SPECPOL

(SPECIAL POLITICAL AND DECOLONIZATION

COMMITTEE)
BACKGROUND GUIDE
Agenda: Prevention of Territorial Disputes and State Failure in Small
Island Developing States

ST. STEPHEN’S MODEL UNITED NATIONS ‘18

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Contents

Letter from the Director of Simulations ....................................................................... 3

Letter from the Executive Board……..…………………………………………………………………………4

Proof Accepted in Committee…………………………………………………………………………………….6

Committee Description…………..…………………………………………………………………..……………..8

Introduction to Small Island Developing States (SIDS)..…………………………………………….10

Vulnerabilities Faced by SIDS……………………………………………………………………………………13

International Perspective………………………………………………………..……………………………….25

Conclusion……………………………………………………………………………………………………………….35
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1.0 Letter from the Director of Simulations

We are honoured and delighted to invite you to the tenth edition of St. Stephen’s Model
United Nations hosted by one of the most prestigious educational institutions of the
country and a collegiate society, The Planning Forum, started by Pt. Jawaharlal Nehru
himself. With a legacy of establishment going back to 1881, our college fosters the
essence of a transforming nation itself in its charming historical campus, and it is this
heritage which we wish to extend through the interactions at SMUN ‘18.

We, at SMUN, have come to recognize that in an exponentially expanding MUN culture in
the country, the academic pursuit and quest for debating the merits of ideas has been
waylaid somehow beneath the veneer of numbers. In our opinion, students have the
most to achieve and learn within the ambit of a college-level MUN when it is organized
without the dilutions in the academic impetus as seen in current conferences. Therefore,
it is our humble endeavour to bring quality dialogue back to the entire concept of
articulating diplomacy and informed decision making.

We shall gladly undertake this responsibility, with your participation, in making our five
passionately conceptualized committees a success, and helping us in providing a debate
which truly challenges the status quo as encompassed in areas as diverse as law,
disarmament or human rights, and a timeline of events—past and future.

My organizing committee and I look forward to hosting you in the February of 2018, at
the largest SMUN conference yet, which we hope will go a long way in providing you with
an opportunity to not only debate and learn, but also network, engage with our college’s
student body, and share in our vision for a competitive yet intellectually rewarding
conference. On behalf of the organizing committee of SMUN ’18 and The Planning Forum
of St. Stephen’s College, I invite you to an experience of three days, five committees, a
handpicked executive board, and a peek into what we fondly call the Stephania.

Regards,
Sanaa Alvira
Director of Simulations
The Planning Forum
St. Stephen’s College
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2.0 Letter from the Executive Board

Dear Delegates,

It gives me great pleasure to welcome you to the academic simulation of the UNGA-IV
Committee at St. Stephen’s College Model United Nations Conference 2018. We hope
this experience enriches your public speaking skills and that you learn about a
pressing world issue that complicates the lives of many people in our country as well
as abroad.

Before the conference, it is very important to break the larger agenda into smaller
subtopics and ask yourself questions about the agenda. Making chits and moderated
caucus topics beforehand would give you an edge in moderately larger committees
like the UNGA. It is also crucial to enhance your leadership skills and lobbying capacity
since we will be giving equal importance to overall participation in committee. We
would be using the UNA-USA rules of procedure to facilitate this simulation. You may
consult http://www.unausa.org/global-classrooms-model-un/how-to-
participate/model-un-preparation/rules-of-procedure to clear queries, if any,
regarding the same.

Our agenda is ‘Prevention of Territorial Dispute and State Failure in Small Island
Developing States’. This background guide must not be taken to be exhaustive in
scope. This guide aims at providing you with the foundational knowledge and give
concrete real world examples. Not all aspects of each case are discussed in detail
since our objective is to explain the territorial dispute and state failure as opposed to
finding a solution for each case. However, I have tried to provide extra links for
research under each category to provide a nuanced context. I would take this
opportunity to elaborate upon the criteria for judgment which we will follow in the
committee. We hardly see Executive Board Members spell out the criteria for
judgment in the committee for various reasons. However, since we wish to ensure a
fair simulation, we will elaborate upon the criteria we wish to follow and institute in
the committee to give an equal footing to every delegate participating, as follows:
1. Research [3]
2. Analysis [3]
3. Guidance of Debate (Participation in Moderated Caucus and Unmoderated
Caucus/Lobbying) [2]
4. Policy Considerations (Furtherance/Defence) [2]
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Chits will be given the same recognition as verbal statements in the committee;
however, they will not be given equal marking. While verbal statements (and
demeanour) will be marked out of 10 (as mentioned above), the written statements
will be marked out of 8 (Category 1, 2, and 4)

This does not mean it is okay to bring a notebook full of chits and submit it all to the
executive board! The point behind allowing equal recognition to chits is to promote
the concept of being fair to each delegate. Equal recognition in this context, implies
that the content of the chit needs to be about what is being discussed in the
committee during formal and informal debate (Moderated Caucus only).
Chits which contain information regarding a topic which isn’t the subject of discussion
during GSLs or Moderated Caucuses will not be marked upon.

I shall, to the best of my abilities, ensure that a fair simulation is conducted and there
is ample scope for fruitful and meaningful discussion which paves the way for a
didactic learning experience.

Sincerely,
Varad Choudhary
varad95@gmail.com
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3.0 Proof Accepted in Committee

Evidence or proof is acceptable from the following sources:

1. News Sources:
a. Reuters: Any Reuters (http://www.reuters.com/) article which clearly makes
mention of the fact or is in contradiction of the fact being stated by a delegate in
council.

b. State-operated News Agencies: These reports can be used in the support of or

against the State that owns the News Agency. These reports, if credible or substantial
enough, can be used in support of or against any Country as such but in that situation,
they can be denied by any other country in the council. Some examples are:
i. RIA Novosti (Russia): http://en.rian.ru/
ii. IRNA (Iran): http://www.irna.ir/ENIndex.htm
iii. BBC (United Kingdom): http://www.bbc.co.uk/
iv. Xinhua News Agency and CCTV (P.R. China): http://cctvnews.cntv.cn/

2. Government Reports: These reports can be used in a similar way as the reports
of State Operated News Agencies and can, in all circumstances, be denied by another
country.
a. Government Websites like the State Department of the United States of
America (http://www.state.gov/index.htm) or the Ministry of Defence of the Russian
Federation (http://www.eng.mil.ru/en/index.htm)
b. Ministry of Foreign Affairs of various nations like India
(http://www.mea.gov.in/), People’s Republic of China
(http://www.fmprc.gov.cn/eng/), France (http://www.diplomatie.gouv.fr/en/),
Russian Federation (http://www.mid.ru/brp_4.nsf/main_eng)
c. Permanent Representatives to the United Nations Reports
(http://www.un.org/en/members/; Click on any country to get the website of the
Office of its Permanent Representative)
d. Multilateral Organizations like the NATO
(http://www.nato.int/cps/en/natolive/index.htm), ASEAN
(http://www.aseansec.org/), OPEC (http://www.opec.org/opec_web/en/), etc.
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3. UN Reports: All UN Reports are considered as credible information or evidence

for the Executive Board of the Security Council.
a. UN Bodies: Like the SC (http://www.un.org/Docs/sc/), GA
(http://www.un.org/en/ga/), HRC
(http://www.ohchr.org/EN/HRBodies/HRC/Pages/HRCIndex.aspx), etc.
b. UN Affiliated bodies like the International Atomic Energy Agency
(http://www.iaea.org/), World Bank (http://www.worldbank.org/), International
Monetary Fund (http://www.imf.org/external/index.htm), International Committee
of the Red Cross (http://www.icrc.org/eng/index.jsp), etc.
c. Treaty Based Bodies like the Antarctic Treaty System
(http://www.ats.aq/e/ats.htm), the International Criminal Court
(http://www.icccpi.int/Menus/ICC), etc.
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4.0 Committee Description1

The United Nations Fourth Committee of the UN General Assembly (also known
as the Special Political and Decolonization Committee) is one of six committees
of the United Nations (which consists of all UN members). After the dismantling
of the trusteeship system resulting from independence being granted to all
the trust territories, and the limited number of non-self-governing territories
now, that jurisdiction is insufficient to keep the committee occupied.
Consequently, it was merged with the Special Political Committee (which had
been created as a seventh committee of the whole to deal with certain political
issues after the General Assembly found that the First Committee (Disarmament
and International Security) was too busy. The Fourth Committee deals with
decolonization, Palestinian refugees and human rights, peacekeeping, mine
action, outer space, public information, atomic radiation and the University for
Peace.

With extensive political reshaping of the world, more than 80 former colonies,
comprising about 750 million people, have gained independence since the
creation of the United Nations. At present, 17 Non-Self-Governing
Territories (NSGTs), home to nearly 2 million people, across the globe remain to
be decolonized. Thus, the process of decolonization is not complete. Completing
the job will require a continuing dialogue among the administering Powers,
the Special Committee on Decolonization, and the people of these territories, in
accordance with the relevant UN resolutions on decolonization.

In 1990, the General Assembly proclaimed the first International Decade for the
Eradication of Colonialism, including a specific plan of action. December 2010
marked the fiftieth anniversary of the Declaration, coinciding with the end of
the Second International Decade and the proclamation of a Third one.
The Committee of 24 (Special Committee on Decolonization) and its Bureau are
assisted by the Decolonization Unit of the Department of Political Affairs for
substantive support and by the Department for General Assembly and
1
http://www.un.org/en/ga/fourth/
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Conference Management for secretariat services. The Department of Public

Information carries out a number of outreach activities on decolonization,
including the maintenance of their website.2

2 http://www.un.org/en/decolonization/
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5.0 Introduction to Small Island Developing States

Small Island Developing States (SIDS) are a recognized group of 58 low-lying

island nations across 3 geographical divisions–Caribbean, Pacific, and Atlantic,
Indian Ocean, Mediterranean, and South China Sea (AIMS), a list of the states,
territories and areas in each division can be seen in Table 1. Although SIDS are
geographically dispersed, they face similar social, developmental, and
environmental challenges. But nevertheless, economic and health statistics can
vary widely across SIDS. SIDS face a unique combination of challenges due to
their small size, geographical remoteness, and fragile environment and also
have less resilience to natural disasters such as cyclones and earthquakes.
Climate change poses both economic and existential threats to SIDS. Particularly
at risk from rising sea levels are the Maldives, Tuvalu, Marshall Islands and
Kiribati, where over 95% of land is below five metres above sea level. This may
result in population displacement and migration, bringing with it political, social,
and health issues. Due to the contained nature of SIDS, the potential impact of
infectious disease outbreaks on the population is severe. While numerous SIDS
have universities and medical schools, a brain drain of health professionals away
from these states exists. Furthermore, smaller states, territories, or areas may
not be able to produce the diverse variety of medical staff at the level required
and rely on other countries for training specialists.

Population

The 58 SIDS are inhabited by a combined population of 69,853,190, which

represents less than one percent of global population. While population size
ranges from 11,389,562 in Cuba to 1,610 in Niue. SIDS are, in general, rather
small in terms of population size.
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The average proportion of the population aged less than 15 years (27.43%) is
slightly above the global figure (26.11%) but varies widely among SIDS, with
Comoros, Guinea-Bissau, São Tomé and Principe, and Timor-Leste above 40%.

The proportion of the population aged more than 65 years is lower than the
current global average of 8.3%, which could be expected for a group containing
many developing countries, which generally have younger populations. Average
annual population growth is lower in SIDS than globally, but varies within the
SIDS sub-classifications. Population growth is substantially higher in the AIMS
group as compared to the Caribbean and Pacific states, with the US Virgin Islands
and Puerto Rico experiencing consistent negative growth between 2000 and
2015. Furthermore, average population growth between 2010 and 2015 was
negative in American Samoa, Bermuda, and Niue. The current trends of low and
negative population growth in many SIDS will accelerate population ageing
within the next few decades.

Economics

The average Gross Domestic Product (GDP) per capita in 2015 in SIDS is US
$12,612, increasing to US $15,444 when least developed countries are excluded.
An outlier in this category is Singapore, with its GDP per capita being over US
$30,000, much higher than the next highest state, the Bahamas, at US $22 817,
reflecting Singapore’s development into an international centre of commerce
and finance. Of the 30 countries globally which have a GDP per capita of under
US $1,000, 3 of these are SIDS (Guinea-Bissau, Comoros, and Haiti).

In some cases, favourable GDP per capita statistics mask on-going resource
depletion, particularly of fresh water sources, which are under increasing threat
due to urbanisation, changing land use, and tourism. Many SIDS are reliant on
industries such as tourism, agriculture, fishing, and mining for income, and are
therefore vulnerable to fluctuations in market prices and tourist numbers. Due
to the smaller and shallower land mass present on small islands, resource
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depletion through mining can occur. The economy of the island of Nauru was
previously almost entirely reliant on phosphate mining, however resources have
been virtually exhausted, with over 80% of the island’s surface strip-mined and
now infertile.

The total expenditure on health as a percentage of GDP varies widely, with SIDS
countries, territories and areas representing the lowest expenditure globally
(Timor-Leste, 1.48%) and the second highest expenditure, fractionally lower
than the United States (Marshall Islands, 17.14%). The mean expenditure of
6.94%, is lower than the global average (9.94%) and between the figures for
middle income countries and high-income countries (5.82% and 12.27%
respectively)

Of the 35 SIDS for which there is 2015 Human Development Index data, the
majority are categorised as having high human development, with the block
having an overall average of 0.6866.

In terms of literacy, the average adult literacy rate for males (90.85%) and
females (88.31%) is above global average, particularly for females. There exists
is a double figure discrepancy between the genders in favour of males in two
countries: Guinea-Bissau (23.5%, data from 1999) and the Solomon Islands
(14.7%, data from 1999). Of the 32 countries where data was available, there
was a higher rate of adult female literacy in 13 countries, with Jamaica
representing the country with the greatest difference of 9.13%.3 4

3 http://unohrlls.org/custom-content/uploads/2013/09/Small-Island-Developing-States-Factsheet-
2013-.pdf
4 http://www.imf.org/external/pubs/ft/fandd/2013/09/Jahan.htm
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6.0 Vulnerabilities Faced by SIDS5

The United Nations currently classifies 52 countries and territories as Small

Island Developing States (SIDS). More than 50 million people live in these
countries. 43 of these countries are located in the Caribbean and the Pacific
regions. SIDS is a diverse group in a number respects. It includes countries that
are relatively rich by developing country standards, such as Singapore and
Bahamas, but also some of the poorest countries in the world, including
Comoros and Timor-Leste. All SIDS are vulnerable to economic shocks and
natural hazards to a degree that few other countries or regions are. This is
generally not compensated for by sufficient state or household resilience.
Relative to GDP they receive the highest levels of foreign aid of all developing
countries, remittances from abroad are a very important source of income and
some depend very heavily on export revenues. The quality of governance varies
tremendously among SIDS and many are prone to state failure. These and other
factors combine to make SIDS highly vulnerable to external economic shocks and
especially susceptible to natural disasters, including tsunamis and climate
change. It follows that achieving and sustaining development in SIDS is a
complex and is a demanding task. Among its prerequisites is an understanding
of the roles played by aid, trade, remittances, and governance.

Sharing a common vulnerability to external shocks

The vulnerability of SIDS to economic shocks and natural hazards is reflected in

the volatility of their GDP growth. SIDS located in the Pacific region record the
lowest average and by far the most volatile GDP growth. Pacific SIDS growth
rates range from 2.0 to 9.1 percent and the volatility, as measured by the
coefficient of variation is more than twice that of all developing countries and
the SIDS group as a whole. Volatility in GDP growth rates is also particularly high
in SIDS located in Africa and the Caribbean.

5http://onlinelibrary.wiley.com/doi/10.1002/2014EF000278/pdf
http://unohrlls.org/custom-content/uploads/2013/08/SIDS-Small-Islands-Bigger-Stakes.pdf
http://apps.who.int/iris/bitstream/10665/255804/1/WHO-CCU-17.08-eng.pdf
https://carleton.ca/cifp/wp-content/uploads/1020.pdf
https://www.cepal.org/publicaciones/xml/8/8118/G0588.html
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SIDS rely heavily on trade to drive growth, resulting in the volatility of their
growth. Work carried out for the WIDER project, for instance, shows that in the
Caribbean the top five export commodities form between 70 percent and 96
percent of the regions' exports. This creates economic vulnerability to changes
in export demand and commodity prices. Trade flows, expressed as the sum of
commodity exports and imports relative to GDP, are far higher in SIDS than in all
other Developing countries (DCs) and the Least Developed Country (LDCs)
group. Commodity exports and imports as a percentage of GDP in any one year
were no less than 95 and as high as 141 percent, and averaged 110 percent over
the period 1980 to 2007. The equivalent numbers for all developing countries
were 64, 94 and 78 percent, respectively.

More pertinent is volatility in trade, given it is an implication of external shocks.

Indeed, SIDS trade is more volatile than for other developing countries. The
coefficient of variation for SIDS trade relative to GDP for the period 1980 to 2007
is 10.23, compared to 7.56 and 8.80 for DCs and LDCs respectively.

In addition to export dependency, external vulnerability is accentuated by the

fact that for most households in SIDS, remittances from abroad is a very
important source of income. While this creates a vulnerability towards global
downturns, when remittances decline (such as during the recent Global
Financial Crisis), it also acts as a buffer in the case of local hazard—it is often
found that remittances to SIDS increase in the wake of a natural disaster.

The need to strengthen resilience

Natural hazards and external economic shocks can be prevented from resulting
in disasters by building and strengthening the resilience of households and
states in SIDS. Education, health and infrastructure contribute significantly to
household resilience. However, in providing these, many SIDS fall short, and
often require substantial foreign aid. Overall, SIDS receive the highest levels of
foreign aid of all developing countries relative to their GDP—over the period
1980 to 2006 amounting on average to 16 percent of GDPs, compared to only
one percent on average for all other developing countries.

There is however, considerable variation within the SIDS group in terms of aid,
remittance and FDI flows. SIDS in the Pacific receive very large amounts of aid
 15

and remittances and low amounts of FDI relative to GDP. Aid and remittances to
these countries are indeed far higher, at the equivalent of 23 and 11 percent of
GDP, respectively. African SIDS receive higher levels of FDI relative to GDP, at 19
percent, higher than the other groups of SIDS. The Caribbean SIDS depend less
on aid, remittances and FDI, with these flows being no higher than the
equivalent of six percent of GDP.

Resilience is often constrained by the fact that the quality of governance varies
tremendously among SIDS and many are prone to state failure—SIDS are over-
represented in the fragile state category countries. This is made worse by
evidence that fragile and failing states are less able to absorb aid effectively.

Vulnerability of SIDS

The higher level of vulnerability of SIDS can be traced back to the interaction of
the following socio-economic and natural characteristics:

• Environmental/ecological vulnerability, particularly high exposure to

natural hazards

• Limited land resources and difficulties in waste disposal management

• Geographic remoteness and isolation

• Limited diversification and very open economies

• Weak institutional capacity and high costs of basic infrastructure

• Special social vulnerabilities

Some of these vulnerabilities are enhanced by the current context of

globalisation and erosion of trade preferences. The issues involved are dealt
with in Section III below.
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Environmental/ecological vulnerability, particularly high exposure to natural

hazards

Perhaps the most fundamental aspect of the environmental/ecological

vulnerability of SIDS relates to their very geographical location. In the case of
Caribbean SIDS, these are located in the "hurricane belt" and the almost
annual recurrence of these phenomena has profound implications for all
aspects of the sustainable development of these entities. The Caribbean is also
the site of considerable volcanic activity. These phenomena, especially
hurricanes, have increased in frequency and intensity in recent years (Table 1).

Year of Name of Island(s) affected

hurricane Hurricanes/Storms

1992 Andrew Bahamas

1994 Debby St. Lucia

1995 Luis & Marilyn Anguilla, Antigua/Barbuda,

St. Kitts/Nevis, Dominica,
Montserrat

1996 Bertha British Virgin Islands

1998 Georges Antigua and Barbuda, St. Kitts and

Nevis

1998 Mitch Belize (flooding)

1998 Floyd Bahamas

1999 José Antigua and Barbuda

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1999 Lenny Entire north-eastern Caribbean

Sources: CDERA: Report on the Economic Impact of the Recent Disasters in the Eastern
Caribbean, 1998. ECLAC/CDCC: Selected Statistical Indicators of Caribbean Countries Doc.
LC/CAR/G.535 Vol. X 1997.

The small size of the population and economy of most Caribbean States means
that whenever a disaster strikes it affects a large proportion of the economy and
people, and development of the countries is set back by several years. For
example, the 210 miles per hour winds of Hurricane Luis which struck Antigua
and Barbuda in 1995 have been estimated to have caused over EC$ 810 million
in damages and had resulted in the closing of all hotels (Table 2). This amounted
to 71 percent of the island's GDP. This was particularly severe as 83 percent of
GDP is derived from tourism. Anguilla also suffered damages, which were
estimated to be 147 percent of its GDP. In addition to the loss of income and
employment that such disasters cause, scarce resources have to be diverted to
the repair of infrastructure, such as roads, power, and water supplies, away from
social essentials, such as health and education which are also frequently
damaged during these storms.

Table 2: Cost of damage to the five countries most seriously affected by

Hurricanes Luis and Marilyn in 1995, in relation to GDP (in millions of EC$)

Country Year Storm GDP for preceding Damage/GDP

Damages year

Anguilla 1995 245 166.4 147.0%

Antigua/Barbuda 1995 810 1 143.9 71.0%

Montserrat 1995 8.0 147.3 5.4%

Dominica 1995 262 494.1 53.0%

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St. Kitts/Nevis 1995 532 505.6 105.2%

St. Martin 1995 1,764 NA

Sources: CDERA: Report on the Economic Impact of the Recent Disasters in the Eastern
Caribbean, 1998. ECLAC/CDCC: Selected Statistical Indicators of Caribbean Countries Doc.
LC/CAR/G.535 Vol. X 1997.

In addition to hurricanes, other natural hazards that are prevalent in the region
include volcanoes, earthquakes, mudslides and floods. Global environmental
developments pose additional challenges to the small, low-lying states of the
Caribbean. It has been suggested that as a consequence of global warming, sea
level may rise by one meter over the next 100 years (IPCC). This could lead to
significant losses of land area, in addition to likely damage to coral reefs
surrounding many of the islands (leading to reduced protection from the forces
of the sea, changes in aquatic ecosystems, including important fish resources
and biodiversity) as well as adverse changes to the fragile eco-systems of most
of the islands.

Also, in the case of the Caribbean, as is the case of other SIDS regions, the
number of straits used for international navigation and the heavy maritime
traffic that transits the Caribbean Sea, bearing in mind the presence of the
Panama Canal as a major transit hub, translate into very high levels of pollution
from oil tankers and the threat of such activity from an even more devastating
source, namely, the regular movement of nuclear and other hazardous materials
across the Caribbean Sea. The existence of these risks imposes great demands
on the planning capacity of the Small Island Developing States of the Caribbean
region, because of the need to incorporate adequate risk assessments,
prevention and mitigation measures into all aspects of sustainable development
planning. It also requires the capacity to develop or otherwise acquire, then to
apply, a valid and relevant methodology for the evaluation of the impact of the
disasters that regularly visit their territories. Finally, it requires the ability to
effectively mobilize wider international opinion in support of efforts to protect
the integrity of the Caribbean Sea which defines the region and its character,
and on which tourism, fishing, and other productive as well as recreational
pursuits are based.
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Limited land resources and difficulties in waste disposal management

The basic configuration of Small Island Developing States dictates an extremely

close relationship between most aspects of environmental management and the
planning and utilisation of land resources. This latter element is also very closely
related to the issue of coastal zone management. In addition, in these States,
population pressures intensify the urgency of resolving the competing claims on
the use for which the necessarily limited land area is to. Fundamentally, it is the
small size of these entities, linked to other factors, such as land tenure systems
and soil types, which are recognized to limit the area available for human
settlement, agriculture, tourism, and other aspects which intensify land-use
conflicts. SIDS are also vulnerable to a number of long-term constraints to their
sustainable development, in particular, the degradation of their limited area.
Such degradation might reflect the effects of population pressure, deforestation
and natural disasters, among others. The net effects of the degradation process
include a reduction in the fertility of land and, consequently, the productivity of
soils, deterioration of water quality, and the siltation of rivers, lagoons and even
coral reefs. Attempts at increasing agricultural output invariably result in the
pollution of soils, freshwater, and coastal resources.

The small size of these islands also dictates that land uses compete for a
resource which is inherently scarce. In most of the islands the rugged
topography also drastically reduces the amount of land available for
development to narrow coastal strips which must accommodate industry,
tourism, residential and other land uses.

Since the 1960s, with the advent of international travel to these islands, tourism
has exerted and continues to exert profound influence not only on employment
and foreign exchange earnings, but also on the land use and land ownership in
the islands. Much of the hotel plants, particularly the largest properties
occupying hundreds of acres located on prime coastal beaches, are owned by
international investors. Over time a sizeable amount of the already limited land
resource in these islands will be owned by foreigners. Adding to this is the fact
that over time, increasing numbers of tourists who have visited these islands
have returned and purchased land on which they have built luxurious
properties. The cumulative impact of these transactions is significant and
 20

increasingly problematic in the long term, precisely because of the small size of
these islands.

When land leaves the local market it is traded on the foreign market usually in
United States currency at much higher prices than it was purchased for. The
resulting increase in land value exerts immediate impact on the price of land in
surrounding areas driving up prices beyond the reach of locals, and creating
artificial shortages of land for locals for housing and other essential services.

In the past, this trend towards increasing land ownership by non-nationals has
created serious social problems. In a number of islands, in cases where, for
example, popular tourist sites have been thus acquired, a number of popular
beaches were no longer as readily accessible to the local residents. Social
tensions as a result of this dynamic are evident.

As the governments of these SIDS find themselves under increasing

international pressure to dismantle their aliens' land holding legislation in the
context of trade liberalization, this aspect can be expected to present a major
challenge to the management of their vulnerability in social, economic,
environmental and other dimensions.

In these states, a number of factors also conspire to make waste management a

critical issue. Chief among these is the very limited land areas and other
resources for safe disposal of waste, population pressures and the ever
increasing importation of pollutants and other hazardous substances. Pollution
from both terrestrial, as well as marine, sources constitutes a very closely
related combination from the management point of view. Recourse to landfills
is not feasible as a long-term option. Nor is incineration, given its high financial
cost in addition to its impact as a source of pollution.

Overlapping with both its geo-economic as well as its social counterpart,

reference should also be made to high population density, which increases the
pressure on already limited resources; the overuse of resources and, thus,
premature depletion; the relatively small watersheds and the consequent threat
to supplies of fresh water. It is also recognized that SIDS tend to have high
degrees of endemism and levels of biodiversity. On the other hand, the relatively
small numbers of the various species impose high risks of extinction and create
a need for protection. The fragile marine eco-systems of SIDS are also
recognized to be among the most threatened, so that such staple economic
pursuits, as fishing and tourism, need to be carried out in the context of sound
 21

integrated management programmes. Such programmes are for the most part
beyond the human resource, financial and institutional capacity of SIDS.

Geographic remoteness and isolation

Physical distance to the major centres of trade and commerce, and isolation
make it difficult for Caribbean States to overcome the disadvantages of limited
size and small domestic markets by turning to world trade. While this is not a
big problem for the larger islands in the region, and given their proximity to the
United States and South American mainland, it still presents a challenge for the
smaller States like Dominica, Grenada, and Saint Vincent and the Grenadines.
Distance and low volumes of imports and exports mean that transportation
costs tend to be high. For SIDS, it is not only the actual distance that poses a
problem, but also the fact that it is likely that there are only a few, monopolistic,
transportation providers. These costs reduce competitiveness and, therefore,
export revenues. Higher import prices mean reduction in consumer welfare.

Limited diversification and high degree of openness of these Economies

Caribbean exports tend to be highly concentrated on a narrow range of products

and markets. One of the consequences of the limited diversification of the small
economies is that when it is combined with their openness (exports and imports
account for a large share of domestic economic activity), and their susceptibility
to natural disasters, they tend to experience a higher income volatility than
larger states. Figure 1 shows that 12 countries with populations of under
500,000—a characteristic of most countries in the Caribbean—had the highest
variability of income over the period 1976-1997, followed by 19 countries with
populations ranging from just over half a million to 1.5 million.
 22

Special social vulnerabilities

In the social vulnerability profile of SIDS, as captured in the SIDS POA, reference
is made to, inter alia, the occurrence of population growth rates that exceed
economic growth rates and the implications this has on the provision of basic
welfare services, particularly for the women who are heads of households. In
addition, the small populations, which in absolute terms are quite small,
preclude the exploitation of economies of scale in many areas and, also, the
widespread use of highly skilled labour. The small sizes of national populations
also imply, as noted, costly public administration and infrastructure and limited
institutional capacities. Moreover, the generally high levels of emigration,
especially of young and highly skilled personnel, produce another constraint on
sustainable development, namely, the need to import high-cost foreign
expertise to, in large measure, replace this significant outflow of human capital.

In addition to the aforementioned are those concerns related to, inter alia,
increasing poverty, HIV/AIDS with its depletion of the labour force and the
diversion of resources from otherwise productive pursuits, increasing crime, and
the drug problem, which present major constraints to the pursuit of sustainable
development by SIDS.

With respect to "social vulnerability", particular attention needs to be drawn to

the use of the SIDS of the Caribbean, as transit points in international drug trade.
Their long coastlines and extended maritime spaces falling under national
jurisdiction are beyond the surveillance capacity of these small and ill-equipped
States, and interdiction in this vital area implies yet another form of dependence
on external sources. In the SIDS of the Caribbean, governments and civil
societies are fully aware of the nefarious effects of the drug trade in, fuelling
demand for illegal drugs and in dramatically increasing the level of crime
associated with drug dealers in the respective countries.

Moreover, the associated crime of money laundering and related activities

severely undermines the financial as well as the judicial system, legislatures and,
in effect, the entire apparatus of governance. These socially, as well as
economically, debilitating phenomena account for a type of social vulnerability
that threatens the entire system of governance. This is also a type of
vulnerability that threatens the very moorings of the cultures of these countries,
extending even to the integrity of these states. Relating this situation to
developments in the economic sphere, concern has been voiced that the erosion
of trade preferences, traditionally enjoyed by these countries, will provide the
 23

greatest incentive for the unemployed, among other social groups, to decant
into the production and trafficking of illegal drugs and other anti-social activities.
Such a development could only serve to increase the social fragility of these
states thereby accentuating all other aspects of their overall social vulnerability.

Another important expression of "social vulnerability" might be identified in

reference to those societies in which fundamental divisions exist on the basis of,
inter alia, highly skewed income distribution or, ethnic or religious affiliation.
The existence of such divisions would negate the possibility of generating
national consensus on basic issues of national importance and thus obstruct all
potential avenues to sustainable development. When these situations give rise
to widespread or prolonged social disturbances or to other dysfunctional
phenomena, these can be expected to translate into lost productivity, lost
infrastructure and fundamentally, lost opportunities to advance the pursuit of
sustainable development.

With respect to the foregoing, it is to be noted that many of the areas of

vulnerability identified in the context of Caribbean SIDS are also recognised to
be relevant, to varying degrees, to all developing countries. However, in the
particular context of SIDS, it is their combined effect in the overall vulnerability
scenario of these entities that renders them as significant expressions of
vulnerability.

Measures of vulnerability

There are a number of different measures. The Commonwealth Secretariat has

developed a vulnerability index that ranks developing countries according to
measurable components of exposure and resilience to external shocks.

The construction of the index is based on the observation that income volatility
is the most apparent manifestation of vulnerability and starts by identifying
sources of this volatility. The three most important determinants of income
volatility identified by the Commonwealth Secretariat are:

• The lack of diversification (as measured by the United Nations Conference

on Trade and Development (UNCTAD) diversification index);

• The extent of export dependence (as indicated by the share of exports in

GDP);
 24

• The impact of natural disasters (as reflected by the portion of the

population affected).

These underlying sources of volatility are then combined to form a composite

index of the impact of vulnerability on developing countries. The resulting index
is then weighted by average GDP as a proxy for resilience, the second
component of the Commonwealth vulnerability index.
 25

6.0 International Perspective6

The unique characteristics and vulnerabilities that SIDS face were first addressed
by the international community at the Earth Summit (United Nations (UN)
Conference on Environment and Development) in Brazil in 1992. The SIDS case
was the focus of Agenda 21, a non-binding, voluntarily implemented plan of
action of the Summit, committed to addressing the problems of sustainable
development of SIDS. This plan involved adopting methods to enable SIDS to
function and cope effectively with environmental change, and to mitigate the
impacts and reduce the threats posed to their marine and coastal resources.
Following Agenda 21, the Barbados Programme of Action was introduced in
1994, in an effort to provide further aid and support to SIDS. Its ultimate aim
was to improve sustainable development. It highlighted the challenges of
converting Agenda 21 into precise strategies, movements, and procedures at
the national, regional, and international level and listed fifteen priority areas for
specific action. Five areas were further selected by the UN General Assembly in
1999, recognising their urgency. These five were: climate change, as the rising
sea level could render some low-lying SIDS submerged; natural and
environmental disasters and climate variability, with an emphasis of improving
disaster preparedness and recovery; freshwater resources, preventing water
shortages as demand increases; coastal and marine resources, promoting the
protection of coastal ecosystems and coral reefs; energy, developing solar and
renewable energy in order to lessen dependence on imported oil; and finally
tourism, focusing on the management of the growth of the tourism industry and
the protection of the environment and cultural integrity.

The 2005 Mauritius Strategy of Implementation further complemented the

BPOA. It gave recognition to the challenges that are unique to SIDS, and
proposed further action towards their sustainable development. The MSI
emphasised the location of SIDS in the most vulnerable regions of the world with
respect to natural and environmental disasters and their rapidly increasing
impact. It made call for a global early warning system covering threats such as
tsunamis, storm surges and cyclones, and stressed that some major adverse
effects of climate change are already being observed. Further, the MSI
recognised the importance of international trade for building resilience and

6 https://sustainabledevelopment.un.org/topics/sids/publications
 26

sustainable development in SIDS, and established the necessity for international

institutions, including financial ones, to pay more specific attention to the
structural drawbacks of SIDS. The MSI went further on matters of trade, stating
that “most Small Island Developing States, as a result of their smallness,
persistent structural disadvantages and vulnerabilities, face specific difficulties
in integrating into the global economy”.

More recently, in September 2014, the Small Island Developing States

Accelerated Modalities of Action, also known as the SAMOA Pathway, was
adopted. As in the case of the previous adoptions, the strategy recognises the
need to support and invest in SIDS so that they can achieve sustainable
development. Distinguishing the SAMOA Pathway slightly from the BPOA and
the MSI is the idea of investing in the education and training of the people of
SIDS. The aim of this idea was to create “resilient societies and economies, with
full and productive employment, social protection and decent work for all”, and
to provide “full and equal access to quality education at all levels”, the latter
which is a vital ingredient for achieving sustainable development. The
promotion of education for sustainable development is especially crucial for
SIDS that are under direct threat from climate change, as it will “empower
communities to make informed decisions for sustainable living rooted in both
science and traditional knowledge”. Finally, the SAMOA Pathway supports
efforts “to promote and preserve cultural diversity and intercultural dialogue,
which provide a mechanism for social cohesion and, thus, are essential in
building blocks for addressing the challenges of social development”.

Many SIDS have recognised the need to embrace sustainability through their
own internal processes, however, without external aid from the international
community, the required change will not come quickly enough. Following on the
adoption of the SAMOA Pathway, 2015 is rapidly becoming a watershed year for
global processes of importance to SIDS. Convergence is occurring across a broad
spectrum of activities as this year has seen the international community
deliberate on the Post 2015 framework for disaster risk reduction which
culminated in the adoption of the Sendai Framework, new expected agreements
in the post 2015 development agenda with Sustainable Development Goals
replacing the Millennium Development Goals. New agreements are also
expected on how development is financed and there remains expectation of a
new international agreement on climate change. Given their far-reaching
impact, these developments are critical, particularly when viewed from the
 27

perspective of the Small Island Developing States. Notwithstanding the global

consensus, serious challenges remain for SIDS and for the foreseeable future;
they will remain a special case for sustainable development. However, with a
global consensus and an avid commitment to the advancement of sustainable
development in these countries, positive change is most certainly on the
horizon.

Can SIDS overcome their size-related vulnerabilities and grow faster and
more consistently?

For every large country like China, India, and the United States, there is a small
state like Suriname, Tuvalu, and Seychelles. Big states are a diverse lot and so
are states with populations of less than 1.5 million.

Some are rich. Some are poor. In fact, small states span the spectrum of income
levels (see table). There are high-income fuel-exporting countries, such as
Bahrain. There are also countries in the low-income group, such as Djibouti.
Similarly, social indicators reflect a wide range of development. Some small
states, such as Luxembourg, rank among the highest in the latest United Nations
Human Development Index, while others, such as Bhutan, rank among the
lowest.

Most of the small states are islands or widely dispersed multi-island states;
others are landlocked. Some are located far from major markets. The smallest
of these, known as micro-states, have populations below 200,000. About one-
fifth of the IMF’s member countries are small states.

Small they may be. But the middle-income and lower-income small states we
analyse here face complex problems. The Pacific Island of Tuvalu, for example,
with a land area of 10 square miles, is roughly one-seventh the size of
Washington, D.C. That makes it difficult to grow crops. Its neighbour, Kiribati, in
contrast, has a population of 100,000 people spread over 3.5 million square
kilometres of ocean—an area about the size of the Indian subcontinent. That
makes for a country extraordinarily difficult to administer.
 28

Most Pacific island countries consist of hundreds of small islands scattered over
an area in the Pacific Ocean that occupies 15 percent of the globe’s surface. This
dispersion causes many problems, not the least of which is high trade costs. For
example, the Pacific states of Samoa and Palau are about as far apart as the east
coast of the United States and England.
 29

A Common Problem

Small states have one common problem: they face constraints because of their size.
For starters, because they have tiny populations, the states cannot spread the fixed
costs of government or business over a large number of people—that is, they cannot
achieve economies of scale in the same way that larger states can. The result of
these diseconomies of scale, as economists call them, is high costs in both the public
and private sectors.
Their small size also seems to be reflected in a number of macroeconomic
characteristics:

•Narrow production base: Although their economies are not uniform—some are
commodity exporters, others are service based (mainly tourism or financial
services)—all of them face problems establishing a competitive economic base. And
where they do compete, it is typically in one or two goods or services, leaving them
vulnerable to ups and downs in a handful of industries. Tourism accounts for more
than half the foreign earnings for many of the Caribbean islands. Similarly, many
small states in the Pacific depend on one product for most of their export earnings.
In the Solomon Islands, for example, about half of export earnings come from
logging.

•Big government: Measured by the ratio of government expenditures to GDP, small

states tend to have bigger governments than do larger states. This is partly a
reflection of the diseconomies of scale that make the provision of public goods and
services more costly than in larger states. In addition, a large share of expenditures
is relatively inflexible—such as those directed to all-too-common natural disasters—
or hard to reduce, such as the public wage bill. The high level of expenditure has
often led to high levels of debt.

•Poorly developed financial sector: About half of the small states have gained
prominence as offshore financial centres. But financial institutions in offshore
financial centres typically serve non-residents. In general, the domestic financial
sectors lack depth, are concentrated, and do not provide their citizens with
adequate access to finance. The financial sectors are dominated by banks, whose
high lending rates often hinder investment. Also, because the private sectors in
small states are so tiny, commercial banks often end up financing the government—
risking their soundness by becoming heavily exposed to one borrower. This has also
complicated economic policy actions meant to lower the debt. In the highly
 30

indebted Caribbean countries, for example, commercial banks and nonbank

financial institutions hold two-thirds of domestic public debt. In bigger countries,
government debt is usually owned by a variety of individuals and by financial and
nonfinancial institutions.

•Fixed exchange rates: Small states are more likely than larger ones to peg their
exchange rates to another currency. Many of these small states are closely tied to a
handful of larger economies that account for most of their export earnings. The peg
eliminates exchange rate volatility, which helps smooth export earnings. At the
same time, small states need to hold higher reserves than their larger brethren—
not only to defend their currencies but also to insulate themselves from adverse
outside events that can have a large negative effect on their well-being. Yet, most
have fewer reserves than considered optimal. Small states also have more limited
ability to conduct monetary policy. Five of 13 small states in the Asia-Pacific region,
for example, do not have a central bank.

•Trade openness: Small states are also more open to trade. Trade-to-GDP ratios are
much larger in smaller economies than in larger ones with similar policies. Small
states also seem to have somewhat lower trade barriers. A high degree of trade
openness often leaves the small states vulnerable to shocks from terms of trade (the
prices of exports compared with the prices of imports).

Small states face other common issues as well. Many are located in the open ocean,
which makes them prone to natural disasters (such as earthquakes and hurricanes),
and, because they are so small, typically the entire population and economy are
affected by such disasters.

Natural disasters annually cost micro-states in the Caribbean and the Pacific the
equivalent of 3 to 5 percent of GDP. At the same time, many are islands that face
particular challenges from climate change. Kiribati, for example, could be the first
country to see its entire territory disappear under water as a result of global climate
change that causes ice to melt at the polar caps, raising sea levels.
Moreover, the remoteness of many of these countries can be a problem because
the paucity of arable land makes them dependent on imported foodstuffs, which
can be very expensive.
 31

Volatility reigns

For the most part, small states have not

shared in the improved economic growth
of their larger peers since the late 1990s
(see Chart 3). Large states have grown
substantially faster in the 2000s than
they did in the last two decades of the
20th century, outperforming smaller
states. There are many reasons that
explain why small states lag behind their
larger peers—among them, a “brain
drain,” as the best and brightest seek wider opportunities available in larger
economies. The erosion of trade preferences in the exports of goods such as
bananas and sugar also holds back small states.

But perhaps the most telling problem these states face is volatility. Small states
have been plagued by highly erratic economic growth, which in the long run
impedes growth, worsens income inequality, and increases poverty. During the
2000s, small states have had noticeably higher growth volatility than their larger
counterparts—and lower growth rates. Their current accounts—mainly the
difference between what these small states export and what they import—are
considerably more volatile than those of larger states with similar income levels.
This may reflect higher terms-of-trade volatility, which has a greater effect on
small states because of their greater trade openness. In the fiscal sector, greater
volatility is seen in both revenue and expenditures. Revenue volatility is typically
linked to greater reliance on trade taxes, which wax and wane as trade rises and
falls. Expenditure volatility is often associated with “lumpy” capital spending,
spending in response to natural disasters, and a lack of discipline related to weak
governing capacity.
 32

Making the best of it

Small states can, however, compensate for their size-related problems by taking
steps to exploit their advantages and offset their disadvantages. In general,
these states should pursue the following:

•Sound economic policies: The best cure for volatility is prevention—through

strong policies. For example, revenue volatility can be lessened by reducing
dependence on trade taxes. Small states have begun to look at other sources of
revenue, and many have successfully adopted value-added taxes. Their
introduction in the micro-states of the Caribbean has reshaped the revenue
structure and eased revenue collection. Expenditure volatility can sometimes be
reduced through public sector reforms that seek to improve governance and
make fundamental structural reforms in the economy.

Volatility in the external sector can be reduced by diversifying exports and

trading partners. Although a tiny state, Samoa has successfully diversified its
export products and markets—after taro leaf blight in the 1990s showed the
importance of reducing dependence on one crop.

In addition to reducing volatility, small states must foster stability. Steps to

increase financial services should be paired with careful supervision by the
appropriate legal and supervisory authorities to ensure financial stability. Given
their greater exposure to external shocks, small states should accumulate
adequate reserves or budget extra spending for potential disasters as well as
explore insurance coverage.

•Regional integration and cooperation: One way to offset the size disadvantage
is to create bigger markets through regional integration. Such initiatives are
most advanced in the Caribbean. For example, the Eastern Caribbean Currency
Union’s Regional Government Securities Market aims to integrate existing
national securities markets into a single regional market, helping to exploit
economies of scale in financial markets. Similarly, the Eastern Caribbean Central
 33

Bank uses a reserve account of contingency funds to assist member countries

facing economic difficulties, including those caused by natural disasters.

•Involvement of the international community: Small states can also involve

international institutions and development partners in identifying common
solutions to regional problems. The World Bank, for example, has helped set up
a multi-country risk pool and an insurance instrument for damages caused by
natural disasters.

Similarly, the World Trade Organization’s Aid for Trade initiative has encouraged
trade-related regional infrastructure. Internationally agreed debt-restructuring
and debt-relief mechanisms, such as the Heavily Indebted Poor Countries
Initiative and the Multilateral Debt Relief Initiative, have helped some small
states reduce their debt burden. Financial assistance is often crucial for small
states. To weather natural disasters and other external shocks, small states have
used a number of IMF financing instruments, including the Rapid Credit Facility,
a type of emergency assistance. Importantly, international institutions can
provide technical assistance and training tailored to the needs of individual
states.

Policies matter most

Size does create constraints, but effective policies can help small states overcome
them. For example, Mauritius—a small, remote island state off the coast of eastern
Africa—was deemed a strong candidate for failure by Nobel Prize-winning
economist James Meade in the 1960s. It depended on one crop, sugar; was prone
to terms-of-trade shocks; had high levels of unemployment; and lacked natural
resources. But the country proved Meade wrong. It progressed to a well-diversified
middle-income economy that earns revenues from tourism, finance, textiles, and
advanced technology—as well as sugar. Whether measured by per capita income,
human development indicators, or governance indicators, Mauritius is among the
top African countries. The prudent policies Mauritius adopted fuelled its
 34

transformation. For example, it attracted foreign direct investment to help spur its
industries and built strong institutions to support growth.
 35

7.0 Conclusion

Given the limited number of SIDS common to datasets, any conclusions arising
from such a comparative analysis must be treated with caution. Keeping that
caveat in mind, two potential insights emerge from the results. The first is that,
consistent with the premise posited at the beginning of this chapter, Small Island
Developing States appear to face specific challenges unlike those encountered
by larger and more diverse states. Further, it seems that SIDS’ vulnerabilities are
likely to manifest themselves in ways other than the emergence of large-scale
violent conflict. As a result, SIDS would likely benefit from policy prescriptions
specifically tailored to their particular circumstances, with special attention paid
to the areas of economic and political vulnerability encountered by small,
remote, and underdeveloped populations. The second, and in many ways the
more surprising potential implication is that there appears to be a need to
examine the interrelationship between the literature on the Economic
Vulnerability Index further to operationalize their index, and the literature on
state fragility and conflict that informs the CIFP risk index. This gap becomes
particularly apparent in the two indices’ analysis of SIDS.
The fact that the Economic Vulnerability Index produces results virtually
independent of, or in the case of SIDS, even contrary to those of CIFP suggests
that the perceived causes of economic instability differ markedly from those of
conflict and state fragility. While the results may be at least partially because of
outliers in the limited data set, the evidence is certainly strong enough to
warrant further research. If the disconnect is confirmed in subsequent studies,
the implications for both theory and policy will be profound. In terms of theory,
the results suggest that current models of economic development and state
fragility take insufficient account of one another. An economic model that
proves unable to respond to the inherent political weakness and social tensions
within a state, or even worse, one that inadvertently hastens a state’s decline
into fragility and failure must be regarded as undesirable, regardless of its
positive effects on macroeconomic fundamentals and economic growth.
Similarly, models of state fragility must incorporate sufficient considerations of
sustained long term economic development, given its tremendous importance
 36

to long-term peace and stability. While distinct, the two phenomena are
inextricably linked, and cannot be considered in complete isolation from one
another.

Similarly, on a practical level, such findings suggest that policymakers have much
to gain by considering economic vulnerability and state fragility in tandem.
Towards that end, indicator based analytical methodologies of the sort created
by CIFP may provide effective analytical tools in the policy toolbox.

By combining baseline structural data with information on stakeholders and

recent events, such methodologies provide a comprehensive assessment
framework capable of forming policy decisions in highly complex, dynamic, and
fragile state environments. Such indices enable a thorough consideration of the
consequences of policy decisions, allowing policymakers to examine the non-
economic ramifications of structural economic adjustments, the economic
consequences of political developments, and the potential for both political and
economic policy changes to enhance or undermine personal and communal
security within a developing state. Above all, the results signal the need for
continuing research into the relationship between economic vulnerability and
state fragility.

Several avenues of inquiry immediately suggest themselves. First, the

relationship between economic vulnerability and state fragility remains
imperfectly understood; efforts to clarify the ways in which each affects the
other are sorely needed. While statistical analysis may provide some additional
insight, the research must also include detailed case study analysis in order to
uncover the precise causal linkages that drive the relationship. Potential
candidates for case study analysis include states that have recently undergone
economic structural adjustment at the behest of the World Bank or IMF and
experienced some degree of civil conflict or state failure either concomitantly or
subsequent to that adjustment. Examples include Papua New Guinea, Mexico in
 37

the late 1980s and 1990s, Indonesia in the wake of the 1997 Asian financial crisis,
and a number of sub-Saharan African countries such as Angola and Cote d’Ivoire.
Finally, there is clearly a need for more structural data on SIDS.

Unfortunately, given the small size and unconventional political status of many
Small Island Developing States (some of which continue to defer some elements of
sovereignty to former colonial powers such as the U.K. and France, or to dominant
powers such as the U.S.), there is a dearth of reliable information on which to build
an analysis of either the fragility or the economic vulnerability of such states. So long
as this situation endures, both theoretical analysis and policy decisions regarding
SIDS will remain under-informed, and therefore problematic.