By Paul Akiwumi, Director for Africa and Least Developed Countries, UNCTAD
Small island developing states (SIDS) are the most economically vulnerable of all groups of developing countries, according to the Economic Vulnerability Index. They are particularly vulnerable to natural, economic and health-related shocks beyond domestic control. The growing frequency and intensity of these climate shocks is a direct consequence of being in climate-sensitive areas or seismic zones, as well as the islands’ smallness. From commodities to manufactured spare parts, these states also rely heavily on imports of food and fuel, leaving them at the mercy of price spikes and shortages of essential goods.
Riad Meddeb, Senior Principal Advisor for Small Island Developing States, UNDP
This blog is part of a series on tackling COVID-19 in developing countries. Visit the OECD dedicated page to access the OECD’s data, analysis and recommendations on the health, economic, financial and societal impacts of COVID-19 worldwide.This blog is also a part of a thread looking more specifically at the impacts and responses to the COVID-19 crisis in Least Developed Countries (LDCs).
Small Island Developing States (SIDS) have experienced great success in expanding their tourism industries, particularly over the past 10 years. The industry is an economic lifeline and driver of development for many SIDS. Their rich biodiversity and beautiful ecosystems attracted around 44 million visitors in 2019. However, global travel restrictions imposed as a result of the COVID-19 pandemic have devastated SIDS’ economies. Compared to Gross Domestic Product (GDP), export revenues from tourism represent about 9% of SIDS economies. In countries like St. Lucia and Palau, tourism revenues make up 98 and 88 percent of total exports respectively. It is a vital source of revenue for community livelihoods, disaster recovery, biodiversity and cultural heritage preservation.
2017 will go down as a landmark year given the huge impact of hurricanes on the economic, social and ecological environments in the wider Caribbean. The decimation of several island territories, such as Dominica, Anguilla, Barbuda, St. Maarten, Turks and Caicos, US and British Virgin Islands, and Puerto Rico have taken hundreds of lives and destroyed livelihoods in key sectors like tourism. Take the case of Dominica that had a direct hit from category 5 hurricane Maria on September 18, 2017.1 It is estimated that 35% of the reefs at dive sites in Dominica were damaged, and a month later only 43% of accommodation properties are operational. Hurricane Maria went on to hit Puerto Rico that is now facing a humanitarian crisis.2