To Reap Benefits of ‘Massive’ Blue Economy, Small Islands, Least Developed Coastal States Need Multidimensional Vulnerability Index That Addresses…

With 22,000 Tons of Fish Stolen Each Year,World Trade Organization Chief Hails Agreement on Harmful Subsidies

LISBON, June 28 An historic World Trade Organization (WTO) agreement to end harmful fishing subsidies set the stage for participants in an interactive dialogue held alongside the 2022 Ocean Conference today to outline long overdue measures that would help small island developing States and least developed coastal nations reap the benefits of the estimated $2.5trillion marine economy.

Trade is a solution to unlocking opportunities presented by the blue economy, World Trade Organization Director General Ngozi Okonjo-Iweala told Governments, civil society representatives and others participating in a discussion on Promoting and strengthening sustainable ocean economies, in particular for small island developing States and least developed countries. The accord reached two weeks ago by the 164WTO members is the fruit of 21years of negotiations.

She said the ban is particularly important for small island developing States, as 22,000tons of fish are stolen each year from coastal communities. This agreement speaks volumes about the need for global solidarity to solve problems, she said, especially those affecting global public goods such as the oceans. A $10million fund was also created to provide technical assistance and improve fisheries management rules.

To realize the economic potential, she said small island developing States and least developed coastal countries will need strategies guaranteeing the sustainability of their traditional activities and efforts to develop emerging industries, such as maritime transport, port activities, shipbuilding, marine biotechnology, sustainable tourism and aquaculture.

Marine trade generates an estimated $2.5trillion annually, she added, making it the seventh largest economy in the world. WTO and multilateralism provide a predictable trading environment and facilitate flows and investments. WTO rules, together with major advances in finance, transport and communications, have enabled innovation, supported the creation of value chains and can now support the sustainable blue economy.

Next, Mari Pangestu, Managing Director of Development Policy and Partnerships for the World Bank Group, focused on coastal marine ecosystem assessment, stressing that overexploitation of the ocean represents $80billion in losses each year. To strengthen the resilience of coastal communities and ecosystems, the World Bank supports initiatives to combat ocean acidification and advocates for approaches to developing a sustainable blue economy. The aim is to help countries diversify their sources of economic growth by focusing on sustainable treatment of ocean activities, she explained, citing island States such as Cabo Verde as examples.

In recent years, she said the World Bank has also helped Bangladesh on the issue of plastic waste and supported island countries such as Cabo Verde and Sao Tome and Principe to develop the competitiveness of their sustainable tourism industries. These actions require the necessary financing but also demonstrate innovation to promote the blue economy in all its aspects.

Usha Rao-Monari, Under-Secretary-General and Associate Administrator of the United Nations Development Programme (UNDP), said the estimate that the global ocean economy comprises $2.5-3.5trillion of global gross domestic product (GDP) does not consider the cumulative socioeconomic costs of poor ocean management from overfishing to nutrient pollution to invasive species making its real value closer to $1trillion a year.

These massive losses translate into fewer jobs and livelihoods, she explained, as well as less tax revenue for States. In these circumstances, coastal small island developing States and least developed nations need technical and financial assistance, along with capacity-building in a wide range of ocean management tools, such as compliance and monitoring of fisheries, marine spatial planning, the establishment of marine protected areas and the fight against marine pollution.

On financing, Ms.Rao-Monari said these countries need help to remove barriers to private investment and put in place innovative instruments, such as blue bonds, debt-to-nature swaps and blue carbon financing. In addition to their remoteness, small population, narrow fiscal space and high dependence on economic sectors severely affected by the pandemic, they are not eligible for concessional financing, due to their classification as middle- and high-income countries.

In response to calls by small islands for a reassessment of their eligibility, UNDP has developed a multidimensional vulnerability index reflecting the traditional and emerging risks faced by all developing countries. It shows that most small island developing States are much more vulnerable than their income level alone may suggest. If this index were used as a financing criterion, rather than per capita income, small island developing States would save an average 1.5per cent of their GDP per year in interest payments, she explained.

In turn, Sanda Ojiambo, Assistant Secretary-General of the United Nations Global Compact, stressed the critical importance of the blue economy for coastal small island developing States and least developed countries whose ocean resources are a way to recover from the pandemic and move towards inclusive and sustainable development. As these projects require investment, she welcomed that the Global Compact saw exponential growth in private sector environmental commitments in 2021.

Business leaders are recognizing the urgent need for innovative solutions, she said, without which the global economy cannot be expected to move to net-zero carbon. In June 2022, nearly 3,200companies committed to the Science Based Targets initiative, of which the Global Compact is a founding partner. These companies cover more than a third of the global economy, with a market capitalization of $38trillion. Innovative financial mechanisms that catalyse private sector investment can also help these countries overcome some of the barriers preventing them from accessing capital to develop the blue economy.

In the same vein, Ricardo Mourinho, Vice-President of the European Investment Bank, said the value added by the blue economy is $1.5trillion, which would allow it to sit at the G7 table if it were a State, according to Organisation for Economic Cooperation and Development (OECD) estimates. If investments are made, the blue economy could more than double in value by 2030, making it one of the fastest and most sustainable economies in the world. But the lack of investment would need to be addressed, which is why the European Investment Bank, Governments, companies, banks, insurers and international financial institutions must do more to leverage public funds and generate private investment.

He said Governments would be tasked with better regulation to properly internalize climate risks, while insurers and banks would assess these risks to facilitate private investment. Recalling that the Bank has aligned all its activities with the Paris Agreement on climate change since 2021 and devotes more than 50per cent of its resources to climate and the environment, he assured that the institution has long been deeply invested in the blue economy. In particular, it has financed a third of the offshore wind farms in Europe, as well as the first floating wind farm, he said.

Rounding out the panel, Danny Faure, President of the Danny Faure Foundation and former President of Seychelles, estimated that a third of global investors are now interested in the sustainable blue economy. They are even more so when they see what island countries like Seychelles are doing: issuing blue bonds to finance the blue economy. Based on scientific data, Seychelles has decided to protect 30per cent of its ocean areas, allowing it to build resilience and support fisheries. This example must be followed around the world, he said, highlighting his countrys pioneering role in protecting the oceans, including within a coalition of 10countries in the Western Indian Ocean.

In the discussion that followed, the Prime Minister of Fiji, speaking for the Pacific Islands Forum, stressed that small island developing States cannot choose between preserving marine ecosystems and developing an ocean economy. In his view, the two can go hand in hand by finding a responsible balance between growth, social inclusion, livelihoods and nature protection. Countries can create a sustainable blue income stream that injects funds directly into their societies, helping to rebuild after disasters and boosting climate resilience.

We know this because we do this, he said, expressing regret that Goal 14 is the least funded and that there are no markets for carbon sequestration or coastal protection. His counterpart from Tonga said that full recognition of the special needs of small island developing States, particularly those in the Pacific, would go a long way towards strengthening the development of sustainable ocean-based economies. The achievement of target 14.7 of the 2030 Agenda must include the sustainable management of fisheries, aquaculture and tourism, which requires detailed knowledge of the specific requirements of island nations.

That view was shared by the Minister of Health of Antigua and Barbuda, who highlighted the vulnerability of small islands to external shocks, such as the impact of climate change or fallout from the COVID-19 pandemic. In trying to recover, Antigua and Barbuda is taking on more debt because it lacks access to preferential financing, he lamented. To remedy this situation, he called for the development of a multidimensional vulnerability index, as GDP alone does not measure the fragility of States. Ocean-based economies in island nations cannot be strengthened without support from partners around the world, the Maldives Environment Minister added. This means finalizing work on a multidimensional vulnerability index for small island developing States and least developed countries.

The Minister of Development of Trinidad and Tobago agreed that small island developing States lack the tools to take full advantage of the blue economy, calling for stronger partnerships to enable technology transfer and strengthened institutional and legal frameworks. She was joined by Swedens Minister for Cooperation, for whom the tools shared with these nations must be adapted to all regions, a proposal that China has endorsed. This also means financially, the Vice-Minister of International Cooperation of the Dominican Republic pointed out, expressing hope that new flows would be created to help small island developing States and least developed countries strengthen their national capacities.

Financing flows must be expanded quickly, as the investment gap is widening, warned the speaker from the Ocean Risk and Resilience Alliance. Priority must be given to increasing the resilience of the 250million people in coastal areas, who are highly vulnerable to climate change. The representative of Ireland, another island State, announced the release of $10million in aid to promote the blue economy in small island and least developed countries, as they are victims of climate change when they have contributed the least.

For its part, the Food and Agriculture Organization (FAO) is supporting the capacity of small island developing nations to address the effects of climate change in key sectors of the ocean economy, said its Deputy Director-General, welcoming the implementation of the new Doha Programme of Action for Least Developed Countries. Small islands and coastal least developed countries must benefit from state-of-the-art technology to protect the oceans, added Singapores delegate, supported by Papua New Guineas representative.

The Prime Minister of Belize, meanwhile, recalled that more than half of the population of his country depends on sectoral activities related to ecosystems and coral reefs. He expressed regret that Government efforts to link the health of the ocean with economic growth in Belize were little imitated at the global level. Indeed, only 8per cent of the oceans are protected and a third of fish stocks are overexploited, he stressed, estimating that protecting 30per cent of the oceans, as Belize is doing in its territorial waters, would preserve fish stocks, increase resilience and help countries cope with climate change.

The African continent also has an important role to play in ocean action, the African Union Commissioner for Agriculture said, noting that out of 55member States, 39are island or coastal nations and therefore, rich in blue resources, including mangroves and coral reefs. For this reason, the African Union post-COVID-19 recovery plan includes ocean-anchored climate solutions. Indias representative highlighted her countrys assistance to 18small island developing States and least developed countries through 59blue economy projects, while the Director of International Law in Mexicos Ministry of Foreign Affairs expressed pride that her country is a member of the High-Level Panel for Sustainable Global Ocean Economy.

The Minister of Transport and Nature of Aruba, an island under the Kingdom of the Netherlands, highlighted his countrys measures to reduce marine pollution, starting with the ban in 2017 on plastic bags, and more recently, single-use plastics. He said he is considering a ban that would also hit recycled plastic. The representative of Portugal recalled that his country had just created the most important marine protected area in the Atlantic Ocean in the Madeira archipelago.

Co-chaired by Abraao Vincente, Cabo Verdes Minister for the Sea, and Espen Barth Eide, Norways Minister for Climate and Environment, the interactive dialogue was moderated by Kristian Teleki, Head of the Secretariat of the High-Level Panel for Sustainable Ocean Economy and Director of the Group of Friends of Ocean Action.

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To Reap Benefits of 'Massive' Blue Economy, Small Islands, Least Developed Coastal States Need Multidimensional Vulnerability Index That Addresses...