Business Environment Reform in Small Island Development States. Implications for St Helena

Standard economic advice is not always appropriate to the circumstances of Small Island Developing States  and conventional policies do not always lead to the same outcomes that would be expected for larger, mainland economies.

This assessment from BERF’s Evidence and Learning research team guided the approach for a recent report prepared for DFID’s Overseas Territories Department on behalf of St. Helena.

St. Helena’s unique features as a Small Island Developing States  – its small population of around 4800 persons and its status as a UK overseas dependent – makes it distinctive even within the SIDS grouping.

BERF was commissioned to review the experience of Small Island Developing States  in implementing business environment reform programmes with the objective of identifying lessons that would be relevant to policy questions currently facing St Helena. These lessons will inform a follow-up BERF project which will review the investment climate of St Helena, in order to recommend appropriate reforms that will maximise the benefits of forthcoming commercial air access to the island.

A review of available evidence suggests that in investment climate reform, as in any other area of economic policy making, Small Island Developing States  are keen to understand the experiences of other similar economies to the greatest extent possible before making their own policy choices.

In drafting the report, the Evidence and Learning research team therefore highlighted the experiences of a number of Small Island Developing States  through a series of case studies. Each case study focused on different aspects of investment climate reform that are of particular interest to St Helena. The case studies are supported by an introduction to relevant economic policy considerations for Small Island Developing States  and additional evidence of Small Island Developing States  ’ experience.

Case studies were prepared on the following aspects of investment climate reform as applied to the countries referenced:

  • Tax reform – Solomon Islands, Tonga, Federated States of Micronesia and Kiribati.
  • Immigration- Seychelles, Galapagos Islands and Hawaii.
  • Encouraging investment – Grenada, Fiji
  • Engagement – Vanuatu
  • Land conservation and climate change – the Galapagos Islands