Financing for development in small island developing states: A focus on concessional finance

To what extent does financing for development address the specific needs and challenges identified in the previous chapter that are associated with the vulnerability of small island developing states (SIDS)? This chapter attempts to answer this question. It illustrates the financing for development landscape for SIDS: it analyses the composition and evolution of the full range of external financial flows (e.g. remittances, foreign direct investments, private grants, as well as concessional finance) and highlights some of the challenges relating to domestic resource mobilisation and debt sustainability. The chapter then focuses on concessional finance from the international community. It explores the scope and nature of flows and approaches to SIDS: the array of development partners involved, the articulation between bilateral and multilateral concessional sources, the sectoral focus and the prevailing co-operation modalities in different SIDS contexts. The analysis in the chapter capitalises on the wealth of OECD Development Assistance Committee (DAC) statistics and on new statistical sources.