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Small Island Economies: the WCO’s renewed focus

The WCO’s initiative on “Small Island Economies” (SIEs) was launched in June 2018 with the aim of providing the Customs administrations of such economies with tailor-made capacity building and technical assistance that would help them to curb illicit trade and smuggling more effectively, while facilitating trade flows and reducing the costs of doing business across borders.

Various challenges

There is no formal definition of SIEs, their “smallness” often referring to the size of their population, their land mass or their share in international trade. Depending on their level of development, such States/jurisdictions are loosely termed by different names that include “small economies,” “small and vulnerable economies,” “Small Island Developing States (SIDS),” or “structurally weak, vulnerable, and small economies.”

They were recognized as a distinct group of developing countries facing specific social, economic and environmental vulnerabilities at the United Nations Conference on Environment and Development (UNCED), also known as the Earth Summit, held in Rio de Janeiro, Brazil, in 1992. Special mention of SIEs was also made in the UN’s Millennium Development Goals, or MDGs.

 

Challenges they face, in varying degrees, include:

  • lack of connectedness to global value chains, which negatively impacts their share of international trade and investment;
  • remoteness from large markets, resulting in increased transportation costs;
  • high communication costs, often exacerbated by poor maritime and air connectivity;
  • inadequate institutional capacity, making them less inclined to accede to international conventions;
  • proneness and vulnerability to natural disasters, due in part to climate change.

Additionally, they are disadvantaged in terms of a narrow range of resources; overuse of resources and their premature depletion; domestic markets too small to provide significant economies of scale; heavy reliance on imported goods, which often translates into a high cost of living for residents; and limited export volumes with a narrow range of products. Many of the disadvantages faced by SIEs are magnified by the fact that they are not only small, but are themselves made up of a number of small islands.[1]

Key achievements

In order to support the Customs administrations of SIEs in effectively tackling the challenges they face and to respond to their specific needs, the WCO has been providing customized capacity building and technical assistance, with more than 60 activities having been organized during the 2017/2018 financial year.

To enumerate some, a workshop on the Revised Kyoto Convention (RKC) and other key WCO instruments in June 2017 gathered representatives from six SIEs in the Pacific, including a few non-WCO Members. This led to the successful accession to the RKC by Kiribati and Vanuatu in 2018, and by the Cook Islands and Tuvalu just a few weeks ago. In 2018, a similar workshop for countries in the Caribbean generated further interest in the RKC among islands in the region.

In order to enhance the data analysis and targeting capacities of SIEs, some have been assisted with the deployment of the WCO Cargo Targeting System (CTS) (e.g., Bahamas, Jamaica, Maldives and Singapore) and the WCO National Customs Enforcement Network (nCEN) (Comoros, Fiji, Haiti, Maldives, Mauritius, Seychelles and Vanuatu). Furthermore, the Global Travel Assessment System (GTAS), a standardized system enabling the collection and analysis of passenger data, was implemented in the Maldives at the end of 2018.

Going forward

The WCO will continue to engage with the Customs administrations of SIEs, in order to obtain a deeper understanding of their current realities. This engagement will facilitate the development of better tailor-made and effective solutions that respond to their unique peculiarities and challenges.

Based on suggestions put forward on SIEs by the WCO’s Permanent Technical Committee and Policy Commission respectively during 2018, the Secretariat:

  • organized a regional workshop for countries in the Caribbean sub-region from 13 to 17 May 2019 in Port of Spain, Trinidad and Tobago, with the additional financial support of Her Majesty’s Revenue and Customs (HMRC) in the United Kingdom and the African, Caribbean, Pacific (ACP) Group of States Secretariat;
  • organized a sub-regional workshop for some Indian ocean SIEs from 11 to 14 June 2019 in Port Louis, Mauritius;
  • will organize a regional workshop for countries in the Pacific sub-region in due course;
  • will further engage with relevant regional and international bodies, with the aim of collecting more national and regional experiences and practices.

Specific guidance for SIEs, the outline of which has already been approved by the Policy Commission, will also be developed. In this regard, the specificities, challenges and priorities of SIEs will be analysed with a view to determining areas of change and measures to be taken, while keeping their diversities and heterogeneous needs in mind.

In addition, working through the WCO Capacity Building Committee, the Secretariat will develop tailor-made capacity building programmes for the Customs administrations of SIEs based on their identified needs and priorities. The WCO’s regional structures will be engaged to assist in the delivery of these programmes, including train-the-trainer courses.

Furthermore, funds will have to be secured for the envisaged activities, and collaboration sought with relevant regional organizations such as the Oceania Customs Organisation (see article in the February 2019 edition of this magazine) in order to optimize the utilization of resources and avoid potential duplications.

Regarding accession to the Convention Establishing the Customs Co-operation Council (the WCO’s founding instrument) and other WCO conventions (e.g., the RKC), as well as to the implementation of instruments, standards and tools, the Organization will support SIEs in tackling the difficulties they face in this regard, by providing all necessary technical assistance. Such difficulties include:

  • lack of political will;
  • legislative and operational challenges around accession and implementation;
  • membership fees;
  • resource constraints that could hinder their participation in WCO meetings.

In conclusion, it should be stressed that while encouraging and supporting SIEs to accede to WCO conventions is important, it is equally important that they not only leverage existing WCO instruments and tools, but also participate in the development and enhancement of them so that these instruments and tools reflect their perspectives and aspirations.

More information
facilitation@wcoomd.org

 

[1] To better understand the environment of SIEs and their room for manoeuvre, readers are invited to peruse the article by Mauritius Customs that appears in the February 2019 edition of this magazine