- 1 Britain was the pre-eminent global maritime power for decades, but it does not qualify as a small s (...)
- 2 As at October 2013, there are 29 small island states with a resident population of up to 1 million. (...)
- 3 But note that this nomenclature is subject to political opportunism. The 38 SIDS that are UN member (...)
1While the notion of a small state is an old one, and most jurisdictions have been small for much of record history, very few of these are known to have been islands or island clusters. The exceptions have been places like Venice, Crete and Tonga, which were island-based maritime powers in their respective regions1. And so, practically all small islands entered the 20th century as appendages to larger political blocks. The notion of a sovereign small island state is a very recent development. Iceland was the pioneer, securing its independence from Nazi-occupied Denmark in 1944, and became the first of three dozen independent post-colonial island nations with populations of less than five million, and with most having populations below even the one million mark2. Iceland remains very much the exception of this family of small island states, being to this day the world’s only cold water island state; while all the others are located in temperate or tropical zones. Most of these small island states secured independence following a long period of colonialism, and they have been thus categorized by the international community as small island developing states (SIDS)3. Meanwhile, around one hundred sub-national island jurisdictions (SNIJs) persist as lingering fragments of empire (Bermuda, Falklands, St Pierre et Miquelon); special components of larger states (Åland, American Samoa, Channel Islands, Cook Islands, Isle of Man, Jeju); or as island members of continental federated states (Hawai'i, Prince Edward Island, Tasmania). Enjoying varying levels of autonomy and self-determination; a few of these island jurisdictions may yet become independent (Baldacchino, 2009).
2But only four small island territories have actually secured full sovereignty since Brunei on 1st January 1984 (these countries include East Timor, independent since 2002, and whose resident population has exceeded 1 million since 2006, should we wish to include that case; the other three cases are discussed below). This factual observation merits some careful scrutiny, since there is neither a shortage of candidates, nor a reticence from the lingering colonial powers – particularly Denmark, the Netherlands, and the United Kingdom – to judge this motley set of candidates as fit to graduate to sovereignty. Indeed, a comparative quantitative analysis would reveal that SIDS exhibit better economic indicators than larger developing states (e.g. Anklesaria Aiyar, 2008; Easterly and Kraay, 2000; Armstrong et al., 1998); while SNIJs are more economically developed, socially advanced and demographically progressive than independent small island states. McElroy and Pearce (2006) suggest that this differential performance is perhaps best encapsulated in the disparate migration experiences characteristic of the two distinct small island profiles. On the one hand, the average independent island state is typically a society experiencing slow economic growth, labour surplus and chronic emigration. On the other hand, the average SNIJ is typically an immigrant society that benefits from being attached to what is typically a larger and richer metropolitan power.
3This paper reviews the literature on the economic development of small island states, using the economic situation of sub-national island jurisdictions as a valuable, comparative backdrop. It examines cursorily, given the necessary brevity of a journal article, how most small island states continue to impress with a wily and adroit commercialization of ‘resources’ that simply boggle the mind. These include bilateral and multilateral aid, offshore banking and financial services, the receipt of remittances, the sale of citizenship, internet domains, philately¸ generic drugs, aggressively place branded food and drink, plus various rent-driven geostrategic services (tourism, second home residences, tele-communications infrastructure, military bases, detention facilities, trans-shipment depots …). With such revenue-generating schemes already in place by the early 1990s, one observer could not help but describe them as ‘pseudo-development strategies’ (Baldacchino, 1993): it was a scramble to exploit one niche or opportunity, then another, moving as nimbly as possible from one to the next, or from one crisis to the next, as one dries up and (hopefully) another presents itself (Baldacchino, 2009; Guillaumont, 2010). There was no elegant progression, no evolution of economic capacity, no macro-level diversification, no hoped-for economic viability, as may have been envisaged by industrialisation-led development models. Input-output Leontieff tables were largely composed of empty cells. With very few exceptions, all industrialization strategies in small island states have failed. And even amongst the few exceptions – Barbados, Fiji, Malta, Mauritius – any success has been short-lived. Generic environmental, economic, and social problems ensue from a dependence on producing a narrow range of cash crops – the typical suspects being banana, cocoa, coffee, copra, ginger, guano, sugar, tobacco and vanilla – for sale in the world economy, plus out-migration and remittances, and foreign aid. For many small island states, opportunities for development are typically regarded as minimal because of fragile ecosystems and a shortage of land, fresh water, and local energy supplies (e.g. Macpherson, 2000). These were not just Lilliputian actors on the world stage; they were minnows who defied the logic of economic development, and transitioned as best they could from one calamity to another, often with very limited formal private sector activity; hardly a recipe for ‘sustainable development’ (Bertram, 1986). They eked an existence as MIRAB economies, also called MIRAGE economies: MIgration, which fuels Remittances; and Aid which supports Government Expenditure (or Employment, surviving on state-to-state aid transfers, and private household-to-household remittance transfers (Connell, 1991). Was this existential bubble about to burst?
4Small island states were met with considerable scepticism by the established great powers in the post-Second World War and Cold War epochs; their presumed economic viability was clearly in doubt, and their naiveté in messing up the global and high-stakes superpower game was of concern (Keohane, 1969; Plischke, 1977). Meanwhile, given their sheer numbers on the world stage, and especially at the United Nations and a number of its agencies, small island states received collective recognition (as SIDS): they secured their own version of the 1992 ‘Agenda 21’ Rio Summit and aftermaths (in Barbados in 1994, Mauritius in 2005, and soon again in Samoa in 2014); and enhanced their global visibility in the context of climate change debates, thanks to the setting up and lobbying of the 39-full-member Alliance of Small and Island States (AOSIS) as from 1991, and so well documented at, for example, the COP 15 meeting in Copenhagen in 2009. Particularly, the tone of such historical commentary, championed by such agencies as the UNDP and the Commonwealth Secretariat, has been one of a chronic vulnerability and fragility predicated on islandness and small scale, somewhat toned down later with some token recognition of agency, resilience, capacity building and otherwise good governance as the suitable human and institutional response to such a structural, chronic and irrevocable weakness. “Descriptions of islands as fragile, small, peripheral and dependent are often taken for granted, reiterated within a discourse of ‘vulnerability’” (Amoamo, 2011: 69).
5It is very easy to accept the mantra of small island state vulnerability: an unavoidable openness to all things external (markets, prices, investments, tourists, financiers, environmental hazards, military invasions, epidemics, and now global warming) renders such small island jurisdictions inherently fragile and highly elastic, liable to large, dizzy oscillations of economic fortune and collapse. There are no cushions, no robust economic differentiation, no economies of scale, no physical, economic or psychological hinterland, to absorb any such shocks. Any economic graph would show dizzy ups and downs, phenomenally steep booms and troughs, often traceable to discrete events: the purchase of a ship; the closure of a military base (e.g. Carse, 1998). Their higher per capita economic indicators were illusory; they could plummet overnight with the arrival of a hurricane, a bad harvest, or the departure of a major investment. The records for the highest and lowest per capita income enjoyed by any sovereign state in the world are held by the same, small island state: Nauru (Gowdy and McDaniel, 1999; Connell, 2006a).
6The deficit and belittling discourse surrounding the representation of such islands – and their citizens – lends credence to these enduring negative tropes. Small island states have been summarily "aestheticised, sanitised and anaesthetised" (after Connell, 2003: 568), weighed down by the multiple baggages of paradise (an unspoilt Eden waiting to be discovered and consumed), exoticity (a sensuous and lush natural and human garden that effuses pleasure) but also alarmism and fragility (high-risk environments, with fickle livelihoods, so handle with care): seemingly contradictory, yet all deemed necessary to fulfil the promise of tourism for visitors, and to instruct donors about the deceptive basis of any local economic wealth. Small island states suffer – just as they do on maps – the imperial arrogance and paternalism of those who would either neglect them – the tyranny of exclusion – or else paint them in bizarre stereotypical hues – the tyranny of the inset. All too often, one is here faced with a situation where the subject matter – the island, the islander, the islanders – becomes object matter: a “looked at” reference group; stages for the enactment of processes dictated from elsewhere; mere props of various dei ex machina, Gullivers landing in Lilliput and becoming self-appointed experts on domestic affairs (Warrington, 1998). These would have been mainly explorers, missionaries, traders or colonial administrators in the past, but have now been replaced by consultants, economists and journalists in more recent years, and now climatologists (Baldacchino, 2008: 38-39). In a recent book that reviews island environments and economies, the reader can be quite overwhelmed by the continuous assault of negative language on the senses, whether in the form of dramatic action nouns (collapses, catastrophes, departures, eruptions, extinctions, extirpations, hazards, insecurities, threats, uncertainties), or in the form of adjectives (absent, corrupt, lacking, powerless, unsustainable, vulnerable, weak). No fault of the author: all these words are lifted from the titles of the books, reports and articles listed in the reference section (Connell, 2013).
- 4 The official script in the Maldives has now changed. The current President is arguing that the isla (...)
7The hyperbole may have got even worse of late, with the looming doomsday scenarios exacerbated by the effects of sea level rise. Drownings, disappearances and sinkings have been added to the litany of woes. A sinister, hedonistic and bizarre dark tourism marketing has proliferated, encouraging visitors to visit places like the Maldives before they cannot be visited any more: “So come here fast, before it disappears. This is a paradise faced with extinction”, proposes a BBC journalist, for example (Bryant, 2004); in the process, long-haul tourists contribute to the same greenhouse gases that are causing the waters to expand and rise. This is victimisation writ large: small, fragile islanders facing the inexorable impact of ‘development’: not so much their own, but that of the developed world and the industrialising countries with their high carbon footprints. The locals are not always amused (e.g. Farbotko, 2010, on Tuvalu); and the current near-obsession with ‘sustainable development’ and its focus on a liveable ‘future’ does not always pay adequate attention to what may be more pressing issues for a liveable present4.
8Yet, such states, and their communities, continue to survive. Yes, these small island economies seem to be bobbing up and down, not moving forward. But nor are they moving back, lapsing to some kind of doomsday scenario. The development bubble has not burst; well not yet. Even tiny Pitcairn, the world’s smallest jurisdiction – with a population of 51, at the last count – and which has been expected to fold up some years back (Connell, 1988; Winchester, 1985: 345) – is still in business, and is now contemplating a niche tourism industry (Amoamo, 2013) and will soon usher in the world’s largest marine park (The Economist, 2013a).
9Generalizations are odious, and I do so at my peril. However, small island states appear to survive in the 21st century mainly because of a combination of factors that can be still described as ‘pseudo-development’ strategies that nevertheless generate revenue and support livelihoods. Small island states have shied away from a commitment to industrialisation, with only Fiji, Malta and Mauritius having some success there; while others have tried to lure foreign industrial capital but only managed to do so for a limited time, at best. Instead, they have found themselves pursuing some very different alternative development routes. These include: (1) heavy international out-migration, often circular or cyclical, which supports sustained remittance transfers (increasingly important as aid has fallen to record historic lows); (2) rich and vibrant, subsistence and non-cash economies; (3) the export of niche products, including some manufactures, that secure high value added; (4) tourism, in its various forms; and (5) other ‘geostrategic rents’ and including offshore finance, in spite of the strong attacks this sector has faced of late from the governments of cash-and tax-starved, developed countries. Overall, we are talking about a deployment of what Foucault (1991a) calls ‘governmentality’ in the judicious management of extra territorial opportunities (Baldacchino, 2012). By this we mean a ‘strategy game’ by which small island states play out their international relations, especially with respect to one particular, larger and richer country (typically, their current or former colonial power, and/or the regional hegemon) and to the federal and regional entities and agreements of which they form part. Small island states (as well as subnational island jurisdictions) are, in this context, both victims and actors of these “procedures, techniques and methods” (Foucault, 1991b: 75). Different spaces are constituted as policy fields, and different agents and target groups assembled as amenable to being “worked on”. Thus, even a mini-jurisdiction like Pitcairn has been able to survive, mainly by its successful claims and overtures – what Foucault would define as ‘bio-politics’ – to British taxpayers, American stamp collectors and Filipino sailors: “the only cash economy of Pitcairn is the sale of stamps and the sale of handicrafts to passing ships” (Ridgell, 1995:149).
10Let us now move from theory and rhetoric to actual examples.
11Intra-national or international emigration often becomes the response to the gamut of economic vulnerabilities faced by small islands; labour becomes the ‘monocrop’ to be exported to the global market, possibly replacing cash crops (e.g. Schneider and Schneider, 1976). For the world’s smaller islands, the end-result is often a ‘MIRAB’ economic model where islanders survive thanks to the remittances transferred by emigrants from abroad and the state aid flows which support the domestic public bureaucracy (Bertram and Watters, 1985; Bertram, 2006; Bertram and Poirine, 2007).
12Moreover, high population density and its strain on finite resources (land, water, beaches, energy) along with the intense psycho-social atmosphere where everybody may know everybody else, may reach a tipping point, aligning elements of the local population to consider or crave emigration, for work, education or just freedom and adventure (Connell, 2007; King, 2009: 58). Most islands would today have a diaspora more numerous than the resident population. Many first-generation emigrants would maintain close ties with their island of birth, especially the family they left behind. They send substantial remittances, write letters and emails, phone and skype, send gift packages and visit as frequently as possible (Connell and King, 1999). These migrants are therefore very much socially present in these island societies, being part of wide-ranging fields of relations and investments that extend from islands of origin to overseas migration destinations. From a social and economic point of view, therefore, island territories should not be viewed as isolated archipelagos surrounded by the sea, but rather as critical anchors in vast webs of relations linking migrant and local islanders. These webs are flexible, resilient and adaptive, being based on personal interrelationships of loyalty and obligation towards close kin, yet also premised on the somewhat contradictory feelings of strong emotional attachments to island homes on the part of migrants and equally strong desires to explore global opportunities on the part of those left behind. For many generations, this sea of relationships has made small islands what they are, and it is likely to continue to do so in the future (Olwig, 1993). Return migration may cushion the long-term demographic and economic decline somewhat, but much depends on the age of the returnees, the financial and human capital they bring back and what they earmark it for (King, 2009: 58). With low cost airlines and dual citizenship, cyclical or circular migration is now increasingly common, as individuals try to strategically exploit the best of multiple worlds for themselves and their dependents (e.g. Baldacchino, 2006).
13Given the obvious absence of economies of scale, small islander behaviour is often grounded in economies of scope; and the flexible and opportunist operation in monetized, non-monetized, public and intermediate (grey) economies, both local and foreign, for economic gain.
14Consider, for example, Isaac Caines, from the Caribbean island state of St Kitts-Nevis (profiled in Richardson, 1983: 54-5); Kawagl, from the Melanesian South Pacific (profiled in Brookfield, 1972: 167-8); and Marshy, a street vendor from Kingston, Jamaica (profiled in Wardle, 2002). Each of the three has a broad skill set, yet would focus on a particular set of tasks at any point in time. Moreover, when looked at longitudinally, each of these individuals demonstrates an uncanny skill repertoire in the economies and temporalities of scope (as against scale), which include entrepreneurship, flexible specialisation, public sector employment, and stints abroad. “Flexible specialisation” (e.g. Poon, 1990) and “multi-functionality” (e.g. Farrugia and Attard, 1989) are the key attributes of small, island economies as much as of their constituent citizens, households and firms (Baldacchino, 2001; Bertram and Poirine, 2007: 368; Schmitz, 1989). As Carnegie (1982: 12) observes:
“Even people with very secure jobs often have part-time occupations or get training in other trades to develop other marketable skills. One friend in St Lucia who has been with a particular public service department for about 14 years, and held a middle level position in the department, also had a steady extra income from furniture upholstering. During the time that I knew him, he was also taking an accredited course in welding, and wanted to learn refrigerator repairs as well. He was also looking for opportunities to go abroad to study agronomy… It is commonplace to have several sources of income and systematically to maintain each one, even if some may bring in very little cash.”
15Thus, individuals, households or business units strategically spread their risks, not in spite, but because of the small economy’s overall macro-dependence on one or a few, exogenous sources of income. Any synchronic ‘snapshot’ might easily suggest a precariously specialised economy; however, a diachronic ‘video’ would reveal a more dynamic and diversified portfolio, with considerable articulations between formal and informal (including non-monetized) activity.
16As a case in point, mull over the economic yo-yoing of the Caribbean island state of St Lucia, set up as a plantation economy following European discovery. Sugar drove the plantation economy for many decades; but was eclipsed by coal (1990-1930); which was in turn overtaken by bananas during the 1960s; tourism then surpassed the banana ‘green gold’ in revenue in 1993 (e.g. Ellis, 2005). With each (often dramatic) ebb of a specific leading sector and the emergence of another, the socio-economy suffers painful dislocation: unemployment and relative poverty set in amongst the losers who are bound to fight against the change of fortune but who – unless the state succumbs to their protectionist demands - are likely to eventually adapt or negotiate an honourable exit strategy: to draw on social or state supports; switch to what is perceived as the next winning horse; and, as is also typical amongst small islanders, opt for exi(s)le (Bongie, 1998) or a stint overseas.
17The next cluster of examples relates to products whose essential raw materials are typically sourced locally, and therefore lend themselves to some clever branding that aligns the product to the island where it is made, and to the tropes surrounding that island. sourcing locally available ingredients – ranging from fruit, glass, grain, leather, sand, shell, skin, stone, vegetables, wood, wool, even the waste products of other industries, such as agriculture and fisheries – means that such material is both less costly to secure (does not have to be imported, unlike much of everything else) and is more naturally aligned with the island brand and its evocations. Moreover, once this provenance is well-defined, the final product – which could consist in just the raw material itself - can be addressed to specific niche markets where it could command a higher price and a narrower clientele (including the island diaspora) which it could service adequately. “These [specialized niche] markets are based on differentiation, not cost/price; smaller producers with relatively, high costs can be competitive, and sales of small numbers at high margins can be profitable”(Punnett and Morrison, 2006: 351).
18Iceland’s long and proud association with the sea, its fisheries industry, and its maritime culture promote the branding of Iceland as a reliable provider of fish or marine related products and derivatives, as are the omega-3 marine oil products of Lysi. Moreover, the tourism industry in Iceland is also showing off its product as a unique destination with very high standards of natural beauty, purity, cleanliness, and general good health, all of which are useful sales pitches to Lysi’s health-related products. Similarly, Malta’s tourism profile is heavily themed with notions of a hardworking and flexi-skilled Mediterranean race; the skill involved in developing the decorative ware of Mdina Glass is thus a way of congealing in time both contemporary labour as well as its historical past, as are other products, such as gold and silver filigree or hand-crafted decorative lace (Baldacchino, 2005). Well-branded Barbados rum products - like Mount Gay - are more than a drink: they are a concept and a life style; and this is clearly associated with the favourable, Caribbean ‘fun and frolic’ sense of islandness that is attached to them, and which is key to a successful enhancement of these brands and their competitiveness (Pounder, 2006). Fiji Water is the second best-selling bottled water in the US, after Evian (Connell, 2006b). The Comoros is the world’s leading producer of ylang-ylang (Cananga odorata), much of it finding its way to the fragrance Chanel No 5, “the world’s most famous perfume” (Mazzeo, 2011). Cultured pearls from the black-lipped pearl oyster (Pinctada margaritifera) have been important sources of export revenue in various island jurisdictions, especially in the Pacific. Pearl farming can stem outer-island emigration, and can provide critical economic alternatives. In the Federated States of Micronesia, pearl farming now complements the lost income that artisanal reef fishing communities have to incur with the introduction of no-fishing zones and marine protected areas. This new source of income has created an incentive for conservation by reducing pressure on reef fish stocks, and it is increasing the resilience of these communities in the face of climate change (Cartier et al., 2012). Locally produced beers from many small island states – from Samoa’s Vailima (now owned by the Coca-Cola company) to Kalik in the Bahamas (owned by Heineken) – could easily represent the largest (or sole) locally-owned manufacturing capacity in these jurisdictions, and typically peddle an explicit affiliation with the island locality; they are sought after by locals, tourists and the island diaspora (Baldacchino, 2010). In Fiji, small-scale farmers have contributed to the exports of kava: the dried root of the pepper plant (Piper methysticum forster) from which a slightly narcotic and anaesthetic drink can be concocted; the product is increasingly used for medicinal purposes on a commercial scale. This venture has had positive benefits on farmer livelihoods (Prasad and Raj, 2006).
19Another economic cluster relates to tourism: now one of the world’s largest and still growing industries, and an obvious attraction to Small Island States that can flaunt their sea, sun and sand credentials. It is claimed that tourism “offers the best chance for development in terms of creating growth and employment, generating foreign exchange and reducing poverty” (Croes, 2006: 455). So pervasive and dominant has tourism become that one of three general classifications of island economies has been called SITEs: Small Island Tourist Economies (McElroy and Hamma, 2010). And yet, the industry is highly sensitive to perceptions and acts of unrest and of shifts in investment flows; landscapes can be transformed and eroded with the arrival of many guests; and local tourism may ironically depend on wide-ranging imports that span from furniture to food and expatriate management: in such cases, the local economy may largely benefit from a range of low-skilled service jobs. Then there is competition: island destinations have sought to move away from a bland and generic coastal resort appeal – and its tough, cut-throat prices – that fails to distinguish one ‘sun, sand and sea’ jurisdiction from another, leaving them at the mercy of travel agents and low-cost airlines. Eco-tourism in Dominica and the Seychelles, scuba diving in Malta and the Maldives, music tourism in Cape Verde, cultural tourism in the Marshall Islands, festival tourism in the Bahamas, meetings and conventions tourism in Trinidad and Tobago, and medical tourism in Barbados, are just some of the strategies resorted to by small island states in order to rise above the noise of the competition, and also move up the value chain (e.g. Lewis-Cameron and Roberts, 2010).
20Another cluster of economic activity relates to geo-strategic economic rents: revenue that accrues from the purchase or rent of property, facilities or natural assets that secure consumer appeal largely by virtue of their geographic location (e.g. Bertram and Poirine, 2007). Tourism is, in a way, one such industry; but has become so rampant and sophisticated to warrant its separate entry here. But additional rent-generating activity includes second home properties; military bases; detention centres; refuelling stations; fishing licenses; shipping registries, communication facilities; test installations; transhipment sites; low tax regimes; and internet domain names. In all these and similar services, extra-territorial clients use the island’s location, and its territorial integrity as a sovereign jurisdiction, to ‘park’ assets: industrial or technological facilities, trawlers, ships, immigrants, military materiel, trendy business addresses or corporate finance. Even in a post-cold war world, the maintenance of military bases in various parts of the world, particularly for the United States, has been scaled back but remains impressive: where small island states are concerned, this is especially so in the Middle East (with extensive US facilities in Bahrain) and the Western Pacific (where the US has the right to operate military bases in Palau, Marshall Islands and the Federated States of Micronesia). Three per cent of the land area of Cyprus consists of British Sovereign Bases; while Turkey maintains a military presence in North Cyprus. Over the course of a decade after the Second World War, the US conducted scores of nuclear tests on the Bikini and Enewetak atolls, in the Marshall Islands: Bikini and neighbouring Rongelap remain uninhabitable (The Economist, 2013b; DeLoughrey, 2013). Tuvalu secures considerable revenue by selling the use of its dot tv top-level internet domain: the Tuvalu government receives a quarterly payment of US$1 million for such use (Tasner, 2010; Wilson, 2001). Nauru now runs a detention centre for undocumented migrants and asylum seekers caught in Australian waters; this centre provides one-fifth of all employment on that island country (Hasmath and McKenzie, 2013). Some island states provide ‘flags of convenience’: the Marshall Islands boasts the world’s third largest ship registry, run out of Reston, Virginia, USA (Palan, 2003: 53); the Bahamas, Cyprus, Malta, Vanuatu and São Tomé y Príncipe are also involved in this business (Baldacchino, 2010: 6; Connell, 2013: 113; Kelman, 2011). Differently contentious is the operation of “offshore” finance centres: regimes offering a sophisticated range of ‘products’ that often involve rates of tax lower than what would be incurred should the capital remain domiciled. The industry has been vilified as unjust by virtie of cheating states of precious tax revenues and jeopardising welfare systems (e.g. Hampton and Christensen, 2002). Whereas island jurisdictions retort that there is no morality in the market and that they are merely exploiting one of their very few current competitive advantages (e.g. Cobb, 2001; Rose and Spiegel, 2007).
21These sets of activities have been taking over more traditional, subsistence farming and fishing as well as colonial economic activity that was organized around mining or mono-plantation agriculture. Lucrative fish or marine species – from cod in the North Atlantic to sea cucumber in the Pacific – have been hunted to near extinction (e.g. Kurlansky, 2011). Islands as plantation economies – first involving tobacco but then mainly sugar as the key cash crop – was very profitably pursued with the indiscriminate use of slave and indentured labour, and while Europe had a huge craving for all things sweet (e.g. Mintz, 1985; Strachan, 2002). More recent large-scale agricultural production, as in bananas for Grenada, Dominica, St Lucia and St Vincent, benefited from trade protectionism with privileged access to European Union markets; but eventually had to give way to a more neo-liberal WTO-driven trade regime that rewarded more efficient producers from larger states (Mlachila et al., 2010). Copra production has likewise disappeared from most of the Federated States of Micronesia, the Marshall Islands, Tonga and Tuvalu (Connell, 2013: 63).
22Of course there are problems and challenges with these ‘pseudo-development strategies’ Success in exported products and manufactures can breed failure when growth is unmanaged, quality is not guaranteed, and domestic product regulation remains inexistent or lax. Customer loyalty to specific place-based (and more expensive) commodities needs to be earned, and then maintained. Local companies may fly under the radar of the big corporate players but, once successful, they can attract attention, and eventually can get bought out by the stronger competition. A successful firm could also encourage other local service providers to enter the field, quickly saturating the small local market and threatening both quality and profitability. And some activities are verging on the criminal and illegal: interested in a passport from Tonga, Samoa, the Marshall Islands, Vanuatu or Nauru (van Fossen, 2007)? When does offshore banking become money laundering (e.g. Hampton and Levi, 1999)? When does a flag of convenience become a euphemism for clandestine arms trafficking (e.g. Sydney Morning Herald, 2003)?
23Small island state governments have sought to rebut such accusations. But, the greatest challenge of all remains the fact that success depends on extra-territorial take-up, be this made up of governments, tourists, investors, consumers or a combination of these. Should things change in the sending country – a change in defence, marine, taxation, migration or detention policy, for example – the source of revenue can disappear, and can do so quite suddenly too. Indeed, this is the very same argument making the case for the structural vulnerability of small island states. Openness is a double-edged sword:
“Small states, particularly island ones, tend to be more economically vulnerable than other groups of countries, due mostly to a high degree of economic openness and a high degree of export concentration. These lead to exposure to exogenous shocks, which could constitute a disadvantage to economic development by magnifying the element of risk in growth processes” (Briguglio et al., 2006: 1; also Briguglio, 1995.)
“Hyper-specialisation, openness, reliance upon external sources of finance, living with cycles of volatility, all go with the territory and do not in themselves carry any necessary connotation of weakness, fragility, or vulnerability … Paradoxically, the often-cited openness to international trade (one of the key components of the vulnerability index), with its associated volatility, is a source of strength rather than weakness for small economies, obliging them to be internationally competitive on open markets and preventing them from collapsing into anarchy or protectionism on economic terms” (Baldacchino, 2009, passim).
25Many small jurisdictions have deployed their regulatory powers to facilitate favourable trans-border activity: enacting laws and regulations intended and aimed exclusively at individuals and institutions located beyond their borders (Conrad, 1973: 633, my emphasis; also Alesina and Spolaore, 2003; Armstrong and Read, 2004: 214, 217-8). Small island states, some more than others, have managed to compensate effectively for their small size by “optimal endogenous policy formulation and implementation” and via a successful “international political economy” (Armstrong and Read, 1998: 13). Beyond public policy considerations, small entrepôt economies remain prone to such additional contingencies as regional wars, natural disasters, accidents, security threats, epidemics, tourism consumer shifts, market shocks or technological obsolescence. Lacking a hinterland under their own control, these states cannot count on the material, fiscal, food or even human resource reserves available to larger countries; and yet, paradoxically, they must tap these pools to survive: even Singapore, with its solid reputation as a robust and successful economy, needs to negotiate with neighbouring Malaysia for its water requirements (Sprake et al., 2004).
26Perhaps this is why, ultimately, many small subnational island jurisdictions have decided not to graduate to full sovereignty. If survival depends on trans-border activity, then is it not easier to access, secure and consolidate such a flow by operating from inside a larger, wealthier state, rather than from outside? True: the status of a distinct sovereign state may be notionally more prestigious and dignified – with the flag, UN seat and head of state that accompanies sovereignty - yet, could it not be economically much more dubious and fickle (Baldacchino, 2009)?
27Would this rationale explain why so many candidates for sovereignty have opted not to take the step to full independence over the past 40 years? And if that is so, then what has changed since the 1980s to warrant such a hesitation? Or, to reverse the question, “Given the significant and long-lasting material advantage of non-sovereign over sovereign islands, why would so many of the latter have opted for independence prior to 1984?” (McElroy and Parry, 2012: 418). It is probably not just that the rhetoric of self-determination and sovereignty has worn off from the heydays of decolonization of the late 1950s and mid-1960s. More significantly, neo-liberalism and an enhanced cross-boundary openness to trade and finance capital flows may have significantly improved the economic fortunes of sub-national jurisdictions, particularly in terms of revenues from tourism and offshore finance, spectacularly transforming these spaces from the policy-neglected, labour-sending and remittance-fuelled societies of just a few decades ago. For example, Bertram and Poirine (2007: 334-335) recount the transition of the Cayman Islands from its dependence on remittances from off-island seafaring labour in the early 1960s, to the sophisticated tourism destination, in-migration hub and offshore financial centre it has become.
28A closer look at the three small island states that secured independence since 1984 – the Federated States of Micronesia, Marshall Islands, and Palau – is instructive at this point. These three Pacific states have secured a status of independence in principle – all three are full members of the United Nations – and yet, they are “hybrid jurisdictions” (Levine and Roberts, 2005: 276-9), representing attempts at exploiting the advantages of both full sovereignty and of an autonomy supported by a benign patron state, the USA, via an ongoing series of Compact Agreements that effectively cede international relations and defence to the US in exchange for payment; they also afford these island citizens the opportunity to live and work in the US, should they choose to (Baldacchino, 2010: 46).
29In his grand sweep of 16th century Mediterranean history, French historian Braudel (1972: 154) had claimed that “the great problem” of the islands, never or only partly solved, was how to live off their own resources: soil, orchards, flocks, fish stocks; and “if that was not possible, to look outwards’ (ibid.). In spite of the mantra of sustainable development, islands fare best economically when they lure revenue from elsewhere, and the performance of their politicians often appraised by how well they manage to secure such largesse. Those small island territories that have, for some reason, been obliged to live off their own resources would have morphed themselves as plantation (and often largely monocrop) economies, providing non-essential goods to the kitchens of the West; but without the economies of scale of larger continental competitors, this business model has been shown to fail without those protectionist policies whose heyday is a thing of the past.
30If this extra-territorial turn is the key to small island survival, then sovereignty may reduce its legitimate appeal and the chances of success of its resort. This then is a strong case for non-sovereignty: a political economy that secures autonomy but maintains the vital lifelines with larger, richer economies and their labour markets. And these links are especially significant in a post 9/11 context where the option to migrate is increasingly fraught by the regulations of the receiving countries, wary of heightened security concerns, stagnant economic growth and rising xenophobia. This approach may not sound like a ‘development’ strategy; but it has been, in its own right, a sustainable one. Today, vulnerability, resilience, dogged perseverance, and clever opportunism are best played out in a scenario where decolonization does not equal disengagement.