COMMONWEALTH SECRETARIAT’S TECHNICAL
WORKING GROUP WORKSHOP
ON
RESILIENCE BUILDING IN SMALL STATES
Malta, 18-19 June, 2013
Organised by the
COMMONWEALTH SECRETARIAT
REPORT
The participants and resource persons at the workshop. Back row: Professor Andrew Downes, Mr
Wonderful Khonje, Mr J P Fabri, Mr Cletus Springer, Ms Anna DeGaetano, Dr Henry Ivarature, Professor
TK Jayaraman, Dr Desmond Amosa, Dr David Smith, Mr Asrani Gopaul, Ms Janet Strachan. Front Row:
Professor Opha Pauline Dube, Hon. Bikenibeu Paeniu, Professor Lino Briguglio, Dr Denny Lewis-Bynoe.
Missing: Dr Godfrey St. Bernard.
TABLE OF CONTENTS
1.
INTRODUCTION ........................................................................................................................ 3
1.1
1.2
1.3
2.
Project Purpose ......................................................................................................................................... 3
Organisers, Venue and Date ...................................................................................................................... 4
Programme of the Workshop .................................................................................................................... 4
OVERVIEW OF THE RESILIENCE FRAMEWORK............................................................ 5
2.1
The Meaning of Resilience ....................................................................................................................... 5
2.1.1
2.1.2
2.1.3
2.1.4
2.1.5
2.2
2.3
2.4
2.5
Macroeconomic stability ................................................................................................................................. 5
Market efficiency ............................................................................................................................................. 6
Social development ......................................................................................................................................... 6
Good governance ............................................................................................................................................ 6
Good environmental management................................................................................................................... 7
The Resilience Index ................................................................................................................................. 7
The Vulnerability-Resilience Framework ................................................................................................. 7
Scoring the Vulnerability/Resilience Nexus ............................................................................................. 9
Main Weaknesses of the Vulnerability/Resilience Framework .............................................................. 10
2.5.1 Financial regulation ..................................................................................................................................... 10
2.5.2 Environmental Management ......................................................................................................................... 10
2.5.3 Other possible variables that could be considered........................................................................................ 10
2.6
3.
ECONOMIC ASPECTS OF RESILIENCE – REGIONAL PERSPECTIVES .................... 11
3.1
3.2
3.3
3.4
4.
Governance/Institutional Aspects of Resilience in the Caribbean Region .............................................. 16
Governance/Institutional Aspects of Resilience in the Pacific Region ................................................... 17
Governance/Institutional Aspects of Resilience in the AIMS Small States ............................................ 18
Discussion on Governance/Institutional Aspects of Resilience .............................................................. 18
ENVIRONMENT AND RESILIENCE – REGIONAL INSIGHTS ...................................... 19
6.1
6.2
6.3
6.4
7.
Social Aspects of Resilience in the Caribbean Region ........................................................................... 14
Social Aspects of Resilience in the Pacific Region ................................................................................. 15
Social Aspects of Resilience in the AIMS Small States .......................................................................... 15
Discussion on the Social Aspects of Resilience ...................................................................................... 16
GOVERNANCE/INSTITUTIONAL ASPECTS – REGIONAL INSIGHTS ....................... 16
5.1
5.2
5.3
5.4
6.
Economic Aspects of Resilience in the Caribbean Region ..................................................................... 11
Economic Aspects of Resilience in the Pacific Region........................................................................... 12
Economic Aspects of Resilience in the AIMS Small States ................................................................... 12
Discussion on Economic Aspects of Resilience ...................................................................................... 14
SOCIAL ASPECTS OF RESILIENCE – REGIONAL INSIGHTS ...................................... 14
4.1
4.2
4.3
4.4
5.
Discussion on the Vulnerability/Resilience Framework ......................................................................... 11
Environmental Aspects of Resilience in the Caribbean Region .............................................................. 19
Environmental Aspects of Resilience in the Pacific Region ................................................................... 20
Environmental Aspects of Resilience in the AIMS Small States ............................................................ 20
Discussion on Environmental Aspects of Resilience .............................................................................. 21
METHODOLOGY OF CONSTRUCTING COMPOSITE INDICES .................................. 21
7.1
The Presentation ...................................................................................................................................... 21
7.1.1
7.1.2
7.1.3
7.1.4
7.1.5
7.1.6
7.2
Choosing the components ............................................................................................................................. 21
Rescaling the observations ............................................................................................................................ 22
Weighting Procedures ................................................................................................................................... 22
Imputation of Missing Data........................................................................................................................... 22
Desirable and Undesirable Criteria.............................................................................................................. 22
Strengths and Weaknesses of Composite Indices .......................................................................................... 23
Discussion on Methodology and Data issues .......................................................................................... 24
8. THE WAY FORWARD/CONCLUDING SESSION............................................................... 24
APPENDIX 1: AGENDA OF THE TECHNICAL WORKSHOP .................................................. 26
2
1. INTRODUCTION
1.1 Project Purpose
Small states face a unique set of development challenges posed by their small size and
commensurate narrow production and export bases as well as susceptibility to climate change
impacts. These characteristics shape their sustainable development concerns which focus on
reducing their vulnerabilities and building resilience to adverse economic shocks and natural
disasters and extreme weather events.
Indeed, the vulnerability of small developing states has long been recognised by the
international community. A 1992 UN Conference on Environment and Development (the Rio
Earth Summit), Agenda 21 notes that Small Island Developing States (SIDS) face special
challenges in planning for sustainable development and agreed a Global Conference on the
Sustainable Development of Small Island Developing States which took place in 1994. The
Barbados Programme of Action (BPOA) which emerged from that process has become the
principal international framework for addressing the special challenges and constraints faced
by SIDS in their implementation of sustainable development.
With over half its‟ member countries being small developing states, the Commonwealth
secretariat has sought to provide an effective platform for the political consideration of their
concerns, as well as a target programme of research and advocacy on sustainable development
concern and capacity development. Over the last three decades, the institution has made
considerable progress in advancing the international awareness of the vulnerability of these
countries, culminating in a steady increase in international awareness of their sustainable
development concerns.
Notwithstanding these efforts, the pace of development in small states has been below
international averages. Stymied by frequent and prolonged economic and weather related
shocks, small states have been challenged to accelerate economic growth in support of
improving their development outcomes. The limited ability of these economies to withstand
or bounce back from harmful external economic shocks was especially evident during the
2008-2010 global economic recession. Most small states experienced a period of strong and
prolonged economic downturn that extended well beyond the end of the recession and
significantly eroded economic and social gains. While a key blockage has been a lack of
financial resources, capacity deficits also compromise their ability to respond effectively to
these shocks, which often adversely alter their growth trajectory.
The recent global economic uncertainties have exacerbated their challenges at a time of
decreasing international support for small states. Small states continue to be disconnected
from the most salient debates in international development, partly due to their capacity
constraints. The Commonwealth secretariat, recognising the need for a strategic approach to
addressing the impact of persistent shocks on the sustainable development, began working
with the University of Malta in 2004 (and the preparatory process for the Mauritius
International Meeting) to build a robust resilience framework. The resilience index sought to
measure the effects of shock absorption or shock counteraction policies that are in place in a
country based on: macro-economic stability; micro-economic market efficiency; good
political governance; and social development. The resilience building assessment tool was
intended to help national stakeholders to agree priority areas for policy intervention. The
3
framework developed by Briguglio et al (2006; 2009)1 was used to conduct
vulnerability/resilience profiling on the ground in three small island states, namely Seychelles,
St Lucia and Vanuatu. The framework proposed by Briguglio et al (2006; 2009) did not take
into account weak financial regulatory regimes and environmental management in the
resilience index.
Building on this previous work and as envisaged in the new strategic plan the Secretariat has
embarked on a programme to examine the national policy framework and the international
financing and capacity agenda in support of resilience building for Commonwealth small
member states. This is timely in the lead up to Global Conference on the Sustainable
Development of Small Island Developing States (SIDS) planned for 2014. In support of the
Secretariat‟s efforts to build resilience in its small member states, a Technical Working Group
(TWG) was convened. Members of the group (see Annex 1) were invited to revisit the
Commonwealth Secretariat/University of Malta resilience framework as well as the wider
body of knowledge on resilience with a view to determining what further work was needed to
improve the framework. A multidisciplinary approach was employed in the selection of the
members of the TWG in recognition of the multifaceted nature of the challenges and required
responses of small states. Experts from the fields of economics, sociology, governance and
environment were invited and agreed to participate. To ensure adequate coverage of the
diverse range of small states issues across regions, these experts were chosen from the three
small states regions (Caribbean, Pacific and AIMS).
1.2 Organisers, Venue and Date
The meeting was organised by the Commonwealth Secretariat through the services of Dr
Denny Lewis-Bynoe, Economic Adviser: Small States in the Economic Affairs Division of
the Secretariat, assisted by Mr Wonderful Khonje, Economic Officer in the same Division.
The meeting was held at the Radisson Blu Hotel, St Julians, Malta on 18-19 June 2013.
1.3 Programme of the Workshop
This multidisciplinary and cross-country approach is evident in the structure of the
discussions over the two-day meeting (See Appendix 1 for the programme of the workshop).
Briefly, the workshop consisted of discussion sessions, focussing on economic, social,
governance and environmental aspects of resilience building with special reference to the
small states in the Caribbean, AIMS,2 and Pacific regions. In addition, there were two sessions
dedicated to the link between resilience and policy action and the way forward in order to
further develop the resilience framework. Documentation relating to the workshop, including
the presentations by participants, is available at: www.Commonwealth.int/.
The programme was introduced by Ms Janet Strachan, Adviser and Head of Small States,
Environment and Economic Management within the Economic Affairs Division of the
Commonwealth Secretariat. In her introductory address, Ms Strachan articulated the
Secretariat‟s long history of engagement on vulnerability and resilience building for its small
1
Briguglio, L., Cordina, G., Farrugia, N. and Vella, S. 2006. “Conceptualising and Measuring Economic
Resilience.” In Briguglio, L., Cordina, G and Kisanga, E. Building the Economic Resilience of Small States:
Commonwealth Secretariat and the Islands and Small States Institute of the University of Malta.
Briguglio, L., Cordina, G., Farrugia, N. and Vella, S. 2009. “Economic Vulnerability and Resilience: Concepts
and Measurements.” Oxford Development Studies, Vol. 373: 229-247.
2
The acronym AIMS stands for Atlantic, Indian Ocean, Mediterranean and South China Sea, the regions where
non-Caribbean and non-Pacific small states are located.
4
states members, which included several initiatives with the University of Malta and others
spanning over two decades. She reiterated the Secretariat commitment to advancing this work
over the next four years of its strategic planning period and to supporting the international
dialogue on resilience building for Small Island Developing States (SIDS) and other small
states.
2. OVERVIEW OF THE RESILIENCE FRAMEWORK
The first discussion session, chaired by Ms Janet Strachan, consisted of a presentation by Lino
Briguglio on resilience building followed by discussion.
2.1 The Meaning of Resilience
Briguglio et al. (2009) 3 defined resilience as the country‟s ability to cope with external
shocks and the term can be used in two senses, respectively relating to the ability of an
economy to (a) recover quickly from harmful external economic shocks and (b) withstand the
effect of such shocks.
The ability of an economy to recover from the effects of adverse shocks is associated with the
flexibility of an economy, enabling it to recover after being adversely affected by the shock.
This ability will be severely limited if, for example, there is a chronic tendency for large fiscal
deficits. On the other hand, this ability will be enhanced when policy tools can be utilised to
counteract the effects of negative shocks, such as in a situation of a strong fiscal position,
which would mean that policy-makers can utilise discretionary expenditure or tax cuts to
contrast the effects of negative shocks. This type of resilience is therefore associated with
„shock-counteraction‟.
Briguglio et al (2006; 2009) hypothesised that the economic resilience building policies can
require:
1. Macroeconomic stability;
2. Market efficiency;
3. Social development and social cohesion;
4. Good political governance;
5. Good environmental management.
2.1.1 Macroeconomic stability
In the context of economic resilience, macroeconomic stability relates to the interaction
between an economy‟s aggregate demand and aggregate supply. If aggregate expenditure in
an economy moves in equilibrium with aggregate supply, the economy would be
characterised by internal balance, as manifested in a sustainable fiscal position, low price
inflation and an unemployment rate close to the natural rate, as well as by external balance, as
reflected in the international current account position or by the level of external debt. These
can be considered to be variables that are highly influenced by economic policy. The data for
this variables is available from the IMF World Economic Outlook.4 Briguglio et al (2009)
proposed that the macroeconomic stability component of resilience can be measured by three
variables, namely: (i) the fiscal deficit-to-GDP ratio; (ii) the sum of the unemployment and
inflation rates; and (iii) the external debt-to-GDP ratio. The variables are available for a
reasonably wide set of countries spread over a spectrum of stages of development, size and
3
Briguglio, L., Cordina, G., Farrugia, N. and Vella, S. 2009. “Economic Vulnerability and Resilience: Concepts
and Measurements.” Oxford Development Studies, Vol. 373: 229-247.
4
A recent version is available at: http://www.imf.org/external/pubs/ft/weo/2013/01/ .
5
geographical characteristics.
2.1.2 Market efficiency
If markets adjust rapidly to achieve equilibrium following an external shock, the risk of being
negatively affected by such a shock will be lower than if market disequilibria persist. Indeed,
with very slow or non-existent market adjustment, resources will not be efficiently allocated
in the economy, resulting in welfare costs, manifested, for instance, in unemployed resources
and waste or shortages in the goods markets. These considerations have important
implications for shock-absorbing resilience.
Not many indicators of market efficiency are available which span a sufficiently wide range
of countries, as required for the purpose of this study. Following a search for suitable
indicators, Briguglio et al. decided to use a component of the Economic Freedom of the
World Index entitled „regulation of credit, labour and business‟5 which is aimed at measuring
the extent to which markets operate freely, competitively and efficiently across countries.
The index is designed to identify the effect of regulatory restraints and bureaucratic
procedures on competition and the operation of markets.
2.1.3 Social development
Briguglio et al (2006; 2009) argued that social development is an essential component of
economic resilience. This factor indicates the extent to which relations within a society are
properly developed, enabling an effective functioning of the economic apparatus without the
hindrance of civil unrest. Social development can also indicate the extent to which effective
social dialogue takes place in an economy which, in turn, would enable collaborative
approaches towards the undertaking of corrective measures in the face of adverse shocks.
Social development in a country can be measured in a number of ways. Variables relating to
income, such as its dispersion and the proportion of the population living in poverty, and the
proportion of the population with low levels of education, could be useful indicators. Still
another possible approach would be to measure the number and extent of instances of
industrial or civil unrest. These approaches are interesting, but rather narrow in scope and
very difficult to measure across countries. Briguglio et al (2006; 2009) propose that the social
development component of economic resilience can be measured by education and health
indicators utilised to construct the UNDP Human Development Index (HDI).6
2.1.4 Good governance
Good governance is essential for an economic system to function properly and hence to be
resilient. Governance relates to issues such as rule of law and property rights. Without
mechanisms of this kind in place, it may be relatively easy for adverse shocks to result in
economic and social chaos and unrest. Hence the effects of vulnerability to external shocks
would be exacerbated. There are various indicators of political governance including the
World Bank Kaufman Index7 and the “Legal Structure and Security of Property Rights”
5
Economic Freedom of the World 2010 Annual Report, available at:
http://www.freetheworld.com/2010/reports/world/EFW2010_BOOK.pdf.
6
The 2011 version of the HDI is available at:
http://hdr.undp.org/en/mediacentre/humandevelopmentreportpresskits/2011report/.
7
Kaufmann, D., Kraay, A. and Mastruzzi, M. 2010. "The Worldwide Governance Indicators : A Summary of
Methodology, Data and Analytical Issues." World Bank Policy Research.
6
component of the Economic Freedom of the World Index.8
2.1.5 Good environmental management
It would be useful to consider the effects of environmental management on economic
resilience building. The environment can be an important source of vulnerability as it is
associated with shocks of an adverse nature, principally by hazards, such as earthquakes,
floods and sea-level rise. Management of such hazards (such as early warning systems,
education, adaption schemes) would be conducive to resilience building. In this regard, the
Yale University Environmental Performance Index would be useful for the resilience index,
but data on small states is generally absent in this index.
2.2 The Resilience Index
Professor Briguglio explained that the indicators just described can be used to construct a
resilience index. Briguglio et al (2009), using this approach, 9 found that countries with an
advanced economy, notably the United States and Canada, Western Europe, Japan, Australia
and New Zealand, registered high resilience scores. These countries have well-developed
institutional economic, social and political structures and where market forces predominate in
resource allocation. There was a high degree of correlation between GDP per capita and
resilience scores of countries.
Of interest is that a number of small states, characterised by inherent high economic
vulnerability, registered high resilience scores – a finding that the authors used to explain
why small states can be economically successful in spite of (and not because of) their high
exposure to economic shocks.
2.3 The Vulnerability-Resilience Framework
By juxtaposing economic vulnerability and economic resilience, Briguglio et al (2009)
identified four possible scenarios into which countries may be placed according to their
vulnerability and resilience characteristics. These four scenarios are respectively termed best
case, worst case, self-made and prodigal son.
The best-case category applies to countries that are not inherently vulnerable and which, at the
same time, adopt resilience-building policies. The worst-case category refers to countries that
compound the adverse effects of inherent high vulnerability by adopting policies that run
counter to economic resilience – and therefore exacerbate economic vulnerability. Countries
classified as self-made are those with a high degree of inherent economic vulnerability, but
which build up their economic resilience through the adoption of appropriate policies that
enable them to cope with or withstand the effects of their inherent vulnerability. Countries
falling within the prodigal son category are those with a relatively low degree of inherent
economic vulnerability but whose policies are deleterious to economic resilience, thereby
exposing them to the adverse effects of shocks. These four scenarios are depicted in Figure 2,
where the vertical axis measures inherent economic vulnerability and the horizontal axis
measures nurtured resilience.
8
Economic Freedom of the World 2010 Annual Report, available at:
http://www.freetheworld.com/2010/reports/world/EFW2010_BOOK.pdf.
9
Briguglio et al (2009) constructed such an index for 86 countries. The environmental governance component of
the index was not included due to lack of data. In addition, there is the possibility that incorporating an
environmental management index could lead to the problem of redundancy that is, using indicators that are
highly correlated that would add no new information but would render the procedure unnecessarily complex.
7
According to Briguglio et al (2009), this method of defining vulnerability in terms of inherent
features and resilience in terms of policy-induced changes has a number of advantages. First,
the vulnerability index would refer to permanent (or quasi-permanent) features over which a
country can exercise practically no control and therefore cannot be attributed to inadequate
policies. In other words, countries scoring highly on the index cannot be accused of inflicting
vulnerability on themselves through misguided policy approaches. Second, the resilience
index would refer to what a country can do to mitigate or exacerbate its inherent vulnerability.
Third, the combination of the two indices would indicate the overall risk of being harmed by
external shocks due to inherent vulnerability features counterbalanced to different extents by
policy measures.
Given that vulnerability refers to inherent characteristics that render countries prone to
exogenous shocks, vulnerability scores for a particular country should not differ much over
time, and therefore it is not expected that a country will move vertically along the quadrants
of Figure 1; but horizontal movement is possible for those countries that adopt measures that
build resilience and vice versa. It would thus be possible for countries to switch between the
worst-case and the self-made scenarios, or the prodigal son and the best-case scenarios,
through changes in their economic policies.
By distinguishing between inherent economic vulnerability and nurtured economic resilience,
it is possible to create a methodological framework for assessing the risk of being harmed by
external shocks, as shown in Figure 1.
Figure 1: The Risk of a Country being harmed by External Shocks
Figure 1 shows that risk has two elements, the first is associated with the inherent conditions
of the country that is exposed to external shocks and the second associated with policy
measures developed to absorb, cope with or bounce back from adverse shocks. The risk of
being adversely affected by external shocks is therefore the combination of the two elements.
The negative sign in front of the resilience element indicates that the risk is reduced as
resilience builds up
8
Briguglio et al (2004)10 used this methodological framework to explain what he called the
„Singapore paradox. This refers to the seeming contradiction that a country can be highly
exposed to exogenous shocks, rendering it economically vulnerable and yet still manages to
attain high levels of GDP per capita. The paradox can be explained in terms of the
juxtaposition of economic vulnerability and economic resilience. In this approach, economic
vulnerability is ascribed to inherent conditions affecting a country‟s exposure to exogenous
shocks, while economic resilience is associated with actions undertaken by policymakers and
private economic agents which enable a country to withstand or recover from the negative
effects of shocks. Actions which enable a country to better benefit from positive shocks are
also considered to be conducive to economic resilience.
2.4 Scoring the Vulnerability/Resilience Nexus
Briguglio et al (2009) use the scores of the vulnerability index produced by Briguglio and
Galea (2003)11 and the resilience index produced by Briguglio et al. (2009) to categorise
countries into four groups as follows:
Vulnerability
Score
High
Low
High
Low
Resilience
Score
High
High
Low
Low
Category
Self-made
Best case
Worst case
Prodigal son
Which countries?
Includes small island states
Mainly large advanced countries
Some small island developing states
Mainly large developing states
This scheme is shown graphically in Figure 2.
Figure 2: The Vulnerability/Resilience Nexus
By and large:
(a) countries with scores falling in the best-case quadrant are mostly the large “developed
countries” which are not highly vulnerable and are relatively well-governed;
(b) countries with scores falling in the self-made quadrant include a number of small states
with high vulnerability scores and good economic governance;
10
Briguglio, L. (2004). “Economic Vulnerability and Resilience: Concepts and Measurements”. In Briguglio, L.
and Kisanga, E. J. (Eds), In: Economic Vulnerability and Resilience of Small States. Malta: Islands and Small
States Institute and London: Commonwealth Secretariat: 43-53.
11
Briguglio, L., and W. Galea (2003). „Updating the Economic Vulnerability Index‟. Occasional Chapters on
Islands and Small States, 2003-04. Malta: Islands and Small States Institute, University of Malta.
9
(c) countries in the prodigal-son quadrant include mostly large developing countries with
weak economic governance; and
(d) Countries in the worst-case quadrant include a few vulnerable small states which are high
economically vulnerable, with weak economic governance.
2.5 Main Weaknesses of the Vulnerability/Resilience Framework
2.5.1 Financial regulation
One shortcoming of the Briguglio et al (2009) index was that it did not adequately capture the
lack of resilience occurring from weak financial regulatory frameworks. Seth and Ragab
(2012)12, reviewing the frameworks proposed by different authors, concluded that the
vulnerability-resilience frameworks developed so far do not adequately meet the dangers of
the increasing frequency and severity of financial and economic shocks. The authors argue
that post-2008 developments have raised important questions about the systemic character of
financial and economic shocks and the ability of individual countries to withstand the most
damaging and lasting effects of such uncertainty. Briguglio and Piccinino (2012) 13 propose a
revision of the framework so as to, amongst other things, identify the different types of
financial and economic shocks that most frequently face developing countries and advocate
global policies and international coordination mechanisms to minimise the frequency and
severity of shocks themselves. Briguglio and Piccinino (2012) recognizing this weakness,
incorporated an index entitled “soundness of banks”14 in the resilience index that they
developed for East Asian countries. The soundness of banks index was developed by the
World Economic Forum as part of the Global Competitiveness Index.15
2.5.2 Environmental Management
Environmental management that is conducive to the development of renewable energy,
energy efficiency and waste management can also reduce the impacts of economic shocks, as
good management improves room for manoeuvre when a country is faced by such shocks.
Environmental management is particularly important for adaptation to climate change
impacts, which could potentially usher in catastrophic situations associated with, among other
things, sea-level rise, health hazards and increased frequency of extreme events.
As argued above, data on environmental matters are however not readily and extensively
available across countries of different sizes and the inclusion of environmental variables for
the present exercise would have drastically reduced the countries covered by the resilience
index.
2.5.3 Other possible variables that could be considered
Professor Briguglio stated that other variables that could be considered for inclusion in the
resilience index could be the current account balance, reflecting instability in the foreign
12
Seth, A. and Ragab, A. (2012). Macroeconomic Vulnerability in Developing Countries: Approaches and issues
Poverty Group, UNDP Bureau for Development Policy, Working Paper number 94.
13
Briguglio, L. and Piccinino, S. (2012) Growth with Resilience in East Asia and the 2008–2009 Global
Recession, Asian Development Review, Vol. 29 (2): 183-206. Available at:
http://www.adb.org/sites/default/files/pub/2012/adr-29-2.pdf .
14
The Soundness of Banks index is formulated from experts‟ responses to the following question: “How would
you assess the soundness of banks in your country?” Scores range from 1 (insolvent and may require a
government bailout) to 7 (generally healthy with sound balance sheets).
15
The most recent report of the Global Competitiveness Index is available at:
http://www.weforum.org/issues/global-competitiveness .
10
sector. The social component could also be strengthened by additional variables reflecting
social cohesion or lack of it. The market efficiency index could be strengthened by the
inclusion of the Ease of doing business index produced by the World Bank. However in
adding additional components care should be taken not to replicate tendencies that are already
captured by other components and that data is available across a sufficiently large number of
countries.
2.6 Discussion on the Vulnerability/Resilience Framework
This opening session was crucial in providing a context to the deliberations of the TWG. In
the discussion which ensued following the presentation, facilitated by Ms Strachan, the TWG
considered:
The need to update the resilience index on a regular basis, given that it is based on
policy choices, which are subject to change;
The need to capture the downsides of an unregulated or badly regulated market,
particularly in the financial sector;
The importance of factoring in environmental management as a component of the
resilience index;
The benefits of linking the resilience index to doable integrated policy frameworks,
which small states could adopt for building or strengthening their resilience.
The TWG agreed to examine these issues in more detail during subsequent sessions.
3. ECONOMIC ASPECTS OF RESILIENCE – REGIONAL PERSPECTIVES
The session on the economic aspects of resilience building consisted of three presentations,
respectively focusing on each of the three regions followed by discussion facilitated by Dr
Denny Lewis-Bynoe.
3.1 Economic Aspects of Resilience in the Caribbean Region
Professor Andrew Downes delivered a presentation on the Caribbean small island states. He
explained that economic performance in these states was generally good, and most of them
have moved out of low development stage into a middle income stage. They however seem to
find it very difficult to move to a higher stage of development. The main contributor to
economic growth in the region is tourism. In general most small states depend highly on
international trade. Unemployment in the region is relatively high, with the government often
acting as an employer of the “first” resort. The informal economy is also relatively high.
Poverty is still prevalent in some of the Caribbean small states, and there is a high degree of
income inequality in the region.
Professor Downes argued that institutions are critical in the economic growth process and in
general, due to the small size of the countries involved, economic institutions in the Caribbean
region are somewhat weak.
Professor Downes referred to a number of indices which include the Caribbean small island
states. He said that in terms of the Human Development Index these states are mostly in the
middle to high levels. Likewise on the Economic Freedom of the World Index, they are
11
generally rank on the upper 50%. The World Competition Index, most of the Caribbean small
island states are in Stage 2 (efficiency driven) with some moving to Stage 3 (innovation
driven). With regard to the World Bank „Doing Business‟ Index the Caribbean also gets
generally high score, with Barbados and Trinidad and Tobago being the leaders in the region.
The major problems facing a number of Caribbean small island states relate to high debt ratios
and high current account deficits.
Professor Downes identified a number of vulnerability challenges facing the Caribbean small
island states, including the removal of preferential trade arrangements, the high oil prices, the
reduction in inflows from tourism and remittances as a result of current global recession. In
addition, natural disasters have major economic effects. In some cases, notably Trinidad &
Tobago and Grenada, social disruption is also a relevant factor.
There have been many policy-induced actions in the region, including economic
diversification, human resources development, economic integration (CARICOM), strategic
economic planning, and promotion of entrepreneurship and strengthening of social protection.
These could all lead to building resilience in the region.
3.2 Economic Aspects of Resilience in the Pacific Region
The second presentation on the economic aspects of resilience on the small island states in the
Pacific region was delivered by Professor T.K. Jayaraman. He said that the global food and
fuel crisis of 2007-08, the financial crisis of 2008 and the “great recession” of 2009 all greatly
affected the pacific region. Generally growth has been slow in recent years in the region, with
the exception of Solomon Islands and Papua New Guinea, which benefited from high
commodity prices.
These countries face major terms of trade shocks due to price of oil and narrow range of
exports. These lead to instability in the economy. There have been also a decline in tourism
and remittances, as well as fluctuations in bilateral aid.
Current account balances have deteriorated in the region. In some countries, including Samoa,
Solomon Islands and Tonga, the debt/GDP ratio is relatively high. China is emerging as a
major creditor in the region, offering “quick” loans.
Professor Jayaraman argued that foreign direct investment (FDI) is much better than debt or
aid and incentives to encourage such investment could be conducive to economic growth.
This requires stable and predictable political and economic governance, as well as promoting
competitiveness and policies that lead to stable exchange rates.
He posited that there are various policy measures that can contribute to the economic
development of small islands states in the Pacific region, amongst which, he identified the
linking of agriculture with tourism, finding niche markets for off-season products, deepening
the integration with New Zealand and Australia, and easier access of bank credit for business.
Professor Jayaraman also suggested that the resilience index as needed to be updated as
frequently as possibly, so as to capture policy changes, and that it should include a wider array
of policy measures than it actually does.
3.3 Economic Aspects of Resilience in the AIMS Small States
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Lino Briguglio and Anna DeGaetano delivered a presentation on the small states of Africa,
the Mediterranean Area and South China Sea, a regional collectively labelled AIMS. They
showed that the small states in this region, which numbered 18,16 are very diverse in terms of
the stage of development, growth, openness, economic structure and political governance. The
authors also presented the results of a resilience index, building on the framework of the
resilience index developed by Briguglio et al. (2009), using updated data, but focusing on
stability and market flexibility.
Briguglio and DeGaetano presented scores for macroeconomic stability for the AIMS small
states, measured in terms of the inflation rate, public debt as a ratio of GDP and current
account balance as a ratio of GDP for the years 2003-2012 taking a ten-year period was to
avoid using data in a particular phase of the trade cycle. The results indicated that Gabon,
Singapore, Namibia, Botswana, Swaziland and Malta were the most stable economies in that
order and Cape Verde, Maldives, Guinea-Bissau, Gambia, Seychelles and Sao Tome &
Principe were the most unstable in that order. The other small states in this region registered
intermediate scores.
The authors further explained that market efficiency is typically seen by mainstream
economists as the best way to allocate resources in the economy, through the price
mechanism. This argument has two caveats. Firstly, the market adjustment argument does not
apply to public goods and externalities, due to market failure. Thus in the case of the
environmental services and assets, direct intervention through command and control or
through economic instruments are likely to be needed, since the market cannot be relied upon.
Secondly, reliance on market forces does not mean the law of the jungle, and market
regulation will be needed to reduce abuse of market dominance, anti-competitive behaviour
such as cartels and reckless financial dealings. The need for regulation has been evident
during the 2008/2009 financial crises.
The authors presented the scores for market efficiency measured by the fifth component of the
Economic Freedom of the World Index (2012), which relates to the workings of the financial,
labour and goods markets. There was missing data for a number of African states Cape Verde,
Comoros, Djibouti, Equatorial Guinea, Gambia, Guinea-Bissau, Maldives, Sao Tome`&
Principe and Swaziland. To fill these gaps the “Ease of Doing Business Index” (World Bank,
2012) was used applying proportional scores.
The results indicated that Singapore, Mauritius, Namibia, Seychelles, Botswana registered the
highest market efficiency scores, in that order while Gambia, Equatorial Guinea, St Tome`
& Principe, Comoros and Djibouti registered the lowest scores in that order. The remaining
small states registered intermediate scores.
The combination of the stability and flexibility scores indicate that Singapore, Gabon,
Namibia, Botswana and Mauritius in that order registered the highest stability and flexibility
scores, while Equatorial Guinea, Comoros, Djibouti, Gambia, and Sao Tomé & Príncipe in
that order, registered the lowest scores, in that order. Lesotho, Malta, Cyprus, Seychelles,
Maldives, Cape Verde and Swaziland obtained intermediate scores.
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Eight of these states are small islands and included in the AOSIS list of small island developing states
(http://aosis.org/members/). Cape Verde, Comoros, Guinea-Bissau, Maldives, Mauritius, Sao Tome and Principe,
Seychelles and Singapore. Two others, namely Malta and Cyprus are not included in the AOSIS list as they
form part of the EU, and are therefore classified as developed countries. The remaining 8 countries, namely
Botswana, Djibouti, Equatorial Guinea, Gabon, Gambia, Lesotho, Namibia and Swaziland are not islands, but
have a small population.
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The authors concluded that those small states with low SFI scores indicates that their
economic governance is relatively weak, rendering them highly at risk of being harmed by
external economic shocks.
3.4 Discussion on Economic Aspects of Resilience
The ensuing discussion highlighted the following areas for further attention:
The importance of accounting for natural hazard in small island economies, where the
damage can have major economic impacts. The widespread nature of the damage and
the resource capacity constraints of small states often prolong the period of recovery;
Those economies with low stability and market efficiency scores signal a clear need
for resilience building policies;
Improving planning, though not easily measureable, is important in framing responses.
The problem is how to account for effective planning in gauging where a country is
likely to fall in the resilience spectrum; and
Capturing the changing resilience arising from the changing mix of policies that
countries undertake. The examples of Iceland and Cyprus was used to illustrate how
conditions in these small states changed in a relatively short period of time. The TWG
recommended the computation of the resilience index as frequently as possible to
capture the changing conditions of small states.
4. SOCIAL ASPECTS OF RESILIENCE – REGIONAL INSIGHTS
Following the previous format, this session had three speakers, respectively focusing on one
of the three regions where small states are located, namely the Caribbean, the Pacific and the
AIMS regions. Following the presentations, there was an open discussion on the subject. The
session was facilitated by Mr Cletus Springer.
4.1 Social Aspects of Resilience in the Caribbean Region
In his presentation, Dr Godfrey St Bernard, explained that social vulnerability arises from
society‟s exposure to the risk of social disintegration due to domestic and international shocks
that lead to sudden or gradual change in the well-being of social systems caused by human
behaviour, anomie and factors such as acculturation and enculturation.
He argued that external forces include economic ones, such as a crash in the financial market,
environmental ones, such as hurricanes, earthquakes and volcanic eruptions, and social, such
as industrial unrest and political instability.
The author argued that social resilience in the face of social vulnerability does not only related
to more favourable characteristics associated with attributes of individuals, households,
communities, nations and regions, but also to more favourable characteristics associated with
institutional entities that are shaped by and impacted by individuals, households,
communities, nations and regions. Thus, in the face of social vulnerability, enhanced social
resilience is critical in softening the adverse impact of sudden shocks and other agents that
precipitate levels of vulnerability characterizing the various units of analysis.
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The author described a number of institutional factors associated with social resilience
building, including structures relating to (a) households and families (b) norms and values (c)
human capital formation and (d) public participation.
As key gaps in social resilience building, the author focused on statistical information in
particular (a) inadequate statistical indicators to track variation in social attributes (b)
inadequate expertise in high-end statistical analysis and the lack of a critical mass of statistical
expertise (c) policy and development analysts who lack expertise in statistical data collection
and analysis deemed critical to promoting the ideals associated with building resilience.
4.2 Social Aspects of Resilience in the Pacific Region
Dr Desmond Amosa, in his presentation, stated that with regard to the Pacific Island Countries
(PICs), there are three main island groupings, namely Melanesia, Micronesia and Polynesia.
Summarising the performance of the PICs with regard to the Millennium Development Goals
(MDGs), Dr Amosa stated that the Melanesian Groups of countries are mostly off track, the
Micronesian countries are offer a mixed picture, whereas the Polynesian countries are
generally on track. He also overviewed the HDI scores of PICs, noting that the highest
ranking countries were Palau, Samoa, Tonga and Fiji whereas the other PICs, in particular
Papua New Guinea and Solomon Islands, had much lower scores, indicating that overall the
HDI picture in the Pacific leaves much to be desired.
He argued that the highest risks with regard to social development in the PICs lie with the
quality of governance in the islands, natural disasters and economic shocks. He explained that
many PICs rank very high when compared to other countries, with regard to economic losses
and people affected by natural hazards. In terms of disasters and vulnerability, out of the 20
most negatively affected countries by natural disasters, 8 are PICs. As major gaps with regard
to social development, the author identified the lack of political commitment in terms of a
sound policy framework and lack of good governance.
Dr Amosa said that fortunately there are a number of policy responses in the national and
regional level. At the national level there are national strategic plans and budgetary forecasts
while at the regional level there is the Pacific plan, the Pacific Islands framework for action
on Climate change, the Pacific Disaster Risk Reduction & Disaster Management and the
Cairns Compact.
As gaps in resilience building, Dr Amosa identified lack of political commitment, and weak
policy framework. There are also deficiencies with regard to the public institutions, arguing
that the main problems in this regard lie in lack of accountability and effectiveness.
He stated that at the community level there are many factors that could be conducive to
resilience building including traditional knowledge, education and fostering of partnerships.
In this regard, NGOs, CSOs, the Media and the church could play a major role.
4.3 Social Aspects of Resilience in the AIMS Small States
Mr Asrani Gopaul focused on the situation in the AIMS small states. Mr Gopaul stressed that
social development depends on the ability of a government to finance the social welfare,
including education, health and social protection. He made the point that the present form of
neoliberalism-led globalization sometimes makes it difficult for governments to support the
social sectors, as when, for example, in order to promote competitiveness, the World Bank
and IMF impose certain conditionalities to reduce subsidization of the social services. This is
most of the times to the detriment of disadvantaged groups and other people at grass root in
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small states. Moreover, this can also prove to be a threat to peace and stability, which are
both important prerequisites for social development.
4.4 Discussion on the Social Aspects of Resilience
TWG members noted:
Social development and social cohesion are important contributors to economic
resilience building;
Evidence suggest that social cohesion in SIDS is generally superior to that found in
many larger countries. In the context of resilience, it is important to adopt policies that
maintain and even strengthen social cohesion and avoid policies that weaken this
attribute of many small states;
The selection of variables conducive to resilience building should be guided whether a
given policy measure renders the country better able to withstand the external shocks
(not of its own making); and
The need to consider not just the education and health aspect of social developments
but also gender issues, ageing population and social protection.
5. GOVERNANCE/INSTITUTIONAL ASPECTS – REGIONAL INSIGHTS
The session again consisted of three presentations, respectively focussing on three regions
where small states are located, namely the Caribbean, the Pacific and the AIMS regions,
followed by discussion. The session was facilitated by Mr Khonje.
5.1 Governance/Institutional Aspects of Resilience in the Caribbean Region
Cletus Springer focused on the need for planning an important dimension of the institutional
framework. He argued that sound planning is absolutely critical for sustainable development
in any country or region, but more so for SIDS, given their inherent economic vulnerabilities,
their high susceptibility to natural hazards, especially extreme weather events. SIDS also face
major constraints with regard to their human, financial, and natural resources, and this again
calls for planning so as to maximize the benefits of such resources.
He explained that in the Caribbean SIDS planning is not sufficiently coordinated and
participatory. In addition there is excessive dominance by the public sector and poorly
structured institutions. Timely statistical information is also lacking. The regional set-ups are,
additionally, not supportive of national planning endeavours.
The planning priorities in the Caribbean should be aimed at promoting human resources
development and competitiveness and to develop the capacity of the people, especially the
poor, to sustain their livelihoods.
Mr Springer argued further that in order to foster resilience, planning in SIDS should take into
account the fact that SIDS are highly prone and exposed to external shocks. Measures to
reduce such exposure include: (a) energy planning to reduce dependence on imported energy
products by increasing energy efficiency and renewable energy content in energy mix; (b)
diversifying exports by inter alia integrating production and marketing arrangements at a
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regional level; (c) pursuing service exports for which comparative/competitive advantage
exists, including tourism; to reduce dependence on strategic imports through substitution
measures where feasible (d) reducing acquired vulnerabilities by ensuring that development
policies and strategies do not exacerbate inherent vulnerabilities through sound macroeconomic management, taking full account of inter-sectoral linkages and dynamics
(Integrated Development Planning). All these should be complemented by the use of
Environmental Impact Assessments and Environmental Health Impact Assessments
(environment planning) as well as poverty reduction schemes to build social cohesion (social
planning).
Mr Springer emphasised the need for integrated planning, where economic aspects should be
considered in connection with social and environmental concerns. He identified areas where
planning could strengthen resilience notably by promoting stability and market efficiency. He
assigned a major role to human resources development in the planning effort.
Mr Springer also referred to regional planning and also international collaboration in this
regard, given that many economic, social and environmental developments do not occur
exclusively within the national borders, and therefore it is important to forge partnerships
through regional and international agreements.
5.2 Governance/Institutional Aspects of Resilience in the Pacific Region
Dr Henry Ivarature gave an overview of the state of governance and democracy in the Pacific
region. Generally democracy is well-established in the region, although there are various
threats. A major problem in the region is that vulnerable democratic institutions are
manipulated to serve the interest of particular individuals, groups and sections of society, with
the “bigman” status adopted by some politicians, particularly in PNG, Solomon Islands and
Vanuatu thwarting the benefits of democratic governance. A worrying feature in Pacific
governance is political instability as in the case of Fiji and Vanuatu. In Fiji there were a
number of military coups and in Vanuatu three Prime Ministers were changed in a period of 6
months. In Nauru the country has experienced several changes of government between 2007
and 2011, some not lasting longer than a year and the shortest in power for a few days.
Between 2007 and 2011, Nauru had four presidents, two of which were elected through a noconfidence motion of which there were three in this period. In Samoa democracy and
democratic institutions are thwarted by selective procedures as to who can be elected and who
can vote.
The speaker also referred to gender issues in governance. A common feature of political
governance in the PICs is that women are very poorly represented in the legislatures. He said
that amongst Forum Island Countries, there are currently only 19 women legislators out of a
total combined size of legislatures of 473 legislators (4 per cent). Kiribati has 4 women
legislators, Papua New Guinea, Niue and Palau has 3 women legislators, Samoa has 2 women
and Cook Islands, Tonga, Republic of the Marshall Islands and Solomon Islands has 1 woman
legislator each. No women legislators in the legislatures of the Federated States of
Micronesia, Nauru, Tuvalu and Vanuatu.
He referred to the World Governance Indicators and argued that there is a mixed picture in the
Pacific region with regard to the six indicators namely. The Worldwide Governance
Indicators consist of six dimensions of governance namely (a) voice and accountability, (b)
political stability and absence of violence, (c) government effectiveness (d) regulatory quality,
(e) rule of law and (f) control of corruption. Some PICs score very poorly on these indices,
(i.e. below the 50% percentile) including:
Papua New Guinea and Tonga with regard to voice and accountability;
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Papua New Guinea and Solomon Islands with regard to political stability;
Papua New Guinea, Palau, Vanuatu, Tonga, Kiribati, Solomon Islands, and Marshall
Islands with regard to government effectiveness;
Fiji, Tuvalu, Tonga, Marshall Islands, Kiribati and Solomon Islands with regard to the
regulatory quality;
Papua New Guinea, Fiji, Marshall Islands and Solomon Islands with regard to rule of law;
Papua New Guinea, Micronesia FS, Marshall Islands, Fiji, with regard to control of
corruption.
Dr Ivarature identified a number of factors that he felt render PICs vulnerable and identified
governance weaknesses as a factor in this regard, arguing that there is a need to address these
weaknesses.
5.3 Governance/Institutional Aspects of Resilience in the AIMS Small States
J.P. Fabri, discussing governance and institutional issues in the SIDS of the AIMS region
namely Cape Verde, Comoros, Cyprus, Guinea Bissau, Maldives, Malta, Mauritius, Sao Tome
& Principe, and Seychelles. He explained that there are wide economic, social and geographic
variations between these SIDS. He considered good political governance identified as one of
the four pillars of economic resilience and used the Worldwide Governance Indicators as a
proxy for measuring such governance.
He referred to the six indicators, already referred to in the previous presentation by Dr
Ivarature. According to these indicators, between 2008 and 2011, Singapore scored high on
the overall governance indicators, with Malta, Cyprus and Mauritius also registering high
scores. Maldives, Sao Tome and Principe, Comoros and Guinea Bissau registered low scores.
Seychelles and Cape Verde intermediate. He showed that although Singapore was the best, in
terms of voice and accountability it scored low.
Referring to the individual indicators, Mr Fabri argued that between 2008 and 2011 there
were deteriorations in some indicators and improvements in others, with worsening
performance with regard to „voice and accountability‟ and „rule of law‟ and marked
improvements in government effectiveness, with mixed performance in the other 3 indicators
(„regulatory quality‟, „political stability‟ and „control of corruption‟) .
Mr Fabri emphasized the point that with regard to the issue of governance, it is important to
identify best practice and that reforms should be sequenced realistically. He said that
leadership is an important requisite in this regard. He suggested that governance frameworks
should be based on 3 main propositions, namely (a) principles and values as a foundation (b)
strengthening partnership through inclusion of civil society and (c) learning to adapt and
assure quality.
In implementing reform, one should start from the local context, creating responsive
institutions through capacity building and fostering a resilient society and supporting inclusive
politics. He argued that government is only one actor in political governance. Civil society
and the private sector also play a part in governance.
Mr Fabri emphasised the need for public sector reform in most of the small island states in the
AIMS region. He stated that in such reform, governance should be built on values,
strengthening partnerships (including civil society involvement) and enhancement of quality
governance.
5.4 Discussion on Governance/Institutional Aspects of Resilience
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The ensuing discussion highlighted the following:
Governance requires predictability and credibility in policy making, and these two
attributes can only be achieved as a result of consistency in decision making;
Policies, laws and governance are interconnected and mutually supportive and small
states with a good policy environment are likely to be well politically governed;
Productivity is an important aspect in governance;
Regulatory quality is a crucial component of governance indicators but difficult to
measure; and
Benefits of regional coordination in governance for small states was underscored as
this would enable sharing of resources, regulatory institutions as well as infrastructural
needs such as telecommunications and transport.
6. ENVIRONMENT AND RESILIENCE – REGIONAL INSIGHTS
6.1 Environmental Aspects of Resilience in the Caribbean Region
In his presentation, Dr David Smith discussed a number of environmental variables relating to
the Caribbean Islands, He identified a number of risks associated with the environment,
include meteorological one (climate change rainfall patterns, cyclone frequency and intensity,
sea level rise, tropical cyclones), geological ones (volcanoes and earthquakes) and
anthropogenic ones (oil spills, nuclear accidents, ship-borne waste).
Dr Smith noted that the damage caused by such events often takes a high proportion of the
islands‟ GDP and he listed a number of factors that decrease resilience. These include:
deforestation; removal of mangroves; conversion of endemic forest into agricultural land; loss
of land cover in watersheds leading to loss of water supply, soil erosion and pollution of
coastal water; increased buildings on the shoreline; overfishing; unsustainable use of natural
resources; and lack of mainstreaming of climate adaptation into physical planning,
infrastructural development and building requirements.
According to Dr Smith, other factors that work again resilience building in the Caribbean
islands related to lack of funds to manage the environment or conserve ecosystem services,
low numbers of technically trained persons leading to low capacity to implement useful
changes, lack of SIDS-specific studies on causes of disaster risk insurance coverage of homes
and business, and lack of diversity in Caribbean economies, with heavy reliance on tourism,
which itself is highly dependent on environmental assets and services. In addition, Dr Smith
argued, the challenges were further compounded by the inadequate regional coordination.
However, there are number of coping initiatives, including a projects aimed at strengthening
environmental management under the auspices of CARICOM (CDEMA, CREDP, CCCCC)
and of the Association of Caribbean States (Caribbean Sea Commission
Declaration of Pétion-Ville, and SHOCS II).
Referring to what needs to be done Dr Smith argued that there is the need to improve regional
governance so as to promote sustainable use of the Caribbean Sea and its natural resources.
There is also the need to increase the amount of information gathered and used for decision
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making nationally. He also referred to the need for Disaster Risk Management (DRM),
Strategic Environmental Assessment (SEA) and CCA (Climate Change Adaptation). There is
also the need to benchmark performance of the economy against measures of environmental
performance. Dr Smith also noted the need to use economic instruments to improve
environmental management.
Referring to a vulnerability index, Dr Smith suggested that this could be based on capacity to
maintain ecosystem services and unique biodiversity, and could include a number of variables
that indicate the risk faced by the environment.
6.2 Environmental Aspects of Resilience in the Pacific Region
In his introduction to the subject, Mr Bikenibeu Paeniu‟s described the main similarities of the
Pacific Island Countries (PICs) including their small territory size and small populations, and
remoteness, being located in a large ocean. The PICs all have robust cultures with
considerable traditional knowledge.
The author stated that the key environmental risks for the PICs relate to climate change
(notably because of sea level rise), cyclones and poor environmental management including
unsustainable use of fisheries and coastal resources.
There is a high reliance on energy from fossil fuel and some lack of mainstreaming of
environmental policies in national planning. In addition, certain environmental practices could
lead to the loss of important traditional knowledge and cultural heritage.
Referring to coping mechanisms, Mr Paeniu said that there are number of initiatives, mostly
in the form of written strategies. These include sustainable development strategic plans,
national biodiversity strategies and action plans, disaster risk management schemes. In
addition there are numerous environment oriented regional and national NGOs and technical
organisations including SPREP, SOPAC and representative offices of international
organisation such as the UNDP, the World Bank and the Asian Development Bank.
However there remain huge gaps that need to be seen to, including that the mentioned
strategies are not always implemented, mostly due to lack of political commitment, lack of
trained personnel, and inadequate regional cooperation
6.3 Environmental Aspects of Resilience in the AIMS Small States
Professor Opha Dube focused her presentation on a number of small states in Africa and the
Indian Ocean, some of which are islands (Maldives, Mauritius and Seychelles) some have a
coastal area (Gambia and Namibia) and some land-locked (Botswana, Lesotho, Swaziland).
She argued that although these countries differ in various factors, there are common risks
which relate to climate change and extreme weather events. Climate change is likely to have a
number of negative impacts including water shortages, decline in food production, land
degradation, and increase in veld fire activity. In addition in some of these countries there are
geophysical hazards, including volcanoes, earthquakes and tsunami, and biological threats
including pests and diseases. In a number of African small states there is a high risk of
diseases, such as malaria.
Regarding coping mechanisms, Professor Dube identified education as an important factor.
She argued that because the environment is associated to a large extent with public goods and
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externalities, government intervention is important. The establishment of Ministries of the
environment is a welcome development.
Professor Dube argued that pressure on the environment arises mostly from excessive global
focus on competitiveness for economic gain which often leads to disregard the value and
irreversibility of damage on ecosystems. A factor relating to environmental management is
the globalization process leading to the commercialization of environmental resources.
She stressed that environmental management should focus on improving livelihoods, food
security and clean water availability, taking a holistic approach. The ultimate aim should be to
enhance the capacity to sustainably absorb disturbances which negatively affect the quality of
life. In this context, she referred to the three pillars of sustainable development, namely
economic, social and environmental concerns.
6.4 Discussion on Environmental Aspects of Resilience
Highlights of the discussion:
Environmental perspective should be assigned equal importance in resilience building
given the inter-connection between the economy and the environment, especially
small states. Small islands are often highly dependent on environmental services;
Need to conduct natural resource valuation to more accurately assess the importance
of environmental assets and services and in so doing more adequately measure the
economic impact of environmental degradation; and
The environmental aspect could be looked at as an aspect of governance, with
environmental governance complementing economic and political governance, which
together lead to resilience building.
7. METHODOLOGY OF CONSTRUCTING COMPOSITE INDICES
This session was facilitated by Professor Andrew Downes, and consisted of a presentation by
Professor Lino Briguglio followed by discussion.
7.1 The Presentation
Professor Briguglio described the methodology which Briguglio et al. (2006) used to
construct their resilience index which is a composite index.
7.1.1 Choosing the components
The components of the index should be chosen carefully so as to ensure that they represent
different facets of the phenomenon that the composite index is intended to measure. For
example, in the case of the Vulnerability Index, we ask the question “which are the conditions
that render a country exposed to harm from external shocks”? In the case of the Resilience
Index, we ask the questions “which policy-induced variables reflect a country‟s ability to
withstand or counteract external shocks”. Professor Briguglio said that care should be taken to
avoid the problem of redundancy – which occurs when two or more variables measure the
same thing. This can be checked by means of correlation analysis, although there still remains
the problem as to what degree of correlation really signifies redundancy. Care should also be
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taken to ensure that the data is reliable and suitable for comparison across the units (e.g.
countries) covered by the index.
7.1.2 Rescaling the observations
Components (sub-indices) of a composite index are often measured in different units and so
straightforward summation would not be valid. For this reason the observations would have to
be rescaled. There are different approaches for rescaling.
7.1.3 Weighting Procedures
Various types of weighting schemes. In general the choice of the weights remains somewhat
subjective as it is difficult to use a scientific method to assign weights in composite indices.
There is no golden rule as to which scheme is the best and very often equal weights are used.
7.1.4 Imputation of Missing Data
Sometimes data for certain observations in an array (say an array of countries) is missing.
Professor Briguglio explained that one approach is to use the regression method to impute the
missing data.
7.1.5 Desirable and Undesirable Criteria
The desirable criteria of composite index construction may be summarised as STAR
(simplicity, transparency, affordability, and reproducibility).
Simplicity. This leads to ease of comprehension by stakeholders, decision takers and other
users of the index.
Transparency. This requires that the methodology used should be clearly explained by the
authors and that the data should be available to those who wish to assess its validity.
Affordability. The procedure used must not be excessively time consuming and the data
needed must be relatively easy to obtain and to process. In this regard there is a trade-off
between what is purely theoretical and what is practical.
Reproducibility. It should not be very difficult to reproduce the index. In turn this requires that
the index be based on variables which are measured in a homogenous manner, internationally
and temporally.
Undesirable features associated with composite indices include:
Begging the question. The index should not contain variables that bias the results in favour of
the hypothesis. For example, introducing country size as a component when the objective is to
test whether small states are more vulnerable than larger states is not acceptable.
Irrelevance. Indices that are not relevant to the phenomenon that is to be measured should
obviously be excluded. There are instances where non-relevance is not immediately obvious.
For example, in an economic vulnerability index, which is aimed at measuring the causes of
economic vulnerability (capturing features of an economy that render it exposed to external
shocks) components relating to underdevelopment (e.g. GDP per capita) should not feature as
components of the index, as these are manifestations not causes of vulnerability.
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Redundancy. Variables that are highly correlated should be considered as replicating each
other or capturing the same tendencies. In practice, decisions as to what variables are to be
excluded on the basis of this argument are not easy to take. One possibility to remedy this
situation is to test for statistical correlation and retain only those indices which are not highly
correlated with each other. This will require the setting of some maximum correlation
threshold, such as for example 0.8. However care should be taken in this regard because two
highly correlated variables may in reality have separate effects on the phenomenon. For this
reason, the redundancy problem requires that statistical analysis should be complemented by
an analysis of the variable itself.
7.1.6 Strengths and Weaknesses of Composite Indices
Professor Briguglio concluded his presentation by describing the main advantages of
composite indicators.
The strengths of composite indices include:
Summarising complex issues. The most important strength of a composite index is that it
summarises complex issues with multi-dimensional causes. This in turn has additional
advantages such as facilitating the task of benchmarking or ranking. For example countries
can be ranked against each other in a cross-section study, or else a given country can be
assessed over time in a time-series study.
Focussed discussion. In addition, given that a quantitative value has to be obtained to
construct each component of an index, a precise definition has to be articulated. For this
reason, the process of constructing a composite index may lead to a more focussed discussion
when compared to qualitative definitions.
Supporting decision making. The choice of the components requires extensive discussion
regarding their relevance and other desirable attributes, and this discussion itself can support
decision making relating the priorities to be set for the purpose of attaining high scores on the
index.
Increasing public awareness. Indices tend to attract attention regarding the phenomenon that
is being measured, and this could in turn increase public awareness and improves
communication with stakeholders relating to the issue being investigated.
The weaknesses of composite indices include:
Subjectivity. The most important weakness of composite indices relates to subjectivity,
particularly with regard to the choice of components and of the weighting schemes. Thus if a
composite index is inadvertently badly constructed, it may give out misleading messages for
policy makers and stakeholders.
Deliberate Misuse. A problem associated with subjectivity is that a composite index can also
be purposely misused by, for example, working backwards to arrive at a preferred outcome.
This can be done by assigning arbitrary high or low weights to certain components, or by
introducing irrelevant components or eliminating relevant components with the aim of
increasing the chances of the occurrence of the preferred outcome.
Averaging may conceal information. A single value derived from averaging the scores of
many components may hide important information relating to the individual components. For
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example an average score for two countries may be the same even though they may have
totally different scores in the component variables. This problem, which is pervasive in
methods involving averages, has already been discussed above and the results of the
averaging procedure have therefore to be interpreted with caution.
7.2 Discussion on Methodology and Data issues
During the discussion the TWG underscored:
The results of using a composite index will depend to a large extent on the variables
used as well as the weighting system. The use of governance indicators, encapsulating
not just economic governance but also social and environmental governance was
recommended. This raised issues of data availability;
The importance of capturing the environmental concerns of small island states, which
are often very environmentally vulnerable. The question which remained was how to
capture and represent in an index the quality of environmental management. This was
recommended for more detailed study recognizing that resilience is conditioned not
only by economic factors but also by social and environmental ones; and
Identifying and addressing data gaps was critical to developing a reliable resilience
framework. In-depth case studies on environmental management, institutional quality
and social resilience would be necessary to enhance understanding of how these
influence the ability of countries to respond to adverse shocks.
8. THE WAY FORWARD/CONCLUDING SESSION
The objective of the exercise was to identify possible refinements to the resilience framework
to allow for the formulation of key practical international, regional and national policy options
in support of resilience building in small states. To this end the TWG:
Noted the weaknesses in the current resilience framework related to the omission of
quality of governance; environmental management; and social resilience indicators;
Recommended the identification of appropriate indicators/variables to capture these in
the resilience index;
Proposed that the work to fill the gaps in the current resilience framework should
include in-depth case studies on the resilience building aspect of governance,
environmental management and social development; and
Agreed that these steps were critical to the further refinement and improvement of the
framework.
On the next steps, Janet Strachan highlighted the importance of developing a robust
framework that could be embedded in national planning to help national stakeholders to
determine priority areas for policy intervention.
She assured the group that the
recommendations were well accepted and would inform the work programme of the
Secretariat over the next strategic planning period, consistent with its strategic objective to
build the resilience of its small states and vulnerable states. In this regard the Secretariat was
focusing not just on the enabling small states to effectively participate in international
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decision-making processes but also ensuring that international policies, mechanisms and rules
were more responsive to small states‟ development strategies and resilience needs.
The work of the TWG was therefore timely in the lead up to the 2014 SIDS Global meeting in
Samoa, the 2015 Commonwealth Heads of Government meeting in Barbados and other key
international meetings.
The workshop was concluded by Ms Janet Strachan who thanked the experts for their
invaluable contribution to the workshop. She expressed gratitude to the Commonwealth
Secretariat Team (headed by Dr Denny Lewis-Bynoe, assisted by Mr Wonderful Khonje and
Daniel Amin) for their preparatory work and the overall organisation of the workshop. She
also thanked Professor Briguglio and his team at the University of Malta for their contribution
to the success of the meeting.
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APPENDIX 1: AGENDA OF THE TECHNICAL WORKSHOP
Commonwealth Secretariat
Technical Working Group on
Resilience Building in Small States
Workshop at Radisson Blu Resort,
Malta, 18-19 June 2013
BUILDING RESILIENCE IN SMALL STATES
AGENDA
DAY ONE: TUESDAY, 18th JUNE, 2013
0830-0900
COFFEE AND REGISTRATION
0900-0930
OPENING REMARKS
Janet Strachan – Commonwealth Secretariat
0930-1030
SESSION 1:
OVERVIEW OF RESILIENCE BUILDING
0930-1030
Presentation by Lino Briguglio
Discussion
1030-1100
GROUP PHOTO AND COFFEE BREAK
1100-1230
SESSION 2:
ECONOMIC ASPECTS OF RESILIENCE - REGIONAL INSIGHTS
Facilitator: Denny Lewis-Bynoe
The Caribbean Region
Presentation by Andrew Downes (University of the West Indies)
The Pacific Region
Presentation by TK Jayaraman (National University of Fiji)
The AIMS Small States
Presentation by Lino Briguglio and Anna DeGaetano (University of Malta)
Discussion on the Economic Aspects of Resilience
1230-1400
LUNCH BREAK
1400-1530
SESSION 3:
SOCIAL ASPECTS OF RESILIENCE- REGIONAL INSIGHTS
Facilitator: Cletus Springer
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The Caribbean Region
Presentation by Godfrey St Bernard (University of the West Indies)
The Pacific Region
Presentation by Desmond Amosa (University of the South Pacific)
The AIMS Small States
Presentation by Asrani Gopaul (University of Mauritius)
Discussion on the Social Aspects of Resilience
1530-1600
COFFEE BREAK
1600-1730
SESSION 4:
GOVERNANCE AND INSTITUTIONS- REGIONAL INSIGHTS
Facilitator Wonderful Khonje
The Caribbean Region
Presentation by Cletus Springer (Organization of American States)
The Pacific Region
Henry Ivarature, Programme Officer Asia and the Pacific, IDEA.
The AIMS Small States
Presentation by JP Fabri (University of Malta)
Discussion on the Governance Aspects of Resilience
1730-1900
RECEPTION
DAY TWO: WEDENSDAY, 19th JUNE, 2013
0900-1030:
SESSION 5:
ENVIRONMENT AND RESILIENCE- REGIONAL INSIGHTS
Facilitator: Janet Strachan
The Caribbean Region
Presentation by David Smith (Institute of Sustainable Development)
The Pacific Region
Presentation by Bikeibeau Paeniu (Agricultural and Resource Consultant)
The AIMS Small States
Presentation by Opha Pauline Dube (University of Botswana)
1030-1100
Discussion on the Environmental Aspects of Resilience
COFFEE BREAK
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1100-1230
SESSION 6:
METHODOLOGY
Facilitator: Andrew Downes
Presentation by Lino Briguglio (University of Malta)
Discussion of the Methodology of the Resilience Index
1230-1400
LUNCH BREAK
1400 – 1500
SESSION 6:
BRIDGING THE GAP BETWEEN RESEARCH AND POLICY
DATA GAPS AND HOW TO ADDRESS THEM
Facilitator: Henry Ivarature
Open Discussion
1500-1530
COFFEE BREAK
1530-1630
SESSION 7:
DEVELOPING THE TERMS OF REFERENCE
Facilitator: Denny Lewis-Bynoe
Open Discussion
1630-1700
CLOSING REMARKS AND VOTE OF THANKS
Janet Strachan
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