Government officials and scholars from Barbados, China, Mauritius, Singapore, and Sri Lanka joined UN economists from Geneva and New York for an insightful and thought-provoking debate on how to tackle economic vulnerabilities in Small Islands Developing States (SIDS) through targeted development strategies and strengthened multilateralism, including South-South Cooperation.
In his opening remarks, Mr. Richard Kozul-Wright, Director of the Division on Globalization and Development Strategies of UNCTAD, briefed the audience about the theme and preparation of UNCTAD XV to be hosted by Barbados, a SIDS country. He further shared the concerns about the finance and liquidity strains faced by developing countries, including SIDS, and stressed that enhancing resilience is an indispensable policy framework for boosting economic recovery out of crisis and building protection from future shocks. He introduced a South-South Cooperation project that UNCTAD is implementing with Barbados and China and also highlighted the importance of a revived multilateralism, including South-South Cooperation, in assisting SIDS to respond to multiple challenges.
The panel discussion was moderated by UNCTAD’s senior economist Mr. Igor Paunovic, in which guest speakers presented an excellent debate and well echoed the UNCTAD XV theme, namely “From Inequality and Vulnerability to Prosperity for All”.
Concerning the special vulnerabilities, beyond the risks posed by Covid-19 and climate change, panelists shared concerns about various challenges for SIDS. Ms. Tishka Francis, Head of the Small Island Developing States (SIDS) Sub-Programme in the UN-OHRLLS, gave a comprehensive picture of vulnerabilities for SIDS documented by SAMOA Pathway and other internationally agreed documents that include geographic remoteness, small scale market, high dependence on trade but without integration to global value chains, high debt burdens, social protection issues, long-term development financing problems, etc. Mr. Chris Sinckler, former Minister of Finance of Barbados, traced the country’s economic history since its independence including both business cycles and evolution of the economic structure, warning that Barbadian economy remained highly exposed, very concentrated, and extremely vulnerable to external economic shocks. He is very concerned with the Covid-19 shock to the Barbadian economy, which has caused economic output to decline close to 18% in 2020 with a lot of jobs lost.
Mrs. Bibi F. A. Raman-Ahmed, Permanent Secretary in the Ministry of Industrial Development, SMEs and Cooperatives of Mauritius, briefed about vulnerabilities of Mauritius as a SIDS, including limited resources, small size, high transportation cost to export market due to remoteness, etc. She shared the experience of the country in dealing with Covid-19 crisis, including both health and economic policy response. Ms. Gladys Huan, Deputy Director in Ministry of Trade and Industry of Singapore, agreed with other speakers on the common concerns and interests to SIDS regarding both environmental and economic vulnerabilities. She stressed that the small size and open economy are making SIDS particularly vulnerable and disproportionately impacted with Covid-19 shock, in areas ranging from trade to production. Mr. Susiri Kumararatne, former Ambassador of Sri Lanka to the WTO, shared his views from the perspective of a non-SIDS developing economies. He believed Sri Lanka faced difficulties similar to that of SIDS, like the Covid-19 shock to its economy, in particular the industrial production, trade balance, decreased trade revenue and remittances, and declined FDI inflows. He predicted it might take two years to get the economic situation back to normal in the country.
Mr. Winston Moore, Deputy Principal of University of West Indies in Barbados, and Mr. Zhou Mi, Senior Research Fellow of Chinese Academy of International Trade and Economic Cooperation, both shared their research which highlighted the issues of economic volatility and export market concentration, as well as the associated impacts on uncertainty, poverty and income distribution for SIDS, or more generally for other developing countries.
The panelists also presented their policy recommendations or shared experience in how to cope with vulnerabilities and building resilience in SIDS economies. According to them, economic diversification is the key. Ms. Huan shared the strategy of Singapore that entails diversifying economic structure (developing manufacturing sector, building modern services, digitalizing the economy), export markets and supply sources (manpower, food). Because of economic diversification, and despite the Covid-19 shock, some sectors like construction and ICT are projected to continue with growth to support the economy of Singapore. Mr. Moore also emphasized the benefits of diversification in reducing volatility and vulnerabilities. He further added that building green tourism is imperative for the Caribbean region. Mrs. Raman-Ahmed shared the experience of Mauritius on how to promote industrialization and enhance resilience of manufacturing sector through a strategy which was developed with assistance from UNCTAD.
To enhance resilience and diversification, enabling policy environment at both national and international level is necessary. Ms. Francis, Mr. Sinckler, Mr. Kumararatne and other panelists emphasized multiple aspects of an international support for development strategies of SIDS, such as concessional development financing, technical support and technology transfer, comprehensive debt relief and suspension, technological innovation, digital transformation and e-commerce, building infrastructure, sustainable transport, and capacity building. International cooperation, including South-South and Triangular cooperation, were recognized by panelists as vital for the efforts of SIDS in enhancing resilience and reaching 2030 Agenda. That might include both “hard” cooperation such as trade, infrastructure investment, and “soft” cooperation like policy experience sharing and peer-learning. Mr. Paunovic, the moderator, further raised the issue of the role of regional value chains (RVCs) to enhance economic resilience of SIDS and was positively responded by Mr. Sinckler and Mr. Moore in highlighting the importance of regional integration.
The discussion was wrapped up and closed by UNCTAD’s economist Mr. Dawei Wang.
UNCTAD15 pre-event: Enhancing Economic Resilience in Small Island Developing States - Perspective from South-South Cooperation
COVID-19 shock has negatively impacted global economic growth scenario. According to UNCTAD estimates, the global output loss might be as much as 10 trillion USD by the end of 2021. Due to the vulnerable economic structure, Small Island Developing States (SIDS) may even suffer more, not only from a series of concomitant crisis, but also from double-squeezed financial and policy space, which may cause further concerns on their efforts in achieving 2030 Sustainable Development Agenda. To reach sustained recovery and get SDGs attainment back on track, it is widely recognized that governments must adopt effective and targeted policy measures to enhance economic resilience and diversification. Apart from the actions and policy strategies at national level, reviving multilateralism and strengthening South-South Cooperation can facilitate such efforts significantly.
UNCTAD has launched a project titled “Promoting Economic Diversification and Resilience in Barbados for a Sustained Recovery from Covid-19 Shock”, which aims to assist Barbados, through policy research and analysis, capacity building and promoting South-South Cooperation, to strengthen its economic diversification and resilience to reach sustained recovery and advance progress to 2030 Agenda.
Barbados will host the upcoming UNCTAD XV in October, which will provide a great opportunity for the international community to pay more attention on the special needs of SIDS and support their efforts in reaching 2030 Agenda.
The webinar brings together policy makers and researchers from various developing countries and UN agencies and address a wide audience. The discussion focuses on the vulnerabilities of SIDS and the possible policy strategies to enhance their economic resilience, particularly the role of South-South Cooperation, which is also highly relevant to the theme of UNCTAD XV, namely “From Vulnerabilities and Inequalities to Prosperity for All”.
Questions to be addressed:
- What are the vulnerabilities of Small Island Developing States in the globalized world? What are the key lessons and experience in responding to the recent Covid-19 Shock?
- At national level, how could the government formulate targeted policy to address the challenges and enhance economic resilience of SIDS? How would the digital revolution and climate change might impact the policy strategies?
- At regional and international level, how could South-South Cooperation better contribute to the SIDS in their efforts of enhancing economic resilience and reaching 2030 Agenda?
Moderator: Mr. Igor Paunovic, Senior Economic Affairs Officer, UNCTAD
Wrap up and closing
The link to the meeting with further instructions to ensure easy connectivity will be provided closer to the meeting date.
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Richard Kozul-Wright is the director of UNCTAD’s globalization and development strategies division.
He has worked at the UN in both New York and Geneva and published widely on economic issues, including in the Economic Journal, the Cambridge Journal of Economics, the Journal of Development Studies, and the Oxford Review of Economic Policy.
He has co-written books such as The Resistible Rise of Market Fundamentalism with Paul Rayment and co-edited volumes of Transnational Corporations and the Global Economy, Economic Insecurity and Development, Securing Peace, Climate Protection and Development and Industrial Policy.
He also co-edited Transforming Economies: Making Industrial Policy Work for Growth, Jobs and Development with the International Labour Organization.
He holds a PhD degree in economics from the University of Cambridge in the UK.