Recently, the UN General Assembly officially launched the “Multidimensional Vulnerability Index” (MVI) that would help small island states and developing nations gain access to low-interest financing.
- The index is set to act as a complement to GDP and other development metrics.
- Since the 1990s, small island developing states (SIDS) that are not poor enough in terms of GDP per capita to access low-interest development financing but nonetheless face vulnerability to external shocks like climate change have been calling for such a measure.
- The MVI gives international financial institutions access to another tool that comprehensively assesses a country’s vulnerability to external shocks, including economic, climate, and health-related disruptions, and its capacity to respond and recover.
- It will act as a complement to GDP in better guiding lending institutions in determining a country’s eligibility for financial support.
- The UN Assembly mandates the UN and a committee of independent experts keep it up to date.
- It incorporates indicators linked to a state’s structural vulnerabilities and lack of economic, environmental and social resilience. These factors include import dependency, exposure to extreme weather events and pandemics, impacts of regional violence, refugees, demographic pressure, water and arable land resources and mortality of children under five.
- The resolution notes that use of the index is voluntary, but calls on organs of the UN and multilateral development banks to consider using the new tool to complement existing policies.
