EDITORIAL: Treat small states fairly

It is becoming increasingly clear that, far from going away, the struggles and the challenges that small developing countries continue to face, are broadening. There is no letting up to this assault and big countries must recognize the realities of smaller states and give them the necessary support in harnessing their economic endeavours.

But what do we have? Small states have been graduated, that is, prevented from accessing concessionary World Bank financing because some of them have high per capita incomes.

At the World Trade Organization (WTO) the big countries continue to erect trade barriers to the imports from small developing countries, while insisting however that these micro states open their markets to exports from the big countries. This approach to trade policy-making has dogged the WTO for several years after its emergence in 1993.

On top of this, and just recently, the European Union took a decision to blacklist a number of small countries which have thriving international business sectors.

That action stemmed from what the EU indicated was a lack of cooperation on the part of the same small countries to new rules on taxation governing their offshore businesses. That the EU’s action coincides with the same template, which Organization for Economic Cooperation (OECD) has been operating on in its relations with small countries, emphasizes what the stakes are in this type of business.

Not so long ago this region heard that multilateralism was gradually giving way to bilateralism, all of which hold significant implications for small countries. If countries are unable to get their way in the multilateral negotiations like what takes place within the WTO, then they will be more inclined to go after them when conducting bilateral relations with individual trading and business partners.

The global community consists of both large and small countries. The category of small countries includes a sub-group that is classified as Small and Vulnerable Economies (SVEs) on the basis of their small economic size, openness and being prone to economic and non-economic shocks, and to disasters like hurricanes and earthquakes.

Some of the specialized agencies within the United Nations system have argued a convincing case for these SVEs to be given special attention and treatment. This is based on the premise that they lack the resources, both physical and natural, to have competitive economies and to have industries which one normally associates with the industrialised nations.

Hence many of them have turned to offshore financial services as an economic option. Small states want to get on with the job of developing their economies, providing for their people and where necessary trade surplus production with the rest of the world. Both the OECD and the EU, whose membership intertwined, are fully aware of these things.

So rather than trying to smash the offshore sectors that small countries are promoting as one of their economic options, they should be more accommodating to these states who, from all indications, are conforming with the regulatory requirements put on the table. Since 2000 the OECD started the campaign against these countries and continued to do so periodically. They have to respect the rights of all nations for a better life for their people instead of trying to carve out everything for themselves. This amounts to bullying on the part of big countries.