The United Nations has been recognizing the particular problems of Small Island Developing States (SIDS) since 1994, after UNCTAD had advocated special consideration of "island developing countries" for two decades. However, the UN never established criteria to determine an official list of SIDS. In this context, UNCTAD uses an unofficial list of 29 SIDS
, for analytical purposes only.
SIDS are deemed to be facing a greater risk of marginalization from the global economy than many other developing countries. This essentially results from the combined adverse consequences of their:
- small size,
- remoteness from large markets (a factor of high transport costs), and
- high economic vulnerability to economic and natural shocks beyond domestic control.
With their fragile ecosystems, SIDS are also highly vulnerable to domestic pollution factors and globally induced phenomena such as sea level rise.
Over the last two decades, the share of SIDS in global merchandise trade diminished by half (from 0.4% of world exports of goods in 1980 to 0.2% in 2003), while their share of global trade in services remained stable (0.7% of world exports of services). SIDS are estimated to be economically 34% more vulnerable than other developing countries, partly for the following reasons: agricultural production in SIDS, notably as a result of their exposure to natural disasters, has been more unstable than that of other developing countries by 31%, and their exports of goods and services have been more unstable by 10%. In 2001, SIDS were experiencing a level of merchandise export concentration 24% greater than that of other developing countries.
The Mauritius Strategy recognizes the seriousness of the disadvantages most SIDS suffer from in the global economy, and implicitly, the need for a range of answers to these problems. Since 1985, the World Bank has maintained a "small island exception" in its policy of eligibility for IDA concessionary treatment. In the WTO, proposals for special treatment modalities of interest to SIDS have been considered under a "Work Programme on Small Economies" since 2002.