Within the current global governance construct small economies frequently face sizeable externalities in areas such as climate change, pollution or swings in global economic activity, with limited capabilities to muster a sizeable enough voice/vote share to affect global decision-making. One way to address such issues would be to create platforms of cooperation among the already existing forums, organizations and regional groups uniting small economies. There may also be scope to consider the possibility of platforms for small economies’ development institutions and investment funds that could accumulate funds and coordinate their efforts with global international organizations. In exploring such possibilities, one of the first steps would be to conduct an inventory of the existing platforms of small countries on the international stage.
Across global institutions, one example of a grouping formed by small economies is the “Small, vulnerable economies” (SVEs) group in negotiations within the World Trade Organization (WTO). According to the WTO’s website, this is a “group of developing countries seeking flexibilities and enhanced special and differential treatment for small, vulnerable economies in the negotiations[1]. The group includes 32 WTO member economies and 1 WTO observer[2] and participates in discussions on trade policy related to small economies, with scope for the WTO to increasingly take into account the position of SVEs on critical global issues such as climate change[3]. In fact, with each of WTO members exercising one vote, small economies have greater weight and possibilities to affect decision-making in the World Trade Organization compared to other global organizations such as the IMF and the World Bank.
Another example of a platform for small economies in international organizations is the Europe Small Countries Initiative within the World Health Organization (WHO). The platform is a network of 11 European countries with 2 million or less inhabitants: Andorra, Cyprus, Estonia, Iceland, Latvia, Luxembourg, Malta, Monaco, Montenegro, San Marino and Slovenia)[4]. Since its launch in 2014, the initiative served small countries in exploring solutions to health-related needs and vulnerabilities.
Apart from international organizations, there are also country platforms that bring together small economies with the goal of addressing their key economic challenges. One of them is the Alliance of Small Island States (AOSIS), a platform that comprises 39 small island and low-lying coastal developing states from Africa, Latin America and Asia and leads initiatives in international climate change and sustainable development[5]. An example of AOSIS activities to support small economies in the sphere of sustainability is the Small Island Developing States DOCK (SIDS DOCK) initiative that brings together the Government of Denmark, UNDP, AOSIS and the Energy Sector Management Assistance Program (ESMAP) of the World Bank to focus on the implementation of renewable and energy efficiency projects[6].
In terms of other cross-country platforms, there are a number of proposals to create global platforms that would bring together small economies with some of the most advanced economic policies, rendering such a platform potentially a source of scaling such policies to other economies across the globe. Apart from the OASES platform (Uruguay, Austria, Switzerland, UAE and Singapore) described in our earlier publications[7], another proposal is to create an S8 group of economies. S8nations, a non-profit organization based in Zurich, Switzerland, advances the concept of creating a global platform for small advanced economies and brings together such small economies from across the globe as Denmark, Finland, Holland, Ireland, Sweden and Switzerland in Europe as well as Singapore and Israel in Asia[8]. According to the organization’s website, “S8nations is a global initiative and platform supported by an extensive network of distinguished leaders across industry, academia, and government from outperforming small nations”[9].
Aggregating some of the above platforms across the main regions of the world economy could be conducive to the consolidation of the voice of small economies on the international arena and the resources that they can channel towards priority projects such addressing climate change. Existing platforms such as AOSIS (a transcontinental platform) or the Council of Regional Organizations of the Pacific (CROP)[10] lack scale, scope, resources and an element of economic coordination/connectivity to other platforms that would be crucial in duly addressing the challenges faced by small economies. Accordingly, an expanded “platform of platforms” for small economies focused on economic cooperation could be based on bringing together some of the country groups of small economies from the various regions of the global economy, including from the developed and developing world. For example, the OASES and/or the S8 nations groupings (that contain mostly small advanced economies) could form a platform together with the small economies of the developing world from Asia, Caribbean and Africa (AOSIS).
There could also be further gateways to building platforms of small economies via the cooperation among the regional integration blocs and regional organizations that bring together small economies. One such possible platform of “integration of integrations” could include the EFTA economies in Europe, the Caribbean Community (CARICOM) or the Organization of Eastern Caribbean States (OECS) in the Western Hemisphere as well as the Pacific Community/the Pacific Islands Forum/the Pacific Agreement on Closer Economic Relations (PACER Plus)/the Secretariat of the Pacific Regional Environment Programme (SPREP). The possible trajectories of cooperation within such an “EFTA-Caribbean-Pacific” platform could include trade liberalization and cooperation among the development institutions/investment vehicles. With respect to the latter, a platform that brings together the development institutions of small economies could include such regional development banks as the Caribbean Development Bank (CDB)[11], Central American Bank for Economic Integration (CABEI), and Pacific Islands Development Bank (PIDB)[12] from the respective regions of the Global South as well as the likes of the Nordic Development Fund (NDF) from small advanced economies.
In the end, with intensifying shifts in global governance and increasing severity of global challenges such as climate change or food and energy shortages, large, medium and small economies are seeking to join platforms that would address their evolving needs and priorities. After the largest economies of the world have already built their platforms such as G7, G20, BRICS, small and medium-sized economies are starting to explore the possibilities for building various new platforms to fit their priorities and national interests. The so-called middle powers, economies that are among the leaders in their respective regions, are looking to explore the possibilities of joining platforms that may enable them to play a more active/prominent role on the global stage – the surge in applications from such economies to join BRICS/BRICS+ is one such sign.
A more concerted effort by small economies to create their own platforms of economic cooperation that allow for an aggregation of their potential at the global level would position this group of economies more prominently on the world stage and allow for the pooling of existing resources. There may be scope to also explore the possibility of building connections of such small economy platforms to other blocs and forums such as G20 (perhaps as part of the regional 20/R20[13] engagement group that could be created within the G20) – something that would redound to greater inclusivity in the evolution of the global economy. Among the international organizations that could provide assistance to small economies in the aggregation of such platforms, the United Nations Development Programme (UNDP) is particularly well-positioned in view of its ample experience in bringing together a wide range of stakeholders in supporting small developing countries, including through such initiatives as the Progressive Platforms project[14].
[1] https://www.wto.org/english/tratop_e/dda_e/negotiating_groups_e.htm
[2] WTO members (32): Antigua and Barbuda, Barbados, Belize, Bolivia, Plurinational State of, Cabo Verde, Cuba, Dominica, Dominican Republic, El Salvador, Ecuador, Fiji, Grenada, Guatemala, Guyana, Honduras, Jamaica, Maldives, Mauritania, Mauritius, Mongolia, Nicaragua, Panama, Papua New Guinea, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Samoa, Seychelles, Sri Lanka, Tonga, Trinidad and Tobago, Vanuatu; WTO observers negotiating accession (1): Bahamas
[3] https://academic.oup.com/book/57559/chapter-abstract/468954923?redirectedFrom=fulltext
[4] https://www.who.int/europe/initiatives/small-countries-initiative
[5] https://www.aosis.org/about/chair-of-aosis/
[6] https://www.esmap.org/SIDS_DOCK
[7] https://brics-plus-analytics.org/from-brics-to-oases-a-global-platform-for-small-economies-on-the-international-arena/
[8] https://www.s8nations.org/about
[9] https://www.s8nations.org/about
[10] https://forumsec.org/council-regional-organisations-pacific-crop
[11] https://www.caribank.org/
[12] https://pacificidb.com/
[13] https://t20japan.org/policy-brief-regional-trade-blocs-global-governance/
[14] https://www.undp.org/blog/progressive-platforms-backing-small-island-developing-states-and-least-developed-countries-meet-climate-challenge
Yaroslav Lissovolik, Founder, BRICS+ Analytics
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