THE VULNERABILITY INDEX AND SMALL ISLAND DEVELOPING STATES A REVIEW OF CONCEPTUAL AND METHODOLOGICAL ISSUES Lino Briguglio University of Malta AIMS Regional Preparatory Meeting on the BPoA 10 Review 1-5 September 2003, Praia, Cape Verde - PowerPoint PPT Presentation

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Title: THE VULNERABILITY INDEX AND SMALL ISLAND DEVELOPING STATES A REVIEW OF CONCEPTUAL AND METHODOLOGICAL ISSUES Lino Briguglio University of Malta AIMS Regional Preparatory Meeting on the BPoA 10 Review 1-5 September 2003, Praia, Cape Verde


1
THE VULNERABILITY INDEX AND SMALL ISLAND
DEVELOPING STATESA REVIEW OF CONCEPTUAL AND
METHODOLOGICAL ISSUES Lino BriguglioUniversity
of MaltaAIMS Regional Preparatory Meeting on
the BPoA10 Review1-5 September 2003, Praia,
Cape Verde
2
ECONOMIC VULNERABILITY OF SIDS It is
increasingly being realised that policy and
decision-making require indices to succinctly
summarise tendencies and trends in the variables
under consideration. The advantages associated
with such indices are numerous, but the most
important advantage would seem to be that these
can be used to represent complex phenomena in a
format which permits easy comparison over time,
or across subjects.
3
ECONOMIC VULNERABILITY OF SIDSEconomic
vulnerability stems from a number of inherent
characteristics of SIDS? A high degree of
economic openness rendering these states
particularly susceptible to economic conditions
in the rest of the world ? Dependence on a
narrow range of exports, giving rise to risks
associated with lack of diversification.
4
ECONOMIC VULNERABILITY (Cont)? Dependence on
strategic imports, in particular energy and
industrial supplies, exacerbated by limited
import substitution possibilities. ?
Insularity, peripherality and remoteness, leading
to high transport costs and marginalization. ?
The small size of SIDS, which limits their
ability to reap the benefits of economies of
scale and poses additional constrains.The size
variable should not however form part of the
vulnerability index because it will bias the
results in favour of SIDS
5
ECONOMIC VULNERABILITY (Cont)In spite of their
economic vulnerability, many small states do not
register very low GNP per capita. This gives the
impression of economic strength, and masks the
fact that SIDS are fragile and dependent to a
high degree on conditions outside the countrys
control. This issue will be discussed further
below in the context of nurtured resilience.
6
ENVIRONMENTAL VULNERABILITY Small island
states tend also to be environmentally
vulnerable, mainly due to ? Limited
assimilative and carrying capacity, leading to
problems associated with waste management, water
storage and other factors associated with small
territorial size. ? A relatively large
coastal zone, in relation to the land mass,
making these states especially prone to exposure
to waves, winds, and erosion.
7
ENVIRONMENTAL VULNERABILITY (Cont) ? Fragile
ecosystems, because of low resistance to outside
influences. ? Proneness to natural disasters,
including earthquakes, volcanic eruptions,
cyclones, hurricanes, floods, tidal waves and
others. ? A relatively high proportion of land
which could be affected by sea level rise. ?
Economic development has relatively large impacts
on the environment.
8
SOCIAL VULNERABILITY Social vulnerability has
been defined in terms of the extent to which the
social structure of a community or a society is
exposed to shock or stress brought about by
economic strife, environmental changes,
government policies or internal events and forces
resulting from a combination of factors. In his
work for ECLAC on social vulnerability, St
Bernard (2002) also focuses on factors generated
internally, relating to education, health,
resources allocation and communications.  
9
SOCIAL VULNERABILITY (Cont) It can be argued
that social vulnerability, as defined above, is
likely to occur in most developing ones, but the
impact on SIDS may be higher, given the special
economic and environmental vulnerabilities of
SIDS, and given that a much larger proportion of
the population is likely to be effected by social
events.
10
SOCIAL VULNERABILITY (Cont) However, there are
studies which would seem to indicate that social
cohesion is stronger in SIDS than in larger
territories. This argument is put forward by
Streeten (1993), who also suggests that small
states may be more flexible and resilient in the
face of adverse events
11
SOCIAL VULNERABILITY (Cont) This view is of
course not shared by all authors. A Commonwealth
Secretariat study concluded that small states
have higher inequality than larger states and are
more exposed to external shocks (Commonwealth
Secretariat, 2000). This may be due to a widely
dispersed populations in some small archipelagic
island states, with a large percentage of income
and employment occurring near the administrative
centre.
12
SOCIAL VULNERABILITY (Cont) An important
consideration is that while in the case of
economic, environmental, climate change and
disaster vulnerability the thrust of the argument
relates to damage caused by external forces, and
not the result of domestic polices, in the case
of social vulnerability, there seems to be more
emphasis on internal factors. We will come back
to this issue later.
13
CLIMATE CHANGE VULNERABILITY Small island
states are generally located in the tropics and
the subtropics in the Pacific and Indian Oceans
and in the Caribbean Sea. The ocean therefore
exerts a major influence on their physical,
natural, and socioeconomic structures and
activities. The economic and environmental
vulnerabilities just outlined limit the capacity
of small island states to adapt to future climate
change and sea-level rise.
14
CLIMATE CHANGE VULNERABILITY (Cont)The IPCC
(WGII) Third Assessment Report on Impacts,
Adaptation and Vulnerability to Climate Change
(IPCC, 2001 Chapter 17) concluded that given
their high vulnerability and low adaptive
capacity to climate change, communities in small
island states have legitimate concerns about
their future on the basis of the past
observational record and climate model
projections.
15
CLIMATE CHANGE VULNERABILITY (Cont)The Report
identified the following key issues among the
priority concerns of small island states?
Equity issues? Sea-level rise ? Beach and
coastal changes. ? Biological systems
?Biodiversity ? Water resources, agriculture,
and fisheries          ? Human health,
settlement and infrastructure? Tourism?
Socio-cultural and traditional assets.
16
TRADE VULNERABILITY According to Assad Bhuglah
(2002) several SIDS are facing major difficulties
in their negotiations of accession to the WTO
both in terms of financial costs and
liberalisation commitments. They are being urged
to undertake the same level of obligations as
large countries and to make extensive
liberalisation commitments that are much beyond
their financial and developmental needs. 
17
TRADE VULNERABILITY (cont)Recent international
developments are rendering SIDS more vulnerable
than ever before. Both the WTO and developed
countries have taken positive and concrete steps
to help the LDCs but they are yet to recognise
the precarious existence and vulnerability of
SIDS. Bhuglah argues that because of their high
dependence on trade and their weak capability to
adjust, special consideration must be extended to
SIDS as well. 
18
TRADE VULNERABILITY (cont)Given the very high
dependence of SIDS on trade taxes and on trade
preferences, adherence to the WTO rules is likely
to have lower net positive impacts on SIDS than
on larger territories, assuming of course, the
net result of free trade would be positive. The
adoption of the WTO rules regarding subsidies are
also likely to hit small states harder than
larger ones, due to the relatively high per unit
costs (mostly due to high overhead costs) of
manufacturing in small states.    
19
TRADE VULNERABILITY (cont)Another source of
trade vulnerability relates to dispute settlement
arrangement. Many SIDS find it extremely
expensive to bring cases and mounting a WTO
defense in Geneva.   
20
DISASTER VULNERABILITY Many SIDS experience
natural disasters caused by cyclones (hurricanes
or typhoons), earthquakes, landslides and
volcanic eruptions. Although natural disasters
also occur in other countries, the impact of a
natural disaster on an island economy where
disasters occur is expected to be relatively
larger in terms of damage per unit of area and
costs per capita, due to the small size of the
countrys territory.
21
DISASTER VULNERABILITY (Cont) In some instances
natural disasters threaten the very survival of
some small islands. Some of the effects of
natural disasters on small economies include the
devastation of the agricultural sector, the
wiping out of entire village settlements, the
disruption of a high proportion of communication
services and injury or death of a relatively high
percentage of inhabitants.  
22
DISASTER VULNERABILITY (Cont)  As already
stated, small islands have a relatively large
coastal zone, rendering them particularly
vulnerable to marine hazards. Due to the small
land area of SIDS, a particular event often
affects a large proportion of the population and
a large section of the economy. For example
tropical cyclones often devastate whole sugar
plantations in the small island states of the
Caribbean.  
23
DISASTER VULNERABILITY (Cont)  These states
tend to be less-diversified in their production
and export structures and depend on a narrow
range products. A given dangerous event,
therefore, is likely to result in a higher degree
of disruption, than is the case with larger
states.
24
VULNERABILITY AND RESILIENCE When discussing
vulnerability, the issue of resilience often
crops up. This term refers to the ability of an
affected subject to recover quickly from a
damaging impact. Resilience, as defined here, is
also associated with the coping ability of the
affected subject, with regard to the damaging
impact. In climate change language it may be
associated also with adaptation.  
25
VULNERABILITY AND RESILIENCE (Cont) Resilience
may be inherent or nurtured. The inherent aspect
of resilience may be considered as the obverse of
vulnerability, in the sense that inherently
resilient countries should register low
vulnerability scores. However, nurtured
resilience, namely that which is developed and
managed, often as a result of some deliberate
policy, should not be confused with inherent
vulnerability.
26
VULNERABILITY AND RESILIENCE (Cont) Here we
refer to the Singapore Contradiction where an
inherently economically vulnerable small state
has managed to cope with this vulnerability
through deliberate economic development policies.
In this case the ability to cope was
nurtured.  
27
VULNERABILITY AND RESILIENCE (Cont)  Recently,
there has been considerable debate on the issue
of building resilience in SIDS. This issue is
important because it carries the message that
SIDS should not be complacent, even if inherently
vulnerable. In other words they should adopt
measures to step up economic, environmental and
social resilience. In addition, the discussion
on resilience sheds light as to why a number of
vulnerable SIDS have managed to do economically
do well in spite (and not because) of their
economic vulnerability. 
28
THE ORIGINS OF THE VULNERABILITY INDEXThe
concept of the vulnerability index was developed
by the present author during the second half of
the eighties as it was felt that it was desirable
to measure economic vulnerability, given that
many small island states, including Malta, were
registering relatively high GDP per capita
scores, concealing their inherent economic
fragility.
29
THE ORIGINS OF THE INDEX (Cont)The construction
of the index was first formally proposed, within
the UN system, by Malta on 26 June 1990, during
the meeting of Government Experts of Island
Developing Countries and Donor Countries and
Organisations, held under the auspices of
UNCTAD.The first attempt by the present author
at producing an index was in 1992 for a study
commissioned by UNCTAD.
30
THE ORIGINS OF THE INDEX (Cont)When the General
Assembly, at its 47th session, resolved to
convene this SIDS Global Conference which was
subsequently held in Barbados in April 1994, the
vulnerability index featured prominently in the
preparatory meetings and in Programme of Action
(BPoA) for the Sustainable Development of Small
Island Developing States . 
31
THE ORIGINS OF THE INDEX (Cont)Paragraphs 113
of the BPoA stated that "Small Island
developing States, in cooperation with national,
regional and international organizations and
research centres, should continue work on the
development of vulnerability indices and other
indicators that reflect the status of Small
Island developing States and integrate ecological
fragility and economic vulnerability...  
32
THE ORIGINS OF THE INDEX (Cont)The first peer
reviewed paper on the Vulnerability Index was
published by the present author in World
Development of September 1995. Subsequently, the
Commonwealth Secretariat and individual
researchers, notably Tom Crowards, produced their
own versions of the economic vulnerability
index. During the late nineties, an
Environmental Vulnerability Index (EVI) also
started to be developed by SOPAC. At present
there are attempts to develop a Social
Vulnerability Index (SVI). 
33
METHODS OF COMPUTATIONThere are three basic
methods for computing a composite vulnerability
index ? Method 1. Standardising the
components. This involves summing the scores of
the components of the index for each country.
Since the components are measured in different
units, summing these variables requires
standardisation of the observations (Briguglio,
Chander, Wells, Crowards, CDP). The formula
used to standardise the variables is usually
Observed score Minimum score, divided
byMaximum score Minimum scoreso that the
range of standardised values is between 0 and 1.

34
METHODS OF COMPUTATION (Cont) ? Method 2
Mapping on a categorical scale. This method is
used by Kaly et al for the EVI. They take a
scale of 1 to 7 and then they average the score
of the different components for each country
(EVI, Kaly et al, SOPAC) ? Method 3 The
Regression method. This involves using the
estimated coefficients as weights and taking the
predicted values of the dependent variable as the
composite vulnerability scores (Comm.
Secretariat.)
35
METHODS OF COMPUTATION (Cont) In what follows,
we shall concentrate on the Economic,
Environmental and Social Vulnerability Indices,
which were developed with an interest in SIDS.
Although many other vulnerability indices were
developed, these will not be reviewed in this
paper.
36
ECONOMIC VULNERABILTY INDEX  The economic
vulnerability indices generally include a
relatively small number of variables, often
limited to three to five. One reason for this is
that many economic variables are correlated with
each other and one variable could be used to
represent others.
37
ECONOMIC VULNERABLE INDEX (Cont) The most
frequent variables used as components of economic
vulnerability indices relate to ? Economic
openness ? Export concentration ? Dependence
on strategic imports ? Peripherality
38
ECONOMIC VULNERABLE INDEX (Cont) The Committee
for Development Policy (CDP of the UN ECOSOC)
uses the following variables for its Economic
Vulnerability Index ? Export Concentration ?
Instability of Agricultural Production ?
Instability of Exports ? Population size ?
Share of Manufacturing and Modern Services.The
CDP index is used for the classification of LDCs.
The component measuring population size renders
this approach problematic for assessing the
vulnerability of SIDS since this component would
bias the results in favour of small states.
39
ECONOMIC VULNERABLE INDEX (Cont) An important
consideration relating to the economic
vulnerability index relates to resilience.
Briguglio and Galea (2003) constructed an index,
which incorporates an economic resilience
component, calling it EVIAR (Economic
Vulnerability Index Adjusted for Resilience).
They argued that a simple indicator of resilience
is GDP per capita, because this variable captures
a countrys material ability to cope with
vulnerability. The attraction of GDP per capita
is that it is readily available, and can be
adjusted for purchasing power standard.
40
ECONOMIC VULNERABLE INDEX (Cont) The EVIAR may
help explain the Singapore Contradiction
already referred to above, namely that we can
have inherently vulnerable countries which,
mostly though suitable policies, have succeeded
in strengthening their economic resilience, and
overcoming their vulnerability.
41
ECONOMIC VULNERABLE INDEX (Cont) In its
important contribution to research on the
Vulnerability Index, the Commonwealth Secretariat
uses GDP (and not GDP per capita) as a resilient
component, assuming that the larger the GDP the
better is the ability to cope.The problem with
using GDP as against GDP per capita is that the
results will be biased in favour of small
states, leading to the conclusion that small
states are less resilient by assumption thereby
begging the question.
42
ECONOMIC VULNERABLE INDEX (Cont) All Economic
Vulnerability Indices arrive at the conclusion
that small states (most of which are SIDS) are
among the most vulnerable countries.An expert
group meeting held at the United Nations
Headquarters in December 1997, after reviewing
the vulnerability indices produced until then,
concluded that SIDS, tend to more vulnerable as a
group than other groups of countries.
43
ENVIRONMENTAL VULERANILITY INDEXThe
Environmental Vulnerability Index (EVI) developed
by Kaly et al utilises a large number of
variables (54 in all) since, as argued by the
authors, a large number of indicators are
required for complex ecological systems. Each
indicator was measured along a 7 point scale,
where 7 represented the highest incidence and 1
the lowest. 
44
ENVIRONMENTAL VULERANILITY INDEX (Cont)
Components of the EVI? A sub-set of
indicators to measure the Level of risks (or
pressures) which act on the environment forming
the risk exposure sub-index (REI) ? Another
sub-set of indicators to measure Intrinsic
resilience of the environment to risks (IRI) ?
A third sub-set measure Extrinsic vulnerability,
forming the environmental degradation sub-index
(EDI) which describes the ecological integrity  
45
ENVIRONMENTAL VULERANILITY INDEX (Cont) Due to
the fact that the index is composed of many
sub-indices, many of which are not published in
any international statistical review, progress
with the EVI has been slow, inspite of the
admirable effort of SOPAC. In fact, currently the
index cannot be said to be operational, and
although SOPAC published what it called a
demonstration EVI for 235 countries, this can
be considered as work in progress given that
data were unavailable for 13 of the 54 indicators
for all countries. This means that none of the
countries attained the condition of the EVI that
at least 80 of the indicators must be evaluated
for a valid EVI score
46
ENVIRONMENTAL VULERANILITY INDEX (Cont) The
results of the demonstration EVI do not exhibit
a tendency that SIDS are in general more
environmentally vulnerable than larger
territories, although, as stated, data
deficiencies do not permit clear-cut conclusions
in this regard.SOPAC has however indicated that
it is working on finalising it in time for the
August Mauritius meeting on the BPoA10
47
SOCIAL VULERANILITY INDEX (SVI)A call for the
creation of the SVI has been made in the
Singapore declaration of the Alliance of Small
Island States during the Inter-regional
preparatory meeting for the World Summit on
Sustainable Development held in Singapore from 7
to 11 January 2002. 
48
SOCIAL VULERANILITY INDEXThe computation of a
social vulnerability index is still at a
rudimentary stage. The main initiative in this
regard has been taken by UN-ECLAC, and
representatives of this organization have
proposed the construction of such an index for
the Caribbean region. ECLACS output in this
regard associated with the work of Godfrey St
Bernard. As far as is known by the present
author, a global social vulnerability index to
compare vulnerability scores across countries
has not so far been produced.
49
SOCIAL VULERANILITY INDEX (Cont)The ECLACs SVI
has 10 components ? Education, with 3
indicators respectively measuring exposure to
secondary and tertiary education level and adult
literacy ? Health, with 1 indicator,
measuring life expectancy at birth? Security
and social order, with 1 indicator? Resources
allocation, with 4 indicators, measuring poverty
and relating poverty to lack of primary
education, lack medical insurance, and
unemployment and ? Communications
architecture, with 1 indicator relating to
computer literacy.
50
SOCIAL VULERANILITY INDEX (Cont)In the case of
the SVI, there are a number of conceptual issues
that have yet to be resolved. These include ?
Should the index be concerned with poverty and
factors that lead to poverty. In this case the
term poverty index would seem to be more
appropriate then vulnerability index. ? Should
the index be concerned only or mostly with
internal forces or with damage caused by exposure
to external factors, such as the globalization
process.  
51
SOCIAL VULERANILITY INDEX (Cont) ? Should the
index be based on the argument that once it is
proven that SIDS are more economically and
environmentally vulnerable than larger
territories, than it follows that SIDS are also
more socially vulnerable. In this case, the
development of a separate social vulnerability
index might not be needed.  
52
SOCIAL VULERANILITY INDEX (Cont)The present
author is of the opinion that one approach to
tackle these issues is to call this index a
socail resilience indicator, on the assumption
that countries that are economically and/or
environmentally vulnerable due to their exposure
to damage from external factors, will be less
able to cope or bounce back if they are socially
fragile or conversely better able to cope if
they are socially resilient.  
53
COMBINING THE ECONOMIC AND ENVIRONMENTAL SOCIAL
AND VULNERABILITY INDICESTo date there has not
been a serious attempt to create a
super-composite index which combines
environmental, economic and social vulnerability.

54
WEAKNESSES OF THE INDEXThere are a number of
weaknesses in the currently developed
Vulnerability Indices. These weaknesses are
principally associated with ? The subjectivity
in the choice of variables? Data Problems? The
weighting and averaging procedure? The problem
of aggregation? Political aspects of pitching
one country against another.
55
WEAKNESSES (cont)Subjectivity. The subjectivity
in the choice of variables is difficult to
resolve. This problem can be minimised if the
objective of the index is clearly spelled out. In
the case of the vulnerability index, the present
author has many times tried to define the
objective of the index so as to? avoid using
variables which reflect poverty or
under-development (the objective is to measure
vulnerability and not poverty)? include only
those variables which are related to inherent
conditions, and not to self inflicted
problems.? choose variables which reflect
vulnerability, defined as proneness to damage
from external forces.
56
WEAKNESSES (cont)Data Problems. The most
important problems are generally associated with
the following? Lack or shortage of data ?
Non-homogenous definitions across countries ?
Unwillingness by the proprietors of the data to
make this data available to third parties ?
Deliberate misrepresentations to advance the
interests of the country providing the data ? In
the case of environmental data, there is an
absence of an international auditing agency to
ensure consistency in the data (for economics
data there are agencies such as the IMF and World
Bank).
57
WEAKNESSES (cont)Averaging and weighting
procedure. The single value which is produced by
a composite index may conceal divergences between
the individual components or sub-indices,
possibly hiding useful information averaging
would conceal, for example, situations where the
effect of one variable cancels out the effect of
another. In addition there is the problem of
whether to take a simple average or a weighted
average. In general, the weighting problem
remains in the realm of subjectivity, with the
simple average having a favourable edge on
grounds of simplicity.  
58
WEAKNESSES (cont)Aggregation problems. An issue
that often emerges in discussions on
vulnerability indices relates to the level at
which indices should be aggregated national or
regional. The Economic Vulnerability Index and
the Environmental Vulnerability Index are pitched
at the national level, thereby comparing large
countries like China, the Russian Federation and
the United States of America, with very small
islands states.
59
WEAKNESSES (cont)Aggregation problems (cont).
To some this would seem to be a meaningless
comparison. For example, in each large nation one
is bound to find vulnerable and non-vulnerable
regions, so that when aggregating, the average
would not really represent the conditions in the
individual regions. However, given that these
indices are required to make a case that certain
countries or group of countries are more
vulnerable than others, country comparisons
cannot be avoided.  
60
WEAKNESSES (cont)Aggregation problems (cont).
One possible solution is to work out
vulnerability indices at the regional level, so
as to provide some sort of standard deviation
from the national average. However there are two
pitfalls in this regard. The first is that data
is often difficult to obtain at the regional
level. The second is that even regions have
sub-regions with different vulnerabilities, which
again have different sub-sub regions, and if this
argument is taken to its absurd conclusion, it
would be difficult to decide when to stop the
disaggregation process.  
61
WEAKNESSES (cont)Political aspects. As stated
Vulnerability Indices are generally pitched at
the national level. This may create problems of a
political nature, in that the results could pit
nations against each other. This problem may lead
to lack of political support from certain
countries who do not receive high vulnerability
scores on the index.
62
BENEFITS OF THE VULNERABILITY INDEX  There are
many benefits associated with the production of a
Vulnerability Index  ? The index can draw
attention to the issue of economic and
environmental vulnerability of SIDS, LDCs and
other vulnerable countries? The index presents
a single-value measure of vulnerability based on
meaningful criteria and this can be considered
for the allocation of financial and technical
assistance or for assigning special status to
vulnerable countries
63
BENEFITS OF THE INDEX (cont)  The index has a
number of additional benefits ? It can support
decision-making and can be useful for setting
targets and establish standards, ? It can be
used to monitor and evaluate developments and to
provide quantitative estimates. ? It can help to
disseminate information on the issue being
investigated, namely vulnerability. ? It helps
to focus the discussion, avoiding irrelevant
digressions, given that the components have to be
narrowly defined for quantification. ? Given
that a number of components are involved, the
index can promote the idea of integrated action.
64
DESIRABLE ATTRIBUTES If the index is to receive
support and if it is to be operational, it has to
satisfy a number of criteria ? Simplicity. One
of the advantages of simplicity is ease of
comprehension by decision-takers and other users
of the index. It also permits replication by
third parties for evaluation and verification.?
Affordability. This criterion is related to the
simplicity criterion. Data must be relatively
easy to obtain and to process. Preferably it
should be collected as a matter of routine in
line with the information required for the
management of a country.
65
DESIRABLE ATTRIBUTES (Cont) ? Suitability for
international and temporal comparisons. The index
of the type we are discussing in this paper (i.e.
developed for the purpose of comparing scores
across countries) must be based on variables
which are measured in a homogenous manner
internationally and temporally.? Transparency.
The index should be verifiable and reproducible
by persons other than the original producer of
that indicator. This will be essential for
validation, evaluation and quality control
purposes. This requires that the methodology used
should be clearly explained by those constructing
the index.
66
CONCLUSIONAs stated, the Economic Vulnerability
Indices produced so far indicate clearly that
SIDS tend to be more economically vulnerable than
other groups of countries. Understanding and
measuring vulnerability should therefore be a
priority for all SIDS, and should be done well,
in line with the criteria just listed,
particularly transparency.In addition, the
building of resilience against vulnerability
should therefore take centre stage in the
sustainable development strategy of such states.
67
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