The economic characteristics of small states are well documented, and include limited ability to exploit economies of scale, lack of natural resource endowments and high import content - especially of strategic imports such as food and fuel
New index aims to monitor economic resilience of small states
19 June 2008
This index will examine the vulnerabilities of these countries and propose measures to help them withstand ‘economic shocks’
An Economic Resilience Index is being piloted in St Lucia and Seychelles to study how small states cope best with economic shocks.
The index, which has been developed by the Commonwealth Secretariat in collaboration with the Islands and Small States Institute of the University of Malta, will examine their main sources of vulnerability, such as a high degree of economic openness and dependence on a narrow range of exports.
It will also help identify policies that enable a country to withstand and bounce back from external shocks, including macroeconomic stability, microeconomic efficiency, good governance and social development.
"There has been considerable debate on the issue of building resilience in small states. This issue is important because it carries the message that these states should not be complacent in the face of their inherent vulnerability," said Constance Vigilance, Economic Adviser at the Secretariat.
"In other words," she added, "they should take measures, possibly supported by the international community, to strengthen their economic, environmental and social resilience."
The economic characteristics of small states are well documented, and include limited ability to exploit economies of scale, lack of natural resource endowments and high import content - especially of strategic imports such as food and fuel. Other characteristics include dependence on a narrow range of exports and a high degree of economic openness. These features render small states exposed to external economic shocks.
The outcome of this pilot assignment will be presented to the 2008 Annual Small States Forum. It is hoped that the pilot exercises in St Lucia and Seychelles will encourage other small states to undertake an economic vulnerability and economic resilience profiling.
In the first pilot exercise, St Lucian officials met to discuss the Index at a consultative conference on 16-17 June 2008. The second pilot exercise is scheduled for 25-26 June 2008 in Seychelles. The Secretariat is collaborating with the Small States Network for Economic Development and Professor Lino Briguglio on this project.
delicious
digg
reddit
facebook
stumbleupon