continued development and resilience in the face of global economic uncertainties.
