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Development Account Projects

Supporting small island developing States in their efforts to build economic resilience

Background:

Many small island developing States (SIDS), while facing risks of severe economic and natural shocks, heavily rely on sources of income (such as aid, remittances, rental income) that are not based on domestic productive capacities, therefore not structural in nature and potentially volatile. Building economic resilience to create stable development conditions and increase chances of structural progress is one of the most challenging development objectives of these countries. In September 2010, UN member States, in the High-level Review of the Implementation of the Mauritius Strategy for the Further Implementation of the Programme of Action for the Sustainable Development of Small Island Developing States (Mauritius + 5), called for coordinated action to "more effectively address the unique and particular vulnerabilities and development needs" of SIDS (GA resolution 65/2, para. 33). ECOSOC echoed this call in similar terms in December 2011 (ECOSOC resolution 2011/44).

Achieving structural transformation to better take advantage of globalization forces is an important avenue for resilience-building in most SIDS. This generally implies promoting diversification in new, viable activities with a view to reducing exposure to potential shocks. The need for continued efforts to build economic resilience is particularly important to those SIDS that recently graduated, or will be graduating from Least Developed Country (LDC) status, thereby facing the risk of losing specific benefits.

The outcome document of the 2010 High-level Review Meeting calls for assistance to SIDS in building their supply-side capacities and competitiveness. At the same time, the Doha Mandate of UNCTAD (UNCTAD XIII, April 2012) confirms the commitment of UNCTAD to strengthen the economic resilience of SIDS (para. 18j; 56j). This commitment is particularly important in the context of the International Year of Small Island Developing States (2014), which is also the year of the Third International Conference on Small Island Developing States (Samoa, September 2014).

This project aims to strengthen, through technical assistance, the capacity of selected SIDS to durably enhance their economic resilience. Six countries will be selected among 10 SIDS that have requested, or shown interest in, UNCTAD assistance or have begun to receive such assistance and are seeking the benefit of further UNCTAD technical cooperation. Cooperation with the SIDS Unit of the Department of Economic and Social Affairs, and possibly with relevant regional economic commissions (ECLAC, ESCAP), will be an important facet of project implementation. UNCTAD also plans to involve the Organization of Eastern Caribbean States, the Indian Ocean Commission and the Pacific Islands Forum in some project activities.

Objective:

To support six selected SIDS in the Atlantic, the Caribbean, the Indian Ocean and the Pacific in their efforts to increase economic resilience.

Expected accomplishments:

  • A strengthened capacity of relevant SIDS policymakers and government officials to analyse, measure and monitor the various facets of economic vulnerability, and to mainstream resilience-building action at all levels of national development strategies;

  • A strengthened capacity of beneficiaries in the public and private sectors to enhance the competitiveness of existing economic sectors or to make economic diversification possible, particularly in the field of international trade in services;

  • An enhanced capacity of policymakers in selected SIDS (among project beneficiaries) that are faced with the challenge of graduation from LDC status to secure a “smooth transition” to post-LDC treatment, thereby preventing any disrupting loss of LDC benefits.

Implementation status:

In progress.