Small developing countries are faced with many opportunities as the process of globalization accelerates. They also have to deal with an array of development challenges that arise because of their size. 45 developing countries have population of 1.5 million or less and 41 are members of the World Bank. Small States is a term applied to a diverse group of sovereign developing countries—some quite wealthy, some very poor; some islands or groups of islands; some land locked; many with populations of 1.5 million or less (see Defining a Small Economy). After 18 months of preparation, the Commonwealth Secretariat/World Bank Joint Task Force on Small States issued its final report, Small States: Meeting Challenges In The Global Economy, in April 2000. The report contains a comprehensive analysis of the particular problems faced by small states in taking full advantage of global economic opportunities. (See other publications).
The World Bank and its partner organizations have indicated how they intend to react to the recommendations of the Task Force report (see Partner Work Programs). This website promotes improved knowledge management and information sharing. What Makes Small States Different? The report of the Commonwealth Secretariat/World Bank Joint Task Force on Small States, Small States: Meeting Challenges in the Global Economy, concludes that developing small states share a number of characteristics that shape their development challenges. For instance, many are especially vulnerable to external events, including natural disasters, that cause high volatility in national incomes; many suffer from limited capacity in the public and private sectors; and many currently face an uncertain and difficult economic transition to a changing world trade regime. More specifically, the following characteristics define the development challenges and vulnerabilities that many small states face. Many of these factors combine to make small states' economies especially vulnerable, and in particular they affect:
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