Prime Minister Mia Mottley on the Vulnerability to Viability (V2V) Compact

In this interview, Prime Minister of Barbados Mia Mottley discusses how affordable, long-term finance and stronger South-South partnerships can help climate-vulnerable countries move from vulnerability to viability.

The V2V Compact aims to help climate-vulnerable countries move from vulnerability to viability. What does that mean in practice?

It means that ordinary people can have access to the things that they need to be able to protect their lives and their livelihoods. If you don't have access to water, you can't live. If you don't have education, you remain ignorant and a victim of your circumstances of birth. Therefore it means the countries that are affected with high levels of functional illiteracy or absence of education are compromised on a development trajectory. More importantly, it means those people and families do not benefit from being able to move out of poverty or lower income status to higher incomes. You can have many problems in the world until you have a health problem — and then you have one problem. So this “vulnerability to viability” is effectively to ensure that governments can bring development, access to water, access to education and access to affordable healthcare to their populations.

How can more affordable and predictable finance help countries become more resilient to crises?

Right now, if we are forced to borrow at high rates, the interest and high debt servicing crowd out other things that are absolutely essential to development at the same time. You may end up building a school with 10-year money, but you do not have enough time to build up the capacity of the children who come out of that school to help you repay the loan.

Or you may put down water mains with 10- and 15-year money, but they may last a century. So why are you being forced to pay for it all in 10 to 15 years? The same applies to hospitals or clinics. Clinics will last 50, 60, 70 years. Why are we being asked to pay for them within 10 to 15 years? It stops us from being able to do other things that are necessary for community development. It stops us from investing money in productive sectors. We need to be able to give ourselves the best possible chance and let what we are doing match the reality of the life of those assets. Let the life of the assets be the guide toward the length of tenor for the repayment of the loan.

If we can build up our education and health sectors and we can guarantee water, then we can bring development in a resilient way. For example, if we have coastal erosion in some of the islands, we run the risk of salt intrusion into the water aquifers, which means that those aquifers are lost forever. If we can get longer-term lending for education, water and health, some of the rest of the money that we have to spend to adapt to the new realities of the climate crisis, or to build greater resilience, will be available.

We ask for this not as an act of charity. In our own country, Barbados, we have created a framework where every employee and every self-employed person will put a quarter of 1 percent of their salary into a resilience and regeneration fund. Employers must match what the employees put in, and the government uses the metric of 0.35 percent of GDP every year to add to that fund. So we are not asking people to help us when we are not helping ourselves. We are helping ourselves, but we recognize that that will not be sufficient to bridge the gap and build the resilience that is necessary to fight the polycrisis.

What role can partners like the OPEC Fund play in supporting the priorities of climate-vulnerable countries?

Being able to have partners such as the OPEC Fund for International Development and other Gulf State sovereign funds work with us on the Vulnerability to Viability Compact for 74 countries and growing is an important statement of the South helping the South. These entities have the capacity to make that difference. They still make a profit and they are still faithful to the mandates of their shareholders. Those who have are pausing to help those who have not yet — and that is the best example not just in international finance, but in morality too.