This document discusses concepts related to vulnerability, resilience, and adaptive capacity in the context of small states. It provides definitions and explanations of these concepts from various scholars. Vulnerability is defined as exposure to risks and ability to cope or recover from shocks/stresses. Resilience refers to ability to withstand or recover from disturbances while maintaining core functions. Adaptive capacity is ability to adjust to changes through learning, innovation, and policy changes. The document also discusses sources and dimensions of vulnerability for small states, including economic, social, environmental, and security vulnerabilities. Specific domestic policies for small states to build resilience through areas like tourism, financial services, infrastructure, education are outlined. The concept of an economic resilience index is explained.

1. INRL 6003
SMALL STATES IN THE GLOBAL SYSTEM
Vulnerability and Resilience
WEEK THREE
Dr. Jacqueline LAGUARDIA MARTINEZ
INSTITUTE OF INTERNATIONAL RELATIONS
UNIVERSITY OF THE WEST INDIES
Jacqueline.Laguardia-Martinez@sta.uwi.edu

2. Vulnerability: some concepts (1)
• According to Birkmann et al. (2011), vulnerability comprises conditions and
processes that determine the exposure (the nature and degree to which a
system is exposed to significant variation) and susceptibility (degree to which
something is or is likely to be affected by or responsive to changes) of a system
or object to hazards, as well as its capacities to respond effectively to them, be
they physical, social, economic or environmental. It is not only external natural
hazards (such as those arising from climate change) that are deemed responsible
for a particular form of vulnerability. Instead, internal, or societal, variables are
also viewed as determining factors for vulnerability.

3. Vulnerability: some concepts (2)
• According to Gilberto Gallopin (2007) vulnerability is the propensity of a system
to suffer significant transformations as a consequence of its interaction with
external or internal processes or events
• Briguglio (1995) interpreted vulnerability as fragility and lack of resilience in the
face of outside forces
• Wratten (1994) defined vulnerability as a state of defenselessness, insecurity
and exposure to risk, shocks and stress
• Moser (1996), vulnerability can be evaluated in relation to risks associated with
prospective changes in the well being of individuals, households or communities
in the face of a changing environment. Vulnerability is a function, not only of the
threats to resisting but also the threats to recovering in response to the
negative effects associated with the different categories of environmental
changes

4. Vulnerability: some concepts (3)
• The concept of vulnerability captures a complex and dynamic reality. Besides
referring to the possibility that something is negatively affected by something
(a hazard or stress), vulnerability is also a relative property defining the
capacity to cope with that stressor as well. Therefore, vulnerability cannot be
defined by the hazard alone, nor can it be represented by strictly by internal
properties of the system being stressed. It must be looked at as an interaction
of these factors and includes three elements: exposure, sensitivity and
capacity to adapt (Manuel-Navarrete et al., 2007, Ionescu et al., 2008).
• Vulnerability is a multidimensional term that implies a potential for loss from
exposure to causal factors such as biophysical, socio-economic, political and
environmental risks and hazards (Cutter, 1996)

5. Adaptive capacity
• In biological systems, adaptability means the capacity to adapt to a range of
environmental contingencies, or to make the alteration or adjustment that will enable
a species, population, or individual improve its condition in relationship to its
environment (Dobzhansky)
• A system with more adaptive capacity will tend to be less vulnerable
• It is the ability of a system to evolve in order to accommodate hazards or, in the case
of societies, introduce policy changes to expand the range of variability with which it
can cope
• The ability of institutions and networks to learn, and store knowledge and experience
• Creative flexibility in decision making and problem solving
• The IPCC defines adaptability (or adaptive capacity) as the ability of a system to adjust
to climate change to moderate potential damages, to take advantage of opportunities,
or to cope with the consequences

6. Resilience: some concepts (1)
• The concept of resilience describes a system’s capacity to absorb shocks and
disturbances in order to continue existing with as little damage as possible
(Birkmann et al. 2011)
• Folke (2006) proposes understanding resilience as a process rather than a state
and thus he argues for a consideration of processes of adaptation, learning,
and innovation
• IPCC (Intergovernmental Panel on Climate Change) defines resilience as the
ability of a system and its component parts to anticipate, absorb,
accommodate, or recover from the effects of a hazardous event in a timely
and efficient manner
• (Gallopin, 2007) It is the amount of change a system can undergo and still
remain within the same domain of attraction extended to recovery and
reorganization after deep transformations, the capacity to adapt to changes
and generate novelty

7. Resilience: some concepts (2)
• Resilience signifies the successful adaptation of societies to natural hazards,
one that may help to avoid or compensate for damages and functional
impairments. Resilience is understood as an adaptation strategy which is
developed by societies upon the basis of vulnerability assessments
• Resilience signifies the successful adaptation of societies to natural hazards,
one that may help to avoid or compensate for damages and functional
impairments.
• Resilience is linked to dynamics of social systems such as adaptability and
transformability, capacity to recover and degree of preparedness
• Resilience it is the ability to deal with adverse changes and shocks
• Resilience is related to the capacity of response

8. Resilience: some concepts (3)
Resilience is the ability of a social system to respond and recover from disasters
• Includes the ability of the system to absorb impacts
• Includes coping with the event as well as post-event adaptive response
• Facilitates the system’s ability to reorganize, change, and learn
• Three dimensions of resilience:
I. resistance of a system with regards to shocks, or towards gradual changes
II. capacity to restore original conditions relatively quickly
III. capacity of system to learn and adapt in changing contexts

9. According Christophe Béné et al.

10. Relationships between resilience, vulnerability, and adaptive capacity
found in the literature

11. • Contrary to conventional interpretations, vulnerability should not necessarily
be seen as inherently negative. Similarly, resilience should not simply be
understood as an inherently positive thing
• Vulnerability may provide opportunities for necessary developmental, while
resilience structures may have negative outcomes. They might, for example,
have unintended effects that create problems if they disregard alternative
solutions or if they increase the power of particular individuals
• Good Resilience is the ability of a system to accommodate positively adverse
changes and shocks, simultaneously at different scales and with
consideration of all the different components and agents of the system,
through the complementarities of its absorptive, adaptive and transformative
capacities

12. The origin of the concepts in natural systems
makes them inadequate, particularly if it is
uncritically transferred to social phenomena,
precisely because human systems embody
power relations and do not involve analogies
of being self-regulating or rational

13. Vulnerability and Small States
• Whereas the lack of power was considered the key variable of small states in
the nineteenth and up to the mid-twentieth centuries, a broader concept of
vulnerability was advanced in the 1980s
• During the mid-1980s, vulnerability was popularized and gained attention as
a result of deliberations at a Conference on Small States held in Malta
• Vulnerability discourses appear to present small states as a ‘problem’ to be
‘solved’, thus detracting attention away from the existence of unequal power
structures that, far from being the ‘natural’ result of smallness, are in fact
contingent and politically contested
• Today vulnerability is more link to a condition that can be transformed
though policy initiatives

14. • Streeten (1993) suggest that small states may be more
flexible and resilient in the face of adverse effects
• Easterly and Kraay (2004) also expressed an optimistic note
with regard particularly to SIDS, stating that they on
average have higher productivity levels, lower infant
mortality, higher educational attainment, and higher life
expectancy when compared to larger states

15. How are small states vulnerable?
Why are they vulnerable?
• Security threats
•Geographic vulnerability
•Environmental vulnerability
• Economic vulnerability
• Social vulnerability

16. Economic vulnerability
• Economic vulnerability refers to inherent proneness of an economy to exogenous shocks
• Small states tend to be more economically vulnerable due to the fact that the economies are, to a large
extent, shaped by forces outside their control
• Economies are:
a) Trade opened (high export/GDP because of limited size of the domestic market and to meet import
expenditure)
b) Exposed to trade shocks
c) High import dependence (limited natural resource endowments and inflation)
d) High dependence on strategic imports (food, fuel and industrial supplies)
e) Typically concentrated exports (limited diversification possibilities)
f) High risk of external debt distress, in many cases due to weak exports
g) Volatile government revenues (rely heavily on taxing imports)
h) Significance of remittances
i) Importance of foreign aid
j) Difficulty accessing external capital (private markets tend to see small states as more risky)
k) Non scale diseconomies

17. Economic Resilience
Economic resilience refers to the extent to which an economy can
withstand or bounce back from the negative effects of external shocks.
Economic resilience refers to:
► the ability of an economy to recover quickly following adverse shocks:
shock counteraction
► The ability of an economy to withstand shocks: shock absorption

18. Social vulnerability
• It is the extent to which the social system is able to respond favorably or
unfavorably to the exposure to a sudden shock or event either of an
economic, environmental, or social nature or a combination of those forces,
and the society’s capacity or incapacity to cope with, adopt or adapt to the
impact (Kambon, 2005)
• Social vulnerability becomes a characteristic feature of small states’ social
institutions and systems insofar as they are inherently incapable of fully
responding to threats that could impair their abilities to sustain themselves
and survive (St. Bernard, 2007)
• St. Bernard adopted a SWOT framework in further operationalizing social
vulnerability five sub-national domains include education, health, security,
social order and governance, resources allocation, and communications
architecture

20. Cultural vulnerability?

21. Vulnerability and resilience in small states
http://www.youtube.com/watch?v=kWJMqi8TZhk
https://www.youtube.com/watch?v=7eGFaklqsJc

22. How to build resilience in small states?

23. Policies and institutions
• Macroeconomic policies
• Business climate
• Human capital development
• Economic openness
• Governance
• High infrastructural costs
• High public service and institutional
costs
• High costs of tertiary education and
limited opportunities for high-skilled
employment
• High exposure to natural hazards
• High volatility of GDP
GENERAL POLICIES
 Preferential access and
foreign aid
 Regional and global
insertion finding niches
 Investment in telecom
is vital
 Highly skilled work
force

24. Strategies to overcome vulnerabilities
• Small states viewed by international organizations as a special
category with special handicaps requiring special assistance.
Examples:
a. The UN has created an Office of the High Representative for the
Least Developed Countries, Landlocked Developing Countries,
and Small Island Developing States
b. World Bank and Commonwealth Secretariat constituted a Joint
Task Force

25. But several studies proves that small states have higher
GDP per capita, are better in financial stability, banking
regulation, business regulatory environment, transparency
and corruption, and property rights and rule-based
governance
NEED OF A NEW APPROACH

26. Economic Resilience Index by Briguglio, Cordina, Vella and Farrugia (2006)
• The University of Malta has undertaken research to explain why, in spite of
their vulnerability, some small states like Malta, manage to attain economic
success
• Economic resilience is the “nurtured” ability of an economy to recover from
or adjust to the effects of adverse shocks to which it may be inherently
exposed
• The policy framework that was investigated towards this end was labelled
“resilience building”
• The measurement of such policies was the following components:
► macroeconomic stability;
► microeconomic market efficiency;
► good governance; and
► social development

27. The components
• The macroeconomic stability component of the resilience index proposed in this
study consists of three variables, namely
1. the fiscal deficit to GDP ratio;
2. the sum of the unemployment and inflation rates; and
3. the external debt to GDP ratio
• The market efficiency indicators used related to:
1. the financial market (banking industry is dominated by private firms; foreign banks
are permitted to compete in the market; credit is supplied to the private sector;
and interest rates are in line with the workings of the market)
2. the labor market (high unemployment benefits, dismissal regulations, minimum
wage impositions, centralized wage setting, extensions of union contracts to non-participating
parties and conscription)
3. bureaucratic control of business activities

28. The components
• Governance relates to issues such as rule of law and property rights.
The component covers five sub-components, namely:
1. judicial independence;
2. impartiality of courts;
3. the protection of intellectual property rights;
4. military interference in the rule of law; and
5. political system and the integrity of the legal system
• Social development indicates the extent to which relations within a society are properly
developed, enabling an effective functioning of the economic apparatus without the
hindrance of civil unrest.
• Social development can be measured in a number of ways. The variables chosen for the
resilience index were the education and health indicators utilized to construct the UNDP
Human Development Index.
1. Educational advancement, measured by the adult literacy rate and school enrolment ratios
2. Life expectancy at birth

29. Risk of being harmed by external shocks

30. FOUR COUNTRY SCENARIOS
• On the basis of this methodology, one can propose 4 scenarios into which countries
may be placed according to their vulnerability and resilience characteristics.
• Countries classified as “self-made” are those that take steps to mitigate their inherent
vulnerability by building their economic resilience, thereby reducing the risks
associated with exposure to shocks.
• Countries falling within the “prodigal-son” scenario are those with a relatively low
degree of inherent economic vulnerability but which adopt policies that expose them
to the adverse effects of exogenous shocks.
• The “best-case” scenario applies to countries that are not inherently highly vulnerable
and which at the same time adopt resilience-building policies.
• The “worst-case” scenario refers to countries that are inherently highly vulnerable but
make matters worse by adopting policies that exacerbate the negative effects of their
vulnerability.

32. Results produced by Briguglio et al (2006)

33. Examples of specific domestic policies (building resilience)
• To attract tourism based on weather, scenery, culture and tradition, preferably wealthy tourists,
not mass tourism
• To attract specialized tourism, as eco-tourism and health tourism (health services plus
tourism)
• To increase competitiveness and improving the investment climate:
Low direct taxes to attract investors
To promote lightly regulated niches in various financial services (accusations of becoming havens
for tax evaders and money launderers who assist the operations of drug dealers and terrorists; to
respond to such accusations, they have increased the transparency of their financial operations)
To secure property rights, simplifying the tax regime, enacting appropriate competition
legislation
To design special programs and incentives to promote private sector development and
encourage FDI
To provide an adequate physical infrastructure, enhancing education and health
infrastructure, and improving governance, an adequate infrastructure services is critical to
attracting investment

34. Examples of specific domestic policies (building resilience)
• To overcome limited job opportunities by signing preferential arrangements for migration and
getting profit of remittances
• To ensure the full use of the considerable potential of their diaspora communities is essential to
the success of private sector development
• To host military bases for great powers
• To trade of specific and very much demanded goods (Bhutan sells electricity to India and this is
by far its largest export; Lesotho’s main export is of water to South Africa, Fiji also exports water)
• To participate in niche markets (such as horticulture, exotic fruits and spices and customized
manufacturing)
• To get preferential access and foreign aid due to small/developing status (eroding rapidly)
• Debt swaps for climate change adaptation and mitigation
• Facilitate use of alternative energy to reduce oil dependence
• To promote the knowledge and service-based economies (this development help to mitigate
their high transportation costs, it exploits the small states’ potential competitive advantage in
developing and exporting services based on their human capital)

35. ALLIANCES

36. •Why do states form alliances?
•What are the benefits and costs of alliance and
how are they allocated among their members?
•When do they form alliances?
•Why do alliances dissolve?

37. Alliance: Definitions
• It is agreed alliance is an special tie, disagreements in how formal or explicit
• Alliances can be defined as formal associations of states bound by the mutual
commitment to use military force against non-member states to defend member
states’ integrity (Heinz Gaertner)
• A formulated mutual commitment to contribute military assistance in the event
one of the alliance partner is attacked (Dan Reiter)
• Stefan Bergsmann defines an alliance as an explicit agreement among states in the
realm of national security in which the partners promise mutual assistance in the
form of a substantial contribution of resources in the case of a certain contingency
the arising of which is uncertain
• For Hans Morgenthau alliances are the most important manifestation of the
balance of power (members of alliances have common interests based on the fear
of other states)
• Stephen Walt defines alliances as the result of a “balance of threat”

38. How small states deal with security issues?
• The traditional approach of security which referred to traditional military threats to the
security of states and their national boundaries have been eclipsed by new more
complex security threats
• In the 1980s, Barry Buzan introduced a more broadened definition of security to include
five dimensions: military, political, economic, environmental and societal security
• Especially transnational issues such as terrorism, organized crime, small arms and
nuclear proliferation have become predominant security issues
• Crime, drug trafficking, and youth unemployment have become major issues: they
impose severe costs on the small economies (public security expenditures in police and
justice), discourage private investment and tourism and raise the cost of doing business,
persistent youth unemployment has the potential to severely undermine social
cohesion and create a “lost generation,” which in turn becomes permanent burden on
society

39. Security and Small States
• In the security dimension, small states are most often seen in a passive, reactive, or even
negative light, contributing little to global security and in some cases even acting to destabilize it
• Robert Rothstein: A small power is a state which recognizes that it cannot obtain security primarily
by use of its own capabilities. And it must rely fundamentally on the aid of the others states,
institutions, processes or developments to do so. He claimed small states enter alliances to
enhance their security due to their peculiar security situation
• Olafsson: Weak State Theory focuses on the issue of security and argues that a state’s
independence (and ultimately its statehood) must be questioned if the state is militarily dominated
by another state
• According to the World Watch Institute no single country can achieve its security or safeguard
against threats in isolation, because the world is more interconnected than ever before;
cooperative responses to peace and security are increasingly essential and unavoidable; and
conflict and insecurity often have regional dynamics and contexts
• According to David Singer’s and Volker Krause’s minor powers, given their rather limited
capabilities, may have a strong interest in alliance commitments not only to enhance their
military security but also to obtain a variety of non-military benefits, such as increased trade or
support for domestic political regimes

40. Burning questions for small states
• Can small states be confident that the system would come to their aid in
the eventuality of aggression from outside the alliance?
• Other states in the system, in particular the great powers, might not
consider the threat to a small state or a civil war as a threat worthy of
collective action
• On the other hand, small states might find themselves obligated to
participate in a conflict in which they had no direct interest; this risk has
been called “entrapment”, the logical opposite of “abandonment”
Are small states dragged into the wars of big powers or are they
protected by big powers?

41. Small states are caught in the trap of being ”entrapped” or ”abandoned”
• Allied support often requires minor powers to make
significant autonomy concessions, allowing allies, most
notably major-power allies, to gain influence over their
minor-power alliance partners.
• Alliance ties may reduce minor powers’ diplomatic
flexibility to prevent foreign policy crises from escalating
to all-out warfare while leaving it uncertain whether allies
will honor their pledges of military support in the event of
armed conflict or war.

42. To escape this trap: “neutrality”
• Increasing interdependence: System closure (autarchy and isolation in world
affairs)
• Increasing high external dependence: Selective foreign policy to increase
prestige (membership in international relations) or specialization in certain
products and a diversification of trading partners
• Membership and participation in international governmental organizations is
not only a frequent priority of small states, but it has also been discussed as an
indicator of independence, and as such as a secondary definitional
requirement for small states in particular
• Forum of Small States (FOSS) at UN to serve as a platform for small states
(population of 10 million or below) to exchange ideas on issues of shared
concerns. The grouping comprises 105 of the 193 members of the United
Nations as of now.
https://www.youtube.com/watch?v=vmCofHU5_tQ

43. Regional cooperation and Small States
• With other small states or with larger neighboring states
• Main purposes: health and disease control, higher education, secondary
school examinations, environmental protection, fisheries protection,
regulation and enforcement, air traffic control, utility regulation,
procurement of regional air and shipping services, preparing model
legislation, cross-border crime prevention, international negotiations,
foreign representation, and cultural and investment promotions
• Enhanced regional cooperation is needed not only to better provide for
domestic needs, but also to increase engagement with a globalizing
world
https://www.youtube.com/watch?v=Abf8iF72wRM

44. Regional cooperation in the Caribbean
(Organization of Eastern Caribbean States )
• The Eastern Caribbean Telecommunication Authority (ECTEL) is an exciting cooperative
model. The increase in network capacity and competition generated by these reforms
has led to a considerable drop in prices for most services; the costs of calls to the US
have been reduced by more than 70 percent, and service quality has shown a marked
improvement.
https://www.youtube.com/watch?v=mR0q9OwPuMs
• The Eastern Caribbean Central Bank (ECCB) is good example of regional cooperation.
The ECCB has played a key role in developing the financial sector of the OECS countries
primarily through the maintenance of monetary stability, protection of the safety and
soundness of the local banking institutions, and capital market development
• The OECS Pharmaceutical Procurement Service
• Alliances to overcome scale diseconomies (education): University of the South Pacific;
University of West Indies; Small Island States University Consortium(UC-SIS) involving
the Universities of Malta, Mauritius, West Indies, and the Virgin Islands

45. Bibliography
• Swaminathan S. Anklesaria Aiyar, Small States: Not Handicapped and Under-
Aided, but Advantaged and Over-Aided
• Lino Briguglio et al., Toward an Outward-Oriented Development Strategy for
Small States: Issues, Opportunities, and Resilience Building. A Review of the
Small States Agenda Proposed in the Commonwealth/World Bank Joint Task
Force Report of April 2000, August 8, 2006
• Lino Briguglio et al., Economic Vulnerability and Resilience: Concepts and
Measurements, Research Paper No. 2008/55, May, 2008
• Godfrey St. Bernard, Measuring social vulnerability in Caribbean states, 8th
SALISES Annual Conference Crisis, Chaos and Change: Caribbean Development
Challenges in the 21st Century, March, 2007
• Robert O. Keohane, Lilliputians' Dilemmas: Small States in International Politics