The big prize
Over the past several weeks I have been examining the thorny issue of Special and Differential Treatment (SDT) as a major contributory factor to the stalling of the Doha Development Round of negotiations in the WTO and the collapse of the recent WTO Ministerial Conference at Cancun, Mexico. As noted, within the WTO framework SDT is afforded principally to the 49 Least Developed Countries (LDCs), which are by political consensus selected by the United Nations Economic and Social Committee. On the other hand 'developing countries' are afforded some marginal SDT concessions, usually by way of longer time periods within which to fulfil their WTO obligations and some reductions in the level of their obligations. There are also 'best endeavour' commitments made by the developed countries to provide technical and institutional support to the developing countries. It would be fair to say, however, that the latter constitutes a 'soft form' of SDT, which is vastly inferior to the benefits offered in preferential trading arrangements ('the hard form') outside the WTO framework.
Although SDT was initially raised by the developing countries as a group, small states, led by the Caribbean, have vigorously sought to promote the case of SDT for small economies. This is the 'big prize' for small countries in their efforts to make the WTO system development friendly. While on the surface this may seem to be a straightforward matter, numerous theoretical, practical, conceptual and political issues have arisen along the way. Over the next few weeks I shall explore some of these making use of work I am preparing for a UNDP study of trade and small states.
What is a small state?
Simple as it might seem, determining to the satisfaction of those involved the criteria that should classify a small state is all but impossible. The intrinsic difficulty is that by definition country size is a relative and not an absolute concept. Furthermore, an acceptable workable definition for the international community would not only have to be robust in its characteristics, but simultaneously simple, accurate, practical, not too arbitrary, and above all, politically correct. The last criterion is the most difficult, if only because of the fact that the relative nature of small size will at the cut-off point leave borderline cases. And, if past experience is anything to go by, these affected countries will challenge the criteria and their exclusion, particularly if it is perceived that special benefits will flow to the category of small states.
This difficulty is not unique to small states. It also applies to developing countries and LDCs. As we saw the solution for the LDCs has been to agree on the UN selection of these states. In the case of the developing countries, the solution has been for this to be a self-determining category. That is, a developing country is deemed to be any country that so chooses to classify itself. In the case of small states, a similar self-classification also applies.
What happens in practice
As a practical matter when size is examined by inter-governmental organizations like the World Bank, IMF, WTO, IADB, and the Commonwealth Secretariat, the most commonly used indicator is population. The reason for this is that although there are exceptions, population generally tends to be highly correlated with market size and country size. The two most commonly used upper population limits are 1.5 million persons and 5 million persons. The WTO reports that there are 63 states with less than 1.5 million persons and 97 with less than 5 million persons. Given their number, small states clearly represent a very important constituency in the international community. Indeed, within the United Nations system 35 small states are recognized as Small Island Developing States (SIDS). These are all United Nations members. There are in addition two associate members of SIDS, which are independent states but not members of the United Nations. Added to these, there are 23 non-self governing territories that are recognized as SIDS. To further complicate this picture, 44 states are members of the Alliance of Small Island States (AOSIS). And in this grouping are added 'low-lying coastal states' and 'remote land-locked states' because of the presumed sharing of certain common characteristics with small states.
As one can readily see the listing above constitutes a very heterogeneous mixture of countries in terms of economic and social characteristics and political status in the international community. One can identify at least 9 groupings: 1) small countries (irrespective of their economic condition) 2) small poor developing countries 3) small countries that have achieved high levels of human development 4) small island countries (ignoring their economic conditions) 5) small poor developing island countries 6) small island countries with a high level of human development 7) low-lying coastal poor developing countries 8) remote landlocked poor developing countries 9) micro-states or mini-states. The last refers to those countries with very small populations (a few thousand) and a very small territorial size. Because this listing is self-elected, it encourages 'free riders' and gives incentives for countries to 'opt-in' and 'opt-out' of the grouping as they manipulate options in pursuing their national interests.
What is different about small states?
Underlying the problem of the listing is the recurring failure to find an answer to the central question: what makes small countries essentially different in the global economy? This column will attempt to respond to this question starting next week. For the remainder of this week's article I wish to draw readers' attention to two recent landmark documentations on small states.
One of these is the Joint Task Force of the Commonwealth Secretariat (ComSec) and the World Bank on small developing states. The Report of this Joint Task Force acknowledged the input of an earlier Commonwealth Advisory Group Report of 1997. Indeed it used the same cut-off point of 1.5 million persons living in sovereign states to define small states. The Report however added Jamaica, Lesotho, Namibia, and Papua New Guinea although they were above the population limit, on the grounds that they shared the same characteristics of smallness. The Report recognized 45 sovereign small developing states.
Second, following the 1992 United Nations Summit on Environment and Development and its agreed Programme of Action (Agenda 21) a Global Conference on the Sustainable Development of Small Island Developing States was held in Barbados in 1994. That Summit produced a Programme of Action for Small Island Developing States (SIDS POA). This SIDS summit was in fact the first action by a group of countries within the 1992 United Nations Agenda 21 Programme. The Barbados Summit led to the formation of AOSIS. Recently, at the World Summit on Sustainable Development held in Johannesburg (2002), the SIDS POA was re-emphasized and a decision taken to comprehensively review it next year (2004).