PART II - Overseas Development Institute (ODI)Suriname Grenada Dominican Rep. Antigua & Barbuda St....
Transcript of PART II - Overseas Development Institute (ODI)Suriname Grenada Dominican Rep. Antigua & Barbuda St....
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
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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).
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1. FRAGILE STATES
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2. VULNERABILITY IN SIDS
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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
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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.
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Real income
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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
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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 (%)
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Source: World Bank WDI (2010).
Poverty
Figure 5: Poverty Rate in Selected Caribbean and Pacific Island Economies (%)
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0
10
20
30
40
50
60
70
Source: Chapter 10
Capital Flows
Figure 6: Aid, Remittances and FDI, 1980 to 2006
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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
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Source: Santos-Paulino, Naudé and McGillivray (2010).
Natural Disasters
Figure 7: Occurrence of natural disasters in the Caribbean, 1970-2006
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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)
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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.
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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.
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Women suffer the most: they represent 70% of the world´s estimated 1.3 billion poor.
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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.
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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.
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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.
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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.
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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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