Transcript Strengths and Weaknesses of Small Islands This paper

THE ECONOMIC VULNERABILITY
INDEX AND SMALL ISLAND
DEVELOPING STATES
A REVIEW OF CONCEPTUAL
AND METHODOLOGICAL ISSUES
Lino Briguglio
University of Malta
Prepared for the Caribbean Regional Preparatory Meeting to Review the
Implementation of the Barbados Programme of Action for the
Sustainable Development of Small Island Developing States
Port of Spain, Trinidad and Tobago, 6-10 October 2003
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ECONOMIC VULNERABILITY OF SIDS
The need for Indicators
It is increasingly being realised that policy and
decision-making require indices to succinctly
summarise tendencies and trends in the
variables under consideration. The advantages
associated with such indices are numerous,
but the most important advantage would
seem to be that these can be used to
represent complex phenomena in a format
which permits easy comparison over time, or
across subjects.
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VULNERABILITY IS MULTI-DIMENSIONAL
Vulnerability is multi-dimensional
 Economic Vulnerability
 Environmental Vulnerability
 Social Vulnerability
 Trade Vulnerability
 Climate Change Vulnerability
 Disaster Vulnerability
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VULNERABILITY IS NOT THE SAME AS
POVERTY
When measuring vulnerability we are not
measuring poverty. We are measuring exposure
to external forces outside one’s control.
However poverty would intensify the drawbacks of
vulnerability.
The “Singapore Paradox”.
Singapore is not a poor country but it is an
inherently vulnerable country. It has built its
resilience as a result of deliberate policy.
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ECONOMIC VULNERABILITY OF SIDS
Economic vulnerability stems from a number
of inherent characteristics of SIDS:
 A high degree of economic openness
rendering these states particularly susceptible
to economic conditions in the rest of the world
 Dependence on a narrow range of exports,
giving rise to risks associated with lack of
diversification.
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ECONOMIC VULNERABILITY (Cont)
 Dependence on strategic imports, in
particular energy and industrial supplies,
exacerbated by limited import substitution
possibilities.
 Insularity, peripherality and remoteness,
leading to high transport costs and
marginalization.
Note:
All these features arise from small size and
insularity which are inherent features of SIDS
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ECONOMIC VULNERABILITY OF SIDS
HAS BEEN PROVEN
That SIDS are more economically vulnerable
than other group of countries has been proven.
Past studies which cover all countries of the
world include:
Briguglio (1992, 1995, 1997, 2003)
Commonwealth Secretariat (1996, 1998, 2000)
Crowards (1999, 2000)
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VULNERABILITY OF SIDS HAS BEEN PROVEN (cont)
At the AIMS Cape Verde preparatory regional
meeting, held in September 2003, it was resolved
that the economic vulnerability of SIDS has been
proven.
An expert group meeting held at the United Nations
Headquarters in December 1997, after reviewing
the vulnerability indices produced until then,
concluded that SIDS, tend to more vulnerable as a
group than other groups of countries.
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VULNERABILITY OF SIDS HAS BEEN PROVEN (cont)
So even if the Environmental Vulnerability Index
and the Social Vulnerability Index are not
completed by August 2004, it should not be
concluded that the case for SIDS vulnerability will
not have been made.
The work carried out so far clearly and rigorously
shows that SIDS are economically vulnerable.
Hopefully after the completion of the EVI and the
SVI, the results will reinforce the findings of the
Economic Vulnerability Index
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VULNERABILITY AND RESILIENCE
When discussing vulnerability, the issue of
resilience often crops up. This term refers to the
ability of an affected subject to recover quickly
from a damaging impact.
Resilience, as defined here, is also associated
with the coping ability of the affected subject,
with regard to vulnerability. It may be
associated also with adaptation.
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VULNERABILITY AND RESILIENCE (Cont)
Recently, there has been considerable debate on
the issue of building resilience in SIDS. This issue is
important because it carries the message that SIDS
should not be complacent, even if inherently
vulnerable. In other words they should adopt
measures to step up economic, environmental and
social resilience.
In addition, the discussion on resilience sheds light
as to why a number of vulnerable SIDS have
managed to do economically do well in spite of
(and not because of) their economic vulnerability.
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VULNERABILITY AND RESILIENCE (Cont)
Briguglio and Galea (2003) constructed an index,
which incorporates an economic resilience
component, calling it EVIAR (Economic Vulnerability
Index Adjusted for Resilience).
The EVIAR helps explain the “Singapore Paradox”
already referred to above, namely that we can
have inherently vulnerable countries, that mostly
though suitable policies, have succeeded in
strengthening their economic resilience, and
overcoming their vulnerability.
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A METHOLOLOGICAL NOTE
The vulnerability index should include components
which relate to inherent features that render
countries vulnerable to forces outside the control.
Being inheret, such features will not change
significantly with policy changes.
Thus openness, export concentration,
dependence on strategic imports and
peripherality are not policy-dependent features.
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A METHOLOLOGICAL NOTE (Cont)
These inherent vulnerability features should not
therefore be associated with bad governance.
In other words, it cannot be argued that SIDS are
vulnerable because of past mistakes.
Measures to cope with or withstand or adapt to
vulnerability are responsive to policy and these can
be grouped under the heading of “building
resilience”.
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A METHOLOLOGICAL NOTE (Cont)
An example from the natural disaster field will
explain this methodological approach:
A disaster such as an earthquake is an event about
which nothing much can be done, policy-wise. That
is we cannot have a policy to stop earthquakes.
But we can have a policy to strengthen
resilience against earthquakes, such as early
warning systems, social preparedness, suitable
construction codes, evacuation procedures, and
social education.
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A METHOLOLOGICAL NOTE (Cont)
This distinction between inherent vulnerability
and policy-responsive resilience permits one to
make the following arguments:
“…SIDS are inherently vulnerable, and nothing much
can be done about that reality. However SIDS should
be helped to take measures to become more resilient
and become better able to cope with vulnerability.”
“Because of their inherent vulnerability, which
cannot be attributed to bad governance, SIDS
deserve to be given special status”.
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BENEFITS OF THE VULNERABILITY INDEX
There are many benefits associated with the
production of a Vulnerability Index:
 The index can draw attention to the issue of
economic and environmental vulnerability of
SIDS, LDCs and other vulnerable countries
 The index presents a single-value measure of
vulnerability based on meaningful criteria and
this can be considered for the allocation of
financial and technical assistance or for assigning
special status to vulnerable countries
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BENEFITS OF THE INDEX (cont)
The index has a number of additional benefits:
 It can support decision-making and can be useful
for setting targets and establish standards,
 It can be used to monitor and evaluate
developments and to provide quantitative estimates.
 It can help to disseminate information on the
issue being investigated, namely vulnerability.
 It helps to focus the discussion, avoiding
irrelevant digressions, given that the components
have to be narrowly defined for quantification.
 Given that a number of components are involved,
the index can promote the idea of integrated action.
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DESIRABLE ATTRIBUTES OF AN INDEX
If the index is to receive support and if it is to be
operational, it has to satisfy a number of criteria:
 Simplicity. One of the advantages of simplicity
is ease of comprehension by decision-takers and
other users of the index. It also permits replication
by third parties for evaluation and verification.
 Affordability. This criterion is related to the
“simplicity” criterion. Data must be relatively easy to
obtain and to process. Preferably it should be
collected as a matter of routine in line with the
information required for the management of a
country.
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DESIRABLE ATTRIBUTES (Cont)
 Suitability for international and temporal
comparisons. The index of the type we are
discussing in this paper (i.e. developed for the
purpose of comparing scores across countries) must
be based on variables which are measured in a
homogenous manner internationally and temporally.
 Transparency. The index should be verifiable
and reproducible by persons other than the original
producer of that indicator. This will be essential for
validation, evaluation and quality control purposes.
This requires that the methodology used should be
clearly explained by those constructing the index.
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CONCLUSION
As stated, the Economic Vulnerability Indices
produced so far indicate clearly that SIDS tend to
be more economically vulnerable than other
groups of countries.
Understanding and measuring vulnerability should
therefore be a priority for all SIDS, and should be
rigorously carried out, in line with the criteria
just listed, particularly transparency.
In addition, the building of resilience against
vulnerability should take centre stage in the
sustainable development strategy of such states.
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THANK YOU FOR
YOUR ATTENTION
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