TSUNAMI UNDERSCORES UNCTAD’S WARNINGS ON ISLAND VULNERABILITY

 

(Reissued as received.)

GENEVA, 10 January (UNCTAD) -- Fragile island economies like the Maldives that were battered by the recent tsunami and remain highly vulnerable to other natural disasters need special support measures if they are to survive and integrate more fully into the world economy, the United Nations Conference on Trade and Development (UNCTAD) will plead at an international meeting this week.

“The dramatic setbacks suffered by Grenada, Maldives and parts of the Pacific region last year as a result of major natural disasters have reinforced UNCTAD’s belief that economic vulnerability should be used as a paramount criterion in the treatment of small island developing States (SIDS) by their development partners”, said Carlos Fortin, Officer-in-Charge of UNCTAD, on the eve of the UN-sponsored International Meeting to Review the Implementation of the Programme of Action for the Sustainable Development of Small Island Developing States, which opens today in Mauritius and continues through Friday.  The meeting is expected to pay close attention to that issue, particularly in the aftermath of the tsunami.

Of all the countries struck by the tidal wave and subsequent earthquakes, the island nation of Maldives suffered the most severe damage in proportion to its economic size.  Some 130 of its nearly 200 inhabited islands were seriously affected, with near-total destruction of the tourism infrastructure on several resort islands and of farming capacities in most indigenous atoll communities; 12,000 inhabitants remain homeless.

UNCTAD has been monitoring, and has consistently underlined, the exceptional economic vulnerability of Maldives and other island and low-lying developing countries.

The SIDS are located in some of the world's most vulnerable regions and face “disproportionately high economic, social and environmental consequences”, according to the draft strategy to be discussed at Mauritius.  Ten SIDS are also least developed countries (LDCs), a UN category based on low income, weak human assets and economic vulnerability criteria.  One of the indicators used to measure economic vulnerability is the percentage of population displaced by natural disasters.

About 98 per cent of all the people affected by natural disasters over the past decade live in developing countries.

Island Vulnerability, Inescapable...

External shocks have a particularly acute impact on the SIDS because of their economic concentration:  vulnerability is greatest when the few activities allowed by economic smallness are destabilized by external factors beyond domestic control, such as weather-related disasters, explains Mr. Fortin.  Threats like overfishing or pollution of the seas from shipping are in theory more easily controllable, but not necessarily by the countries most affected by them.  Economic vulnerability is also associated with such risks as fluctuations in international commodity prices or international tourist demand.  The erosion of market preferences for agricultural and industrial goods of vital importance to the SIDS can also be regarded as an economic shock to these countries, which generally face difficulties in diversifying their economies because of structural handicaps relating to remoteness and smallness.

Over the past two decades, the relative importance of the SIDS in global merchandise trade has diminished by half, according to UNCTAD estimates, from 0.4 per cent of world exports of goods in 1980 to 0.2 per cent in 2000, while their share of global trade in services remained stable, at 0.7 per cent of world service exports.  In the light of the UN Economic Vulnerability Index, which defines the threshold at which countries are particularly susceptible to risks and warrant special attention from agencies providing assistance, the SIDS are 34 per cent economically more vulnerable than other developing countries.  Largely as a result of their exposure to natural disasters, their agricultural production is 31 per cent more unstable than that of other developing countries, and their exports of goods and services more unstable by 10 per cent.  In 2001, merchandise export concentration -- a factor of economic dependence -- was 24 per cent greater in SIDS than in other developing countries.

The SIDS that have been highly dependent on market access preferences and are now facing the problem of preference erosion need special compensatory support, UNCTAD argues.  In particular, they need more official development assistance (ODA).  The ODA to these countries, has been declining over the past decade.  Between 1993 and 1999-2002, the average annual inflow of ODA per capita decreased from $202 to $140 in the least developed SIDS, from $249 to $150 in the non-LDC SIDS that receive maximum concessionary treatment from the World Bank, and from $101 to $84 in other SIDS.

...And Island Prosperity Requires Special Efforts

Globalization offers SIDS valuable economic opportunities in the same way as it does other countries, says Mr. Fortin.  However, “SIDS also suffer from specific intrinsic disadvantages -- disadvantages which call for special measures from their development partners“.  Paradoxically, the eligibility of the SIDS for concessionary financing tends to evaporate because of the apparent progress many of these countries have demonstrated in terms of per capita income.  “Prosperity is temporary, but vulnerability is permanent”, he adds.

UNCTAD helps the SIDS take better advantage of the forces of globalization.  Its SIDS-related research and analysis and technical cooperation focuses on a range of issues, from economic vulnerability to supply capacity in sectors where they may have a significant comparative advantage.  Such sectors include international tourism and cultural and creative industries like music and media, which a number of island States have already begun targeting as priority areas for economic diversification and value added, as well for ensuring cultural diversity.

The sustainable development of the SIDS also involves improving their access to information and communications technologies.

UNCTAD Role at Mauritius Meeting

UNCTAD is organizing a plenary panel on “special challenges facing SIDS in trade and economic development” on Tuesday, 11 January (10 a.m. - 1 p.m.), to be chaired by the Minister of Foreign Affairs and International Trade of Mauritius and moderated by Habib Ouane, Director of UNCTAD's Special Programme on the LDCs, Landlocked Developing Countries (LLDCs) and SIDS.

This will be followed by a side event on “trade liberalization, environmental protection and sustainable development:  opportunities and challenges for SIDS”, organized by the UNEP-UNCTAD Capacity-Building Task Force on Trade, Environment and Development, from 1:15 to 2:45 p.m.  Sustainable fisheries management, organic agriculture as a trading opportunity, sustainable tourism development and protection and promotion of traditional knowledge will be discussed under the chairmanship of Ambassador Nassir Abdulaziz Al-Nasser (Qatar), Chairman of the Group of 77.  UNEP Executive Director Klaus Töpfer will deliver a keynote statement to the forum, which will also be addressed by ministers from Cape Verde, Fiji, Jamaica and Mauritius.

On Thursday, 13 January (3 - 6 p.m.), Mr. Fortin will participate in a high-level round table meeting on resource mobilization for SIDS, chaired by Prime Minister Owen Arthur of Barbados.  Mr. Fortin will present the conclusions and recommendations of the 11 January plenary panel on trade and economic development. 

Contacts:  in Geneva, Press Office, +41 22 917 5828, unctadpress@unctad.org or in Mauritius, P. Encontre, +230 466 3100, Pierre.Encontre@unctad.org.

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