part ii - overseas development institute (odi)suriname grenada dominican rep. antigua & barbuda...

PART IINatural Hazards, Shocks

and Fragility in

Small Island

Developing States

Amelia U. Santos-PaulinoUNU-WIDER

ODI, London

26 February 2010

Overview of the presentation

1. Fragile States – definition

2. Vulnerability in Small Island Developing States

Profiles and Constrains

Impacts

3. Results

4. Policy Implications

5. Way forward

Amelia U. Santos-Paulino, UNU-WIDER 226 February 2010

States or territories under threat(environmental, economic, physical, social, etc).SIDS, Landlocked, countries emerging from conflict.

Government incapable of providing basic services such aseducation, health, safety and security (DFID).

Low-income country with CPIA (Country Policy andInstitutional Assessment) score of 3 or less, or LICUS (LowIncome Countries Under Stress) (World Bank, OECD).

Threats to the ‘authority, legitimacy and capacity of theState (Canadian International Development Agency, CIDA).

Amelia U. Santos-Paulino, UNU-WIDER 3

1. FRAGILE STATES

26 February 2010

2. VULNERABILITY IN SIDS

26 February 2010 Amelia U. Santos-Paulino, UNU-WIDER 4

Figure 1: Disasters by UN Regions

Windstorms Volcanoes Droughts Earthquakes

Floods Avalanches Others

Source: EM-DAT International Disaster Database, 2010.

2.1 Small Island Developing States: Profiles


Geographically constrained Small geographic size Small population size

Under diversified economic structure Dependent on resource-based and primary commodities Highly specialised (agriculture and tourism) Narrow range of resources Small domestic and regional market Highly dependent on international trade (vulnerable to global trade).

High trade openness: trade flows (i.e. commodity exports andimports relative to GDP) are higher in SIDS than in DCs and LDCs.High volatility in trade related to vulnerability to external shocks.

2.1 Small Island Developing States: Constrains

Vulnerable to natural disasters: Almost 4 millionsCaribbean citizens affected by natural disaster duringperiod 1990-2006.

Ability to bounce back from negative impact of naturalhazards is hampered by geography, populationsize, economic structure.

Volatile macroeconomic performance: high outputgrowth volatility has adverse impacts on long-term growthand on the poor.


Real income


1,663

4,291

4,508

6,393

6,568

6,707

7,109

7,722

7,722

7,843

8,217

12,500

13,307

14,603

17,297

18,380

0 5,000 10,000 15,000 20,000

Haiti

Jamaica

Guyana

Dominica

St. Vincent & Grenadines

St. Lucia

Belize

Caribbean

Suriname

Grenada

Dominican Rep.

Antigua & Barbuda

St. Kitts & Nevis

Trinidad & Tobago

Barbados

Bahamas

Caribbean

1,475

1,970

2,031

2,563

2,894

3,225

6,049

6,170

8,177

0 2,000 4,000 6,000 8,000 10,000

Kiribati

Marshall Islands

Solomon Islands

PNG

Pacific

Vanuatu

Fiji

Samoa

Tonga

Pacific

Figure 2: Real GDP Per capita in SIDS, US$

Source: Chapter 10.

Real Income growth

- 0.5

2.3

5.2

8.0

10.8

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

%

Real GDP Growth in Developing Countries (2000, US$)

LDC DC SIDS


Figure 3: Real GDP growth in Developing Countries (%)

Source: Santos-Paulino, Naudé and McGillivray (2010).

Poverty

Figure 4: Poverty headcount ratio at $2 a day (PPP), (% of population)

0 10 20 30 40 50 60 70 80

Europe and Central Asia

Middle East & North Africa

Latin America & Caribbean

East Asia & Pacific

Haiti

Sub-Saharan Africa

South Asia

Poverty headcount (%)


Source: World Bank WDI (2010).

Poverty

Figure 5: Poverty Rate in Selected Caribbean and Pacific Island Economies (%)


0

10

20

30

40

50

60

70

Source: Chapter 10

Capital Flows

Figure 6: Aid, Remittances and FDI, 1980 to 2006

Amelia U. Santos-Paulino, UNU-WIDER 12

Source: constructed using data in World Bank (2009a)

-

5

10

15

20

25

SIDS LDC Other DC African

SIDS

Pacific

SIDS

Caribbean

SIDS

Pe

rcen

tage o

f G

DP

(pe

rio

d a

ve

rage

)

Aid Remittances FDI

26 February 2010

Source: Santos-Paulino, Naudé and McGillivray (2010).

Natural Disasters

Figure 7: Occurrence of natural disasters in the Caribbean, 1970-2006


0

10

20

30

40

50

Haiti

Dom

inic

an R

ep

Jam

aic

a

Puert

o R

ico

St

Vin

cent

and T

he

Gre

nadin

es

Beliz

e

Trinid

ad a

nd T

obago

Baham

as

Dom

inic

a

St

Lucia

Barb

ados

Guyana

Antigua a

nd

Barb

uda

St

Kitts

and N

evis

Gre

nada

Surinam

e

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6Occurrence of Natural disasters, 1970-2006 Occurrence per 10 thousand inhabitants

Source: Chapter 8.

Natural Disasters

Destructive impact of natural disaster in the Caribbean (% of GDP)


Country Time Event Damages (% GDP)

St Lucia 1988 Hurricane Gilbert 365

Grenada 2004 Hurricane Ivan 203

Dominica 1979 Hurricanes David & Fredrick 101

St Kitts and Nevis 1995 Hurricane Luis 85

St Lucia 1980 Hurricane Allen 66

Antigua & Barbuda 1995 Hurricane Luis 61

Guyana 2005 Floods 59

Haiti 2010 Earthquake 15

Source: Chapter 8, and World Bank (2010)

2.2 Impacts

Damage to the natural environment.

Economic: Active hurricane seasonin 2004 caused damage amountingto circa US$ 3.1 billion (e.g. 10 % ofGDP in Jamaica and more than 200% in Grenada).

Social: loss of human life, disruptionon public services, migration andbreak-up of families, increased risksof disease, lack of access to healthand education facilities, worsenedpublic infrastructure.


Repeated setbacks resulting from the destruction of economic and social capital perpetuate the poverty cycle and can act as a catalyst for turning natural hazards into

natural disasters.


Women suffer the most: they represent 70% of the world´s estimated 1.3 billion poor.


3. RESULTS

Vulnerability operates through trade: more diversifiedeconomies are more able to offset greater importexpenditure in the aftermath of a disaster through higherexport receipts. SIDS with relatively more specializedexport structure are more vulnerable to disasters.

The case of Singapore (the highest income SIDS) showsthat an island economy can successfully stabilize bothemployment and price levels by adopting innovativemacroeconomic policy mixes.

Poverty exacerbated by hazards and natural disasters.


Gender inequalities’ repercussions for the welfare ofsociety: women most vulnerable.

Women disadvantaged in access to resources and a goodstandard of living.

Remittances constituted the largest share of the poor’ssupplemental income (87 % in Jamaica). Women receivethe greater portion of the remittances.


4. POLICY IMPLICATIONS Reducing vulnerability to hazards through mitigation and

adaptation is critical, and should be a key component ofeconomic policy in SIDS.

Macroeconomic policies can play stabilization and growth-promoting roles in highly-open small economies. But thisrequires appropriate institutional frameworks to regulatethe labour market, mobilization of savings, movements ofshort-term capital and the government´s fiscal behavior.

Given high aid-dependency, aid delivery and managementshould be improved.


Implications for governance, poverty, etc., of catastrophicevents (e.g. Haiti’s recent earthquake) show the poorinstitutional framework of SIDS to respond toenvironmental, economic and social vulnerability.


5. WAY FORWARD

SIDS could be better off by pooling regional capacity andresources: furthering intra-regional flows ofgoods, services, capital and labour.

Strengthen institutions – absorptive capacity .

Diversification of production and trade.

Implementation of risk reduction policies that consider gender disparities and other vulnerable groups.


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