This is the first study to look at the trade effects of the current global slowdown on small states. Export industries in these countries have been affected at least as much as those of other developing countries. Given their reliance on trade, this means that the overall economic impact on small states may be greater than for other developing countries, all the more so for those countries exporting minerals and fuels, and luxury goods and services, such as beef and tourism.The authors suggest a number of policy responses for governments of small states which may help to address the issues...

Small states are vulnerable to the effects of the global financial crisis because of their high dependence on foreign direct investment, the importance for them of export earnings, and high levels of remittances and aid flows. The crisis thus also in turn affects investment and private sector development. This Economic Paper examines the effects of the crisis on three countries: Mauritius, St Lucia and Vanuatu. Only Vanuatu is relatively resilient so far, with the effects on investment in Mauritius and St Lucia being dramatic, though affecting different sectors in each country. The policy...

This "Economic Paper" presents the first analyses of the use and effectiveness of Aid for Trade (AfT), the initiative to help developing countries boost their involvement in the global economy, for small and vulnerable economies (SVEs). It examines in detail the extent to which SVEs have been able to access AfT funds and to what extent this assistance has helped them to improve their trade performance. Well designed trade-related assistance will help SVEs face the challenges posed by their characteristics, particularly when the prospects for small states have been deteriorating further due to...