Small island developing states (SIDS) are facing an uphill struggle to recover from the impact of the pandemic, which has deepened their financial and economic vulnerabilities, according to the United Nations Conference on Trade and Development.
Last year was an exceptionally challenging year for SIDS, which are at least 35 per cent more susceptible to external economic shocks than other developing nations, Unctad said in its Development and Globalisation: Facts and Figures report on Thursday.
While these countries are a diverse group, they share a number of socio-economic and environmental challenges and witnessed an estimated 9 per cent decline in their gross domestic product in 2020, compared with a 3.3 per cent drop in other developing countries, the report said, citing figures from the International Monetary Fund.
The economies of the 38 SIDS recognised by Unctad are largely dependent on travel and tourism. Spread across the Caribbean, the Pacific Ocean, the Atlantic, the Indian Ocean and the Mediterranean, these countries includes some of the most popular tourism destinations in the world. They also include island nations with more developed economies, such as Singapore.
Their reliance on the travel and tourism sector to earn foreign exchange revenue made them more vulnerable to the Covid-19 pandemic, which tipped the global economy into its worst recession since the 1930s, forced border closures and severely disrupted the travel and tourism sector.
The world economy is bouncing back and is expected to expand by 6 per cent this year, according to the IMF. However, the tourism sector faces a more uncertain outlook amid second and third waves of the virus in parts of the world.
Revenue in the global tourism industry fell 74 per cent year-on-year in 2020, leading to $1.3 trillion in lost export revenue. The sector is unlikely to recover to pre-pandemic levels until 2023, according to the UN World Tourism Organisation.
The economies of tourism-dependent island nations suffered an estimated 70 per cent drop in travel receipts in 2020, which are “an essential source of jobs and livelihoods", according to the Unctad report.
“Many SIDS have built strong service economies [and] the service sector accounted for over 70 per cent of SIDS’ GDP in 2019,” the report said. “On average, two in three people work in services in the island economies, half of men and three in four women, often in jobs related to tourism.”
On average, exports of services contribute 25 per cent of SIDS’ GDP. These countries generally have an import surplus and almost half of their exports are from the travel sector. As a result, 24 of the 38 nations had a negative trade balance comprising more than 55 per cent of imports in 2020.
Their remoteness poses a significant challenge to their recovery, especially the most isolated Pacific island nations.
The countries' often weak, financially vulnerable institutions are also a stumbling block to a return to growth.
“SIDS are among the most indebted developing countries in the world,” Unctad said. “In 2019, external debt accounted for 62 per cent of their GDP – a record high, mostly driven by increases in short-term debt and private debt.”
Small Island Developing States or SIDS
Antigua and Barbuda
Bahamas
Bahrain
Barbados
Belize
Cabo Verde
Comoros
Cuba
Dominica
Dominican Republic
Fiji
Grenada
Guinea-Bissau
Guyana
Haiti
Jamaica
Kiribati
Maldives
Marshall Islands
Federated States of Micronesia
Mauritius
Nauru
Palau
Papua New Guinea
Samoa
São Tomé and Príncipe
Singapore
St. Kitts and Nevis
St. Lucia
St. Vincent and the Grenadines
Seychelles
Solomon Islands
Suriname
Timor-Leste
Tonga
Trinidad and Tobago
Tuvalu
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Directors: Min Geun, Oh Yoon-Dong
Rating: 3/5
UAE%20medallists%20at%20Asian%20Games%202023
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Company%20profile
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UK-EU trade at a glance
EU fishing vessels guaranteed access to UK waters for 12 years
Co-operation on security initiatives and procurement of defence products
Youth experience scheme to work, study or volunteer in UK and EU countries
Smoother border management with use of e-gates
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If you go
The flights
There are direct flights from Dubai to Sofia with FlyDubai (www.flydubai.com) and Wizz Air (www.wizzair.com), from Dh1,164 and Dh822 return including taxes, respectively.
The trip
Plovdiv is 150km from Sofia, with an hourly bus service taking around 2 hours and costing $16 (Dh58). The Rhodopes can be reached from Sofia in between 2-4hours.
The trip was organised by Bulguides (www.bulguides.com), which organises guided trips throughout Bulgaria. Guiding, accommodation, food and transfers from Plovdiv to the mountains and back costs around 170 USD for a four-day, three-night trip.
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Titanium Escrow profile
Started: December 2016
Founder: Ibrahim Kamalmaz
Based: UAE
Sector: Finance / legal
Size: 3 employees, pre-revenue
Stage: Early stage
Investors: Founder's friends and Family
THE BIO
BIO:
Born in RAK on December 9, 1983
Lives in Abu Dhabi with her family
She graduated from Emirates University in 2007 with a BA in architectural engineering
Her motto in life is her grandmother’s saying “That who created you will not have you get lost”
Her ambition is to spread UAE’s culture of love and acceptance through serving coffee, the country’s traditional coffee in particular.
Our family matters legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
Squid Game season two
Director: Hwang Dong-hyuk
Stars: Lee Jung-jae, Wi Ha-joon and Lee Byung-hun
Rating: 4.5/5
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How to apply for a drone permit
- Individuals must register on UAE Drone app or website using their UAE Pass
- Add all their personal details, including name, nationality, passport number, Emiratis ID, email and phone number
- Upload the training certificate from a centre accredited by the GCAA
- Submit their request
What are the regulations?
- Fly it within visual line of sight
- Never over populated areas
- Ensure maximum flying height of 400 feet (122 metres) above ground level is not crossed
- Users must avoid flying over restricted areas listed on the UAE Drone app
- Only fly the drone during the day, and never at night
- Should have a live feed of the drone flight
- Drones must weigh 5 kg or less
Tamkeen's offering
- Option 1: 70% in year 1, 50% in year 2, 30% in year 3
- Option 2: 50% across three years
- Option 3: 30% across five years
UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
The UAE's journey to space
Sreesanth's India bowling career
Tests 27, Wickets 87, Average 37.59, Best 5-40
ODIs 53, Wickets 75, Average 33.44, Best 6-55
T20Is 10, Wickets 7, Average 41.14, Best 2-12
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Intercontinental Cup
Namibia v UAE Saturday Sep 16-Tuesday Sep 19
Table 1 Ireland, 89 points; 2 Afghanistan, 81; 3 Netherlands, 52; 4 Papua New Guinea, 40; 5 Hong Kong, 39; 6 Scotland, 37; 7 UAE, 27; 8 Namibia, 27
Avatar: Fire and Ash
Director: James Cameron
Starring: Sam Worthington, Sigourney Weaver, Zoe Saldana
Rating: 4.5/5
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Frankenstein in Baghdad
Ahmed Saadawi
Penguin Press
Porsche Taycan Turbo specs
Engine: Two permanent-magnet synchronous AC motors
Transmission: two-speed
Power: 671hp
Torque: 1050Nm
Range: 450km
Price: Dh601,800
On sale: now
The lowdown
Badla
Rating: 2.5/5
Produced by: Red Chillies, Azure Entertainment
Director: Sujoy Ghosh
Cast: Amitabh Bachchan, Taapsee Pannu, Amrita Singh, Tony Luke
