Wednesday, September 12, 2012

Island States and Global Finance


Describe the two main impacts on SIDS in the Pacific resulting from the global financial crisis. Use SIDS&GlobalEconomics2010 paper on Cecil as a guide (note some of the figures are contestable eg tourism’s contribution to GDP).

39 comments:

  1. Samantha Gibbs: 1445642September 16, 2012 at 1:34 PM

    SIDS such as those within the Pacific ocean often have monocultural economies based predominantly around one industry, most commonly tourism. As a result of the global financial crisis there have been two key impacts on SIDS, the first being a decrease in tourism viability and the second being internal economic crises (particularly relating to equality and poverty).
    The financial crisis has lead to a decrease in disposable income, making tourist destinations a low priority for expenditure. This has lead to SIDS suffering from decreased viability in terms of the visitors they may attract; only those with a large disposable income can afford the increased travel and accommodation costs within these pacific islands.
    A flow on effect of the decreased tourism is an effect on the internal economy of many pacific SIDS. With a reliance on tourism expenditure, the local economies use this income to provide for local education, health and infrastructure requirements. The decrease in tourism expenditure has lead to increased inequality and poverty in areas that have few alternatives in relation to fostering economic development. Diversification of the market place may be the only way for many of these SIDS to survive, as disposable income decreases, so does the life span of these Pacific nations.
    Ray,R.&Perch,L.(2010).Social Policy in the post crisis context of small island developing states:A synthesis.UNDP;Brazil

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  2. pbro820, 5791615

    SIDS, or Small Island Development States, often located in the Pacific Ocean are countries that share certain characteristics which make them particularly vulnerable to global events, such as the the financial crisis of late 2007. The two areas that seem to have been been impacted significantly is government income and expenditure, and disposable income levels.

    One of the characteristics that SIDS share is that they have a monocultural economy, with government revenue highly dependent on one particular sector, often tourism. Prosperity in this industry triggers an increase in demand for goods and services, as well as improving international relationships. When the economic crisis occurred in 2007, fewer people could afford to travel to these countries and as a result national revenue dropped significantly.

    The dependence on tourism also affects the livelihood and social wellbeing of locals. The high proportion of jobs in the tourism sector (14.5% in the Pacific region in 2006) made these countries highly susceptible to job losses during the financial crisis. This led to decreased disposable income levels among locals.

    Ray,R.&Perch,L.(2010).Social Policy in the post crisis context of small island developing states:A synthesis.UNDP;Brazil

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  3. The GFA has spread through two main channels; a ‘direct’ channel (through financial-market linkages), and an ‘indirect’ channel (through trade and investments links operating primarily through global recession). While SIDS, due to their limited integration into global financial markets, largely escaped the shocks transmitted through the first channel, they are being hit hard by the shocks transmitted through the second channel through reductions in exports, namely Tourism, and private capital inflow, leading to lower household incomes.
    The monocultural economies in SIDS, commonly based around Tourism, are accentuated by a monopsonistic and highly elastic demand. Therefore as demand falls during the GFA, SIDS experience a reduction in Tourism exports thus a reduction in GDP. This ofcourse has negative flow on effects on household income, where those working in the informal sector; the self-employed working in tourism or in companies/jobs linked to the tourism sector, have been hit hardest. Private capital flows, which exceed official flows, have also decreased, reducing incomes and increasing poverty.
    Rikash Kumar 1490320

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  4. Ray,R.&Perch,L.(2010).Social Policy in the post crisis context of small island developing states:A synthesis.UNDP;Brazil

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  5. Small Island Development States (referred to as SIDS) by and large have features that make them vulnerable to external shocks. As a result they have been significantly challenged by the global financial crisis.

    SIDS are seen has having economies of a mono-cultural nature. Tourism is a key export of pacific SIDS, plays a crucial role in the development/growth of internal economies, and as an industry has been critically affected by the crisis. As a large employer, its decline has serious repercussions on income levels and employment. This has considerable effects on social wellbeing and standards of living.

    Government expenditure in SIDS has also been severely impacted by the global financial crisis. The lack of income has meant that the governments have not only struggled to maintain investments in health and education along with other policy initiatives, but they are also limited in being able to respond to growing issues that have resulted due to the crisis, namely increasing unemployment and poverty.

    Tourism is shaped be demand. The financial crisis has illustrated just how vulnerable the industry is, not just for SIDS but worldwide, the downturn in demand and resulting impacts on both individual incomes and government expenditure illustrates the need for SIDS to continue to strengthen their economy’s through diversification.

    Ray,R.&Perch,L.(2010).Social Policy in the post crisis context of small island developing states:A synthesis.UNDP;Brazil

    kdur008
    1518944

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  6. The Global Financial Crises impacted the worlds’ financial market, and as a result people are more reluctant to part with their money. For SIDS in the Pacific, this means less tourism, and therefore wealth, as well as possibly less foreign aid. Because of their dependence upon these sources of income, the two main impacts for SIDS relate to sustaining growth, and human development.

    Declining exports limit government revenue, and their capacity to implement programmes. It also places a budget squeeze upon the health sector, and has also resulted upon the formation of the ‘new poor’, those who lost investment and wealth due to the crisis. With less money flowing in and high foreign debt, ensuring the economy grows, and maintaining high levels of health and education, will be the key issues faced by SIDS.

    Ray,R.&Perch,L.(2010).Social Policy in the post crisis context of small island developing states:A synthesis.UNDP;Brazil

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  7. Small Island Developing States (SIDS) located in the pacific are commonly monocultural economies. This puts them at a distinct disadvantage due to their increased social, environmental, and economic vulnerability to external shocks, such as the global financial crisis of 2007. This resulted in significant impacts on both the tourism and construction sectors of the islands.

    The pacific islands market themselves as a tourist destination, making the tourism sector one which greatly influences national GDP, employment, and income levels. As the financial crisis has lead to economic instability worldwide, tourist arrivals within the pacific have been negatively impacted resulting in a decline in tourism demand, and as a flow-on effect, the construction sector has also suffered.

    The tourism sector is an important revenue-generating tool for governments in the SIDS, and as a result of the financial crisis, health services, education, and issues such as poverty cannot be adequately addressed. This highlights the need for SIDS to diversify their sources of employment and income, and to create policies that are better able to react and cope with negative external forces.

    Ray,R .& Perch,L. (2010). Social Policy in the post crisis context of small island developing states: A synthesis. UNDP;Brazil

    rkha062
    1539665

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  8. Matthew Zochowski 5333365September 19, 2012 at 12:06 AM

    The recent global downturn has had its impacts felt in almost every corner of the planet including the Pacific. SIDS or Small Island Development States were especially hard hit with the recent economic crisis due to their vulnerability to external shocks. A combination of decreased tourism, decreased exports, as well as a decrease in remittances severely restricted the cash flow in SIDS.

    With a loss of jobs and decrease in disposable income, the local economy was hit which further cut jobs. As a result of these jobs cuts, many families became dependent on the public sector to support them. In nations such as Kiribati, the public sector employs 66% of the population and in Vanuatu, 50% of the recurrent budget is spent on public wage bill.

    Since public sector jobs do not generate government income, these nations have had to cut public sector jobs and go into debt to pay the remaining workers and run maintenance on infrastructure. The downward spiral and loss of income has SIDS’s governments struggling to keep investing in health and education which further damages recovery and economic diversification.

    Ray,R .& Perch,L. (2010). Social Policy in the post crisis context of small island developing states: A synthesis. UNDP;Brazil

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  9. SIDS (small island development states), many that are in the Pacific, have been significantly affected by the global financial crisis. They are particularly vulnerable to international developments, as they are largely dependent on international trade. Tourism is the main industry driving the economy of these countries. The financial downturn has meant a decrease in disposable income globally, causing this industry to suffer significantly. This has had major flow on effects to personal incomes, as well as government expenditure in SIDS.

    Personal incomes have significantly decreased in SIDS, and many people have become unemployed. The regional unemployment rater in South-East Asia and the Pacific is estimated to have risen to 5.6% in 2009, up 0.2 percentage points from 2007 (Ray & Perch, 2010). This has obvious effects for the standard of living in these countries, and the level of poverty.

    Governments of SIDS use the tourism sector as a revenue-generating mechanism. Since the financial downturn, governments have had to reduce spending in sectors such as health and education. This simply exacerbates the effects of the crisis on individuals; as people are more in need of health assistance when there is an increase in poverty.

    It is clear by the effects of the economic crisis on SIDS, and the tourism sector, that these states should be looking for ways to expand/diversify their economies. This is essential in order to increase living standards and government assistance.

    Ray,R. & Perch,L. (2010). Social Policy in the post crisis context of small island developing states: A synthesis. UNDP: Brazil.

    Anna Woodward. awoo112: 1509343

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  10. Small Island Development States (SIDS) are countries located in the Pacific Ocean that share certain characteristics that make them more vulnerable to global events.
    Monocultural economy is a characteristic of SIDS , where the government is extremely dependent on one particular sector, which most of the time is tourism. As the tourism sector has a high need for goods and services and marketing in/from other countries, SIDS become heavily effected when those countries have a market downfall (like the global economic crisis), this lead to less people travelling to these countries and spending less money if they did. This resulted in a large drop of their GDP.
    As tourist numbers dropped, this lead to the monetary input into the community dropping, as there was not as much work available. This illustrated how vulnerable SIDS are, as both the government and individuals were affected.

    Ray,R. & Perch,L. (2010). Social Policy in the post crisis context of small island developing states: A synthesis. UNDP: Brazil.

    Gben039. 1577143

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  11. Ziteng (Jim) Zhan 1203221September 19, 2012 at 1:59 PM

    Small Island Development States have little or no control of changes that were impacting on their economy as resulted from the global financial crisis. The social, economic and environmental structure of these small pacific countries are vulnerable from minor changes in the global economy, particularly the tourism sector and areas on the coastline where are extremely responsive to the global crisis bearing on them. They are islands such as Samoa, Fiji, Tuvalu, and Cook Island etc.

    One aspect where global financial crisis is evidently affecting SIDS is of the recession of working industry. In times of job recession, there is insufficient time for SIDS to respond to the job losses. Where will these old breadwinners go? A flow on effect of losing job will decline the level of housing living quality which latter alters commodity prices and see more grimace on the face on the pacific.

    On the whole, the economic downturn of SIDS is subject to the global GDP. In effect, this will predominantly lower the government revenue from the downfall of trade taxes and consumption taxes. Furthermore the reality goes on affecting the living standards of the people living on the SIDS.

    Reference

    Feeny, S. The Impact of the Global Economic Crisis on the Pacific Region. Australia: Oxfarm Australia.

    Perch, L & Roy, R. Social Policy in the Post- Crisis Context of Small Island Development States : A Synthesis. International Policy Centre for Inclusive Growth

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  12. Small Island Development States (SIDS) are countries, often located in the Pacific and Caribbean regions, which share characteristics that make them economically, environmentally and socially vulnerable, particularly to global events like the global financial crisis in late 2007 and its extension. Monocultural economy is a characteristic of SIDS, which lead the islands having significant impacts most of the time on tourism sector.
    Tourism is the main sector driving economy of these countries, which is extreme economic dependency of the government, and making influences on national economy. As the tourism sector is the main industry in pacific islands, the need for goods, services and marketing are high to attract more tourists from other countries. However, when financial crisis has lead to market down fall to those countries, tourism demand have been declined which also hugely impacted in SIDS particularly extreme drop of their GDP. The decease of tourist arrival also resulted drop of employment and income levels in SIDS. This illustrates how venerable SIDS are and need of diverse sources of employment and income.

    Ray,R. & Perch,L. (2010). Social Policy in the post crisis context of small island developing states: A synthesis. UNDP: Brazil.

    mlee243: 2187819

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  13. The global financial crisis in late 2007 had a large impact upon Small Island Development States (SIDs) in the Pacific. They are particularly susceptible as they often have mono-cultural economies, usually based around tourism. Two major impacts have been the drop in tourism and thus GDP which has also led to a rising rate of unemployment.

    Due to the financial crisis, unemployment and economic uncertainty persist and impacts on tourism have been visible. The decline in the tourism has resulted in a significant drop in GDP, employment and income.

    In 2006, the tourism sector provided 1.9million jobs in the Pacific, however, unemployment has estimated to have risen to 5.6% in 2009. The drop in employment in turn contributes to a rise in crime and inequalities. This effects the standard of living in these SID’s and highlights the need to diversify the economy.

    Ray,R.& Perch, L.(2010).Social Policy in the post crisis context of small island developing states:A synthesis.UNDP; Brazil

    ihan007 1541300

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  14. Small Island Developing States (SIDS) have not been immune to the effects of the global financial crisis, but rather have felt the impacts of the crisis relatively strongly due to their small local economies. SIDS generally tend to have a monoculture and be monopsonistic when it comes to economics (ie they have one main source of international income (usually tourism, and there are multiple groups who offer the same ‘source’).

    When the recent global financial crisis occurred demand for what SIDS could offer was reduced, thus impacting on their local economies. The prices of goods in these countries (mostly imported) increased which meant many people were becoming poorer. As with any poverty, this had flow-on effects for such things as health and education.

    Due to the low number of exports from these countries, their governments lost major revenue streams and therefore have struggled to provide aid to the people of their countries who need it most. As the financial crisis was global, other nations are now less likely to help SIDS as they need to help themselves.

    Ray,R.&Perch,L.(2010).Social Policy in the post crisis context of small island developing states:A synthesis.UNDP;Brazil

    Jason van Niekerk, 1510475

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  15. The two main impacts on Small Island Development States (SIDS) in the Pacific due to the global financial crisis are a decrease in government expenditure and local disposable income. Since the average SIDS are monopolistic economies and relies heavily on tourism the global financial crisis of 2007 has affected SIDS both at the macro and micro level.

    At the macro level the impacts on these island nations include a decline in tourist arrivals and spending as people have less money to spend. This causes hotel closures and slower operations and inevitably affects government expenditure as tourism is the key source of income. However, the impacts do not stop here. At the micro level impacts due to flow on effects at the macro level has caused issues such as loss of jobs which will lead to price volatility, increased poverty, social vulnerability and lower disposable incomes in SIDS.

    Ray, R and Perch,L.(2010). Social Policy in the post crisis context of small island developing states: A synthesis. UNDP: Brazil

    yliu397, 1617432

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  16. Ziteng (Jim) Zhan 1203221 (Improved final version of the blog above)September 20, 2012 at 9:56 PM

    Small Island Development States have little or no control over the changes that were impacting on their economy as resulted from the global financial crisis. The social, economic and environmental structure of these small pacific countries are vulnerable to minor changes in the global economy, particularly the tourism sector and areas on the coastline where are extremely responsive to the global crisis bearing on them. They are islands such as Samoa, Fiji, Tuvalu, and Cook Island etc.

    One aspect where global financial crisis is evidently affecting SIDS is of the recession of working industry. In times of job recession, there is insufficient time for SIDS to respond to the job losses. Where will these old breadwinners go? A flow on effect of losing job will decline the level of housing living quality which latter alters commodity prices and see more grimace on the faces of the pacific people.

    Secondly, these SIDS's internal economy has is a strong direct correlation to the tourism industry. In another word a decline in the number of migrants and tourist into these small pacific countries will have direct impact on the GDP of these SIDS countries as they are extremely dependent on the global tourist market. Therefore these SIDS is describe to be mono-cultural because are so susceptible to changes in the tourism industry.

    On the whole, the economic downturn of SIDS is subject to the global GDP. In effect, this will predominantly lower the government revenue from the downfall of trade taxes and consumption taxes. Furthermore the reality goes on affecting the living standards of the people living on the SIDS.

    Reference

    Feeny, S. 2010. The Impact of the Global Economic Crisis on the Pacific Region. Australia: Oxfarm Australia.

    Perch, L & Roy, R. 2010. Social Policy in the Post- Crisis Context of Small Island Development States : A Synthesis. Brazil: International Policy Centre for Inclusive Growth of United Nation of development Programme.

    ReplyDelete
  17. Small development States (SIDS) have been significantly affected by the global financial crisis. This is because for many SIDS they are seen as having mono-cultural economies, as their scale of economies greatly inhibits having a diversified one. Therefore for many SIDS tourism is their key export and main form of sustaining an internal economy. However due to the financial crisis the demand for tourism (an elastic luxury good) has drastically fallen. Which of course has had negative implications on their gross domestic product; explained by the figure below (GDP flow-chart).

    A reduction in consumer tourism spending and tourism exports has lead to an increase in unemployment, and an unhealthy governmental fiscal policy. This is because as people spend less, less demand for tourism goods and services is generated, and therefore less revenue via taxes is transformed. This consequently reduces people’s purchasing power for goods and services, and the ability for the Government to deliver quality core services i.e. health and education.

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    Replies
    1. Charlotte Hamilton-Pama 1515604September 20, 2012 at 10:30 PM

      Flow- Chart http://www.marketoracle.co.uk/Article16380.html

      Delete
  18. SIDS or Small Island Developing Nations share a similar theme. They all hold characteristics that make them economically, socially and environmentally vulnerable to external forces, in which because of their small size and economy, they have little or no control over. This extreme vulnerability puts these island nations at a significant disadvantage.

    SIDS are more vulnerable to external shocks due to their monocultural reliance of their economics. Many of these nations are dependent on one main source of income to fuel their nation, the main being tourism for Pacific Island nations.

    The global economic crisis clearly had a major impact on tourism all over the world. People were in harsh economic times, therefore had little disposable income to spend, especially on traveling. SIDS were the hardest hit due to their economies reliance on this type of expenditure.

    The impacts from the decrease in expenditure coming into these nations have a flow on effect. They include job losses, increase in food prices which in turn leads to health problems for poor nutrition. Poor nutrition leads to a decline in education, health problems in households, disease and so on. If there are less jobs available and less income coming into these nations then they can’t afford to maintain their tourist infrastructure in which tourists pay to visit. This in turn may lead to a further decrease in tourist numbers.

    Action plans have been adopted to try counteract the issue of vulnerability for these nations. SIDS are also receiving official development assistance to overcome this issue.

    Ray, R and Perch,L.(2010). Social Policy in the post crisis context of small island developing states: A synthesis. UNDP: Brazil

    Craig Mathieson 1645513


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  19. The global financial crisis has significantly affected Small Island Development States (SIDS) in the Pacific and two main impacts are higher consumer prices and increased unemployment.
    Consumer prices such as food products are related to transport prices. Most SIDS are high importers of food and therefore increased transport costs from the crisis increase food import prices. For example in Kiribati the price of rice doubled between December 2007 and June 2009. The impact is on the capacity of households, especially the poor, to meet their food needs. The impacts go beyond nutrition and will affect children’s development and household spending on other important matters such as education and healthcare.
    The second main impact is on employment. In some SIDS such as Vanuatu, tourism provides 42.4% of total employment. The financial crisis resulted in people with less disposable income so people travelled less for holidays in the Pacific. The decline in tourism is evident in many SIDS and this has had huge impacts on employment levels and income which in turn impact on the lifestyle of that family.

    Overall, these impacts result in a vicious cycle and therefore while two main impacts have been identified, the flow on effects of these on people’s wellbeing is endless.

    References:
    Perch, L., and Roy, R. 2010. Social policy in the post-crisis context of small island developing states: a synthesis. UNDP: Brazil.

    Chhibbler, A. 2009. The global economic crisis and the Pacific Island Countries: the human and social dimensions. [Online]. Availbale: http://vanuatu2010.un.org.fj/resources/uploads/attachments/documents/SpeechAjayChhibberLowyInst2.pdf. [Accessed: 19/9/12].

    Michael - 1612148

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  20. Small Island Developing States (SIDS), due to the monocultural character of their economies, tend to be more susceptible to the impact of large external economic, environmental and social changes. This susceptibility has been emphasized during the current global financial crisis. Two major impacts that SIDS have faced as a result of this crisis include a reduction in household income and a decrease in national GDP. The reduction in household income, experienced across many nations, has derived mostly from increased unemployment and has forced many of these households beneath the poverty line. GDP within these states has also declined. This has largely been due to the dependent nature of many sectors of these economies’ on exports such as tourism.

    Perch, L., and Roy, R. 2010. Social policy in the post-crisis context of small island developing states: a synthesis. UNDP: Brazil.

    Vaitaua Mauala 1559615

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  21. Small Island Developing States or SIDS in an abbreviated form, possess many characteristics which make them vulnerable to external financial shocks which affect the world. The main one would be their monocultural economies commonly based around the tourism industry, it is these economies which mould the smaller internal economies of the nations and form international relationships and generate national revenue. The tourism industry accounted for 14.5% of the jobs held by people in the Pacific Region in 2006 which is extremely high. Tourism is a demand and recreation based industry and economic crises such as the global economic crisis of 2007 undoubtedly decreased the level of tourism due to people having less money to spend on recreation which resulted in job losses in the islands. This in turn left island locals with a decreased disposable income and a decreased social wellbeing which is extremely negative- this fall in tourism also decreased the amount of government expenditure which could have been used to benefit the locals and make living conditions better.

    Ray,R. & Perch,L. (2010).Social Policy in the post crisis context of small island developing states: A synthesis. UNDP; Brazil

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  22. The residual effects of the 2007-2009 Global Financial Crisis continue to influence markets, in particular those of small island developing states (SIDS) who are more vulnerable to these external forces. The two main consequences have been; the inability to sustain economic growth and stalling the progress of human development.


    The small size of these islands, in terms of both land mass and population, means that most internal economies are monocultural. Therefore increased fuel prices resulting from the GFC have become a barrier to economic growth due to export and travel costs becoming much higher, and critical industries (eg: tourism, agriculture) are effected.


    Also, increasing costs for importing commodities, medical supplies or other essential equipment has meant that governing authorities cannot provide the highest quality services and infrastructure. Therefore the quality of life for residents is reduced.

    Jessica Esquilant
    1506142

    Source:
    Perch, L. & Roy, R. 2010. Social Policy in the Post-Crisis Context of Small Island Developing States: A Synthesis. Brazil: United Nations Development Programme.

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  23. Small Island Development States (SIDS) are characterised by their small size, in terms of area and population, their few resources, remoteness and dependence on international trade. It is this latter point that has made these nations suffer most following the global financial crisis, as costs of importing has risen.

    SIDS are also often categorised by their mono-cultural economies, which most usually are orientated around tourism. The global financial crisis has lead to lower disposable incomes worldwide, which has reduced their level of travel. This means that less money has found its way into SIDS economies, lowering the incomes of its inhabitants further. SIDS are requiring to increase the prominence of other industries in order to survive during this period of tourism downturn.

    Aaron Grey
    agre147
    1549038

    ReplyDelete
  24. The Pacific Islands are known worldwide as being tourist hotspots. The Pacific Islands depend on the tourism industry for not only employment but also such things as the National GDP and general financial security. Therefore due to the size, their monocultural economy and the development potential of these islands, they therefore can be classed as SIDS (Small Island Developing States).

    The major disadvantage of being classed as an SID is that the country depends on other countries in order to develop. These Pacific islands need a constant flow of tourists year round. This puts them at a distinct disadvantage due to their increased economic, social and environmental vulnerability to external shocks, such as the global financial crisis of 2007. This resulted in a decrease in tourism worldwide and as a result the Pacific Islands suffered. The Pacific Islands found that the decrease in tourism led to lack of government revenue, depleted health and education services and also financial and issues of poverty.

    In order to avoid future negative impacts of reduced tourism in the Pacific Islands as identified, several actions need to be carried out. There is a need to:

    - Create a diverse variety of jobs that do not only involve the tourism industry.
    - Create policies that allow and encourage other industries to flourish
    - Attempt to avoid negative impacts in the future by planning for the future and create policies that can cope with negative external factors.

    Ray,R .& Perch,L. (2010). Social Policy in the post crisis context of small island developing states: A synthesis. UNDP;Brazil

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  25. Small Island Development States (SIDs) are mono cultural economies based on one industry, specifically tourism. Because these are usually mono cultural economies, it puts SIDs at major disadvantage where external shocks can easily increase their economic and social vulnerability. The reliance on tourism expenditure in these SIDs has meant that if the tourism sector is negatively affected, the local people are highly susceptible to job losses. This occurred as a result of the global financial crisis having a heavy impact on SIDs, where tourism was in decline as a result of less disposal income. This had further effects where a decrease in visitors to the area as well as less exports has meant a significant decrease in the internal economy of the area. Because these areas of SIDs have no alternative income, increased poverty rates and inequalities are the result.

    Ray,R. & Perch,L. (2010). Social Policy in the post crisis context of small island developing states: A synthesis. UNDP: Brazil.

    Enea007, 1519541

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  26. Ailish Collins 1674285September 25, 2012 at 4:59 PM

    Small Island Devlopment States (SIDS) in the Pacific have vulnerable economies due to their size, location and reliance on tourism as a main economic driver. There SIDS have been severely impacted by the financial crises, causing particular challenges due to higher food prices and increased unemployment.

    The financial crises significantly reduced the amount of tourists travelling to Pacific Islands as the disposable income of people worldwide was largely affected. This lack of economic activity in the SIDS tourism sector resulted in unemployment as businesses were not making enough money to survive. This accelerated the decline in quality of life and saw an increase in poverty and malnutrition as people no longer had enough income to provide for themselves and their families.

    The issue of increasing food prices is due to the isolation of SIDS and the transportation costs associated with importing food from other countries. Increasing food prices coupled with unemployment further deepens the problems associated with quality of life and the overall ability for people to obtain basic human needs.

    Source:
    Perch, L. & Roy, R. 2010. Social Policy in the Post-Crisis Context of Small Island Developing States: A Synthesis. Brazil: United Nations Development Programme.

    ReplyDelete
  27. The global financial crisis that occurred in 2007 generated a number of impacts on the SIDs in the pacific, including impacts on national economies as well as human development. The economies of SIDs are predominantly mono-cultural which leave them vulnerable to social, environmental and economic global external forces such as the financial crisis.
    Tourism is often the main export in SIDs with the government having a heavy reliance on it as it is their main source of revenue for spending. Therefore the decrease in tourism that SIDs have experienced due to the financial crisis has effects on the internal economic market restricting the expenditure and ability of government to sustain growth both economically and socially through delivering infrastructure, services and other provisions. There have also been impacts on human development with household incomes affected with loss of jobs and unemployment, this resulting in the inability to provide basic provisions such as food, healthcare and education decreasing social wellbeing and producing more poverty and deprivation. Diversification of the internal market would aid in reducing the vulnerability to external shocks and assist in economic viability, with flow on social and environmental benefits.

    source:
    Perch, L. & Roy, R. 2010. Social Policy in the Post-Crisis Context of Small Island Developing States: A Synthesis. Brazil: United Nations Development Programme.

    swil403
    1666568

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  28. Small Island Development States (SIDS) are countries remotely situated in the Pacific Ocean which share characteristics that make them vulnerable to external shocks. This is particularly due to the nature of their economies being mono-cultural, in which the tourism industry typically acts as their primary source of financial generation. As a consequence, the global financial crisis generated significant challenges for sustaining economic growth and human development in SIDS, mainly through the decline in tourism and its associated socio-economic effects.

    The tourism industry in mono-cultural economies requires high demand from other countries to sustain economic growth; as a result of the financial crisis, the demand for tourism consumption declined, hence triggering a substantial decrease in GDP, employment and income for SIDS. This overall reduction has generated an increase in poverty, consumer prices and gender inequality through rising unemployment rates, and has hindered the government’s ability to deliver adequate health and educational provisions. These impacts ultimately reflect the economic and social vulnerability of SIDS, and their associated flow-on effects which reduces the overall well-being of local people.

    Reference:
    Perch, L., & Roy, R. 2010. Social policy in the post-crisis context of small island developing states: a synthesis. UNDP: Brazil.

    zyan070, 1583674

    ReplyDelete
  29. Jessica Parulian - 1598075September 25, 2012 at 10:56 PM

    Small Island Development States (SIDS) located in the Pacific Island are very susceptible to external shocks such as natural disasters and financial crisis’. Their economies are weak due to the small scale, isolated location and what are usually mono cultural industries. Events such as the global financial crisis which occurred in 2007 has impacted them socially, environmentally and economically.

    Large impacts were felt in the tourism industry as it was heavily depended on by the government and local residents. Tourism provides jobs and revenue for spending which encourages growth and further development of the country’s infrastructure. The global financial crisis decreased the number of tourists travelling to the SIDS as peoples spending became more cautious and the price of travel increased. Therefore the job loss and decreased income occurred which lead to a decline in the quality of life of some residents.

    The price of transportation also impacted on local food prices, especially products that were imported. This further hinders the quality of life of those whose income was affected by the tourism market. High food prices deepens the issues of increased poverty rates and inequalities.

    Source:
    Ray, R and Perch,L.(2010). Social Policy in the post crisis context of small island developing states: A synthesis. UNDP: Brazil

    ReplyDelete
  30. SIDS, especially those within the Pacific region, tend to rely on one industry (being a monocultural economy in nature); in most cases this industry is tourism. Economic reliance on a few key industries coupled with the geographical nature of SIDS, being small and isolated, means that global economic shifts will affect their economies to a large degree; this has been witnessed through the global financial crisis.

    SIDS have experienced both a decrease in GDP and employment as a result of the global financial crisis. This would have resulted from a decrease in external spending by various nations globally; a major source of income for Pacific SIDS due to their reliance on tourism. 1.9 million jobs were supplied by the tourism sector in 2006 throughout the Pacific showing that a global financial decline would have a major negative impact on GDP and employment (Perch & Roy, 2010, p.13). The ability of SIDS to react to natural disasters (a phenomenon that many are prone to experiencing) and relief efforts associated with such disasters may also be adversely affected due to the global financial crisis lessening access to funds and resources.

    Reference:
    Ray, R and Perch,L.(2010). Social Policy in the post crisis context of small island developing states: A synthesis. UNDP: Brazil

    Sunit Patel
    1473264

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  31. Small Island Developing States (SIDS) in the pacific generate revenue as monocultural economies’. These monocultural economies’ invest a lot of time and money in one industry, for example, tourism. Tourism in any Pacific Island nation is the main export and the main source of revenue, although this may be the only practical way of generating revenue in such nations, they then become vulnerable to external shocks, like the global financial crisis. The two main impacts on SIDS in the pacific resulting from the global financial crisis is the decline in household incomes and the increase in consumer prices. The decline in household income is a result of unemployment. The tourism industry (the main export industry in the pacific) has decreased by 5.5% in 2009. This decrease is a result of the harsh reality- that people can longer risk spending on luxury goods and services, and in return people lose their jobs if there is a decline or no demand in the tourism industry. The increase in consumer prices, basically mean people living in SIDS will continue to pay more and more for the essential consumer goods, such as rice, water, energy and petrol. These nations in the past have been self-sufficient are now dependent on imported goods, especially imported food. The increase in consumer prices will eventually lead to major health problems, poverty and an increase in crime rates.

    Ray, R. & Perch, L. (2010). Social Policy in the post crisis context of small island developing states: A synthesis. UNDP: Brazil


    P. Schuster (1039302)

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  32. The global financial crisis in 2007 has created major impacts for most countries but significantly in the Small Island Development States (SIDS) due to its common mono-cultural economy. The nature of their economy makes these SIDS more vulnerable socially and economically from external(global) changes. The tourism industry contributes a large portion of the nations' GDP and income flow and plays a key role in the growth and development for the SIDS. The two main impacts of the global financial crisis for SIDS are the state of government income/expenditure and the overall well-being of residents. The decline of tourism has reduced the government’s ability to maintain and provide adequate services and impacts greatly on growth and development opportunities. The flow on effects has increased unemployment, lower household incomes, also with the rise of consumer prices these have all contributed to the various growing socio-economic issues such as poverty and inequality.

    Ray, R and Perch,L.(2010). Social Policy in the post crisis context of small island developing states: A synthesis. UNDP: Brazil

    kpar140, 1548668

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  33. Small Island Developing countries (SIDS) are extremely dependent and vulnerable to the financial situation in a global context. because SIDS are mostly sustained on mono-cultural economies, any reduction in revenue through a shock in the global financial state has a very large effect on their economic well being.Usually the mono-cultural economy of SIDS is tourism and with major shifts in the global economy, tourism is a sector that suffers major damage in the significant reduction of people spend large amounts of money on vacation.

    The global financial crisis in 2007 had a major effect particularly through the major decline in GDP through loss of tourism but also the cost of importing commodities. the price of rice in Kiribati doubled between December 2007 and June 2009. The inflation rates across the pacific ranged from 3.6 percent up to 9.0 percent. this has had a visible effect on peoples ability to afford food. this poor diet and inadequate nutrition that has resulted from increasing food prices is now a major health issue in many SIDS.

    Ray, R and Perch,L.(2010). Social Policy in the post crisis context of small island developing states: A synthesis. UNDP: Brazil

    ssti017, 1506222

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  34. SIDS in the Pacific has been particularly impacted by the global economic crisis. The adverse effects include such as job losses, home equity declines, inflated commodity prices and a downturn in markets.. SIDS’s typical monocultural economics and monopsonistic demand significantly result in those impacts. Tourism is the leading industry of many SIDS. The global financial crisis directly affected the huge decline in the tourism.

    One major impact is the decline in work opportunities which mainly from loss of employment and reduced working hours. For example, in 2006, tourism provided 31% of total employment in Fiji and 42.4% in Vanuatu. A large numbers of people also work links to the tourism sector. Therefore, many people heavily rely on those to meet their needs, any decline in the tourism industry can have huge impacts on employment and income. More importantly, it could impact issues like poverty, crisis and so on.

    Health problem is another impacts of the global economic crisis. When income decrease, poor diet and inadequate nutrition then become an potential problems that could lead to serious health problems as well was lead to declining education outcomes, particularly among young children. The governments also would not have enough ability to subsidize healthcare and food support.

    Reference: Ray, R and Perch,L.(2010). Social Policy in the post crisis context of small island developing states: A synthesis. UNDP: Brazil

    xwan290 ID:1543816

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  35. The Small Island Developing States (SIDS) in Pacific mainly invests a lot of time and money in one specific industry, most commonly tourism, which refers as mono-cultural economy. This unique form of economy for a country or area is very vulnerable since the whole country or area is relying on the only one industry and once the international financial state has changed, this specific industry had to be changed. For example, the global financial crisis in 2007 had a huge adverse impact on tourism in Pacific. First of all, the crisis declined the overall GDP in Pacific area due to the majority loss of working opportunities, such as tourism section, as well as the increased import costs. One specific example was the dropped of 25% of GDP in Samoa. Moreover, the crisis also caused to the declined of household income and national income due to the increased of unemployment. One specific example is the decreased of 5.5% of tourism section in 2009 led to the increased of unemployment as well the decreased of household incomes. At last, the crisis also had a great impact on the increased of consumer prices, mostly is imported, such as the increased of rice in Kiribati during 2007 and 2009. This adverse increasing price had largely influence the affordability of food for the local people and led to an urgent health issues till nowadays.

    Ray, R and Perch,L.(2010). Social Policy in the post crisis context of small island developing states: A synthesis. UNDP: Brazil

    khu009 1538849

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  36. Of the 25 countries that suffered the greatest number of natural disasters during the 1970s and 1980s, 13 were small island developing states (SIDS) (UNCTAD,1997). Supporters of economic globalisation argue that small economies can be strengthened by specialising in areas of comparative advantage, such as tourism, offshore finance or agricultural production. Take tourism for instance, the monocultural economies in SIDS are mainly based around tourism. During the financial crisis, SIDS experienced a decrease in tourism exports thus a high proportion of job loss in tourism sector. This also resulted significant reduction in their GDP.

    United Nations Conference on Trade and Development (UNCTAD),1997. The Vulnerability of Small Island Developing States in the Context of Globalisation: Common Issues and Remedies. Background paper prepared for the Expert Group Meeting on Vulnerability Indices for SIDS, New York, 15–16 December 1997.

    Ray,R. & Perch,L. (2010). Social Policy in the post crisis context of small island developing states: A synthesis. UNDP: Brazil.

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  37. Small islands are made vulnerable by their small size, insularity and remoteness, environmental factors, limited disaster mitigation capability, and demographic and
    economic structure. The larger, and least globally connected island states are those most severely affected by disaster. Although it is the smaller islands that are most at risk from ‘knock-out’ by a single event. Global pressures have been cast as having
    a negative influence on island vulnerabilities. However, global pressures should not only be interpreted as a negative. Some instances of globalisation are clearly positive, for example: institutionalised co-operation at the global scale facilitates greater co-operation at the national and regional scales. Other global pressures can also
    be positive foreign direct investment, cultural modernisation and identity politics can be tools for enhancing resilience given supportive regulatory mechanisms and transparent and accountable governance.


    bche086 1540113

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