A Commonwealth Vulnerability Index for Developing Countries

The Position of Small States

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There is growing international recognition that high economic exposure, remoteness, isolation and proneness to natural disasters all have a debilitating effect on small economies, despite the fact that some of them exhibit relatively high per capita incomes. This paper presents a Commonwealth vulnerability index that is designed to quantify vulnerability, and hence provide a means to identify vulnerable states. This index can be used as an operational tool in determining whether small states should be accorded differential treatment by the international community. It is intended as an additional criterion to augment other factors, such as per capita income, which are taken into account in reaching decisions on the treatment of certain developing countries by international organisations.




To conclude, the work has both demonstrated the feasibility of constructing an index of vulnerability to reflect the excess volatility in output growth and has highlighted the susceptibility of small states, in particular, to external economic forces and environmental hazards. The index is based on sound economic precepts and appropriate statistical procedures. As such, the international community could use it as an analytical and operational tool in assessing the case for special and differential treatment of vulnerable small states.


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