The future of small island states (25 November 1996)

Developing countries serve as custodians of most of the world's biological resources. The indispensable services they provide to the world community have always been taken for granted and treated as free goods. We must now begin to place an economic value on them if we were to expect developing countries to maintain them largely for the benefit of the rest of the world.

Winston Scot Memorial Lecture, delivered by Maurice F. Strong, at Bridgetown, Barbados, 25 November 1996

Barbados has always been one of my favourite places and I have many warm memories of the visits I have made here over many years in which I have been able to observe the remarkable transformation of Barbados from one of Britain's most attractive colonies to one of the most successful, respected and influential small nations of the world community. Indeed, you have a great deal to be proud of as you mark next Saturday the 30th anniversary of your independence. I congratulate you and join with all the friends and admirers of Barbados throughout the world in paying tribute to the impressive achievements of this past 30 years which make Barbados an outstanding example of how small island nations can become successful participants in the global economy while maintaining their own unique culture, values and quality of life.

One of the evidences of the remarkable progress you have made is the fact that you have now "graduated" from the ranks of the developing countries eligible for World Bank loans. But as a member of this distinguishes alumnus, Barbados continues to be a highly respected and influential member of the World Bank which, as you know, still has some important cooperative projects underway in Barbados in the field of technical assistance, road maintenance and rehabilitation and human resources.

The exceptional achievements of Barbados in its first 30 years as a nation are the product of the efforts and the qualities of an exceptional people who have produced and responded to a series of leaders who have been exceptional by any standard. Sir Winston Scott, who this lecture memorializes, was one of these, a person whose leadership as your first Governor General did so much to establish the foundations for the development of your thriving society and who earned the respect and esteem of his international contemporaries. And as this is my first visit here since the passing of your late Governor General, Dame Nita Barrow, let me also take this opportunity to pay tribute to her as one of the finest, wisest, most gracious and warm hearted people I have ever had the privilege of knowing.

Unrelenting leadership

In one of the many acts of quiet but unrelenting leadership which was her hallmark, Dame Barrow made a particularly important contribution to the Global Conference on the Sustainable Development ofSmall Island Developing States which Barbados hosted in April 1994. Immediately preceding the conference she convened a group of "eminent persons" as a contribution to the conference, in which she was good enough to invite me to participate.

Coming as it did during the era of great global conferences, it did not perhaps receive the attention it deserved. But it did produce an enhanced understanding of the special problems of small island states and some extremely valuable insights and recommendations for dealing with these issues. The results of this conference are highly relevant not only to the small island states themselves, but to the world as a whole, although this is not yet adequately reflected in the attitudes and priorities of the larger community of nations. Thus we must continue to make every effort to build on and mobilize support for follow up and implementation of the Barbados conference and the related recommendations of the Earth Summit's Agenda 21. The Alliance of Small Island States (AOSIS) provides a useful and much needed vehicle for these efforts which has already demonstrated its effectiveness at the United Nations and in international negotiations, notably in respect of the Convention on Climate Change. But it needs and deserves much stronger support from its members and others.

One of the questions I am. asked most frequently these days is "was Rio really successful?" Little more than four years after the Earth Summit, it is still too early to pronounce any final judgement.

New impetus and direction

Next year a special session of the United Nations General Assembly will be convened in June to review progress since the Earth Summit and provide new impetus and direction to following up and implementing its results. This will not only be the 5th anniversary of Rio,' but the 25th anniversary of the UN Conference on the Human Environment held in Stockholm in 1972. Next year's special session of the UN General Assembly will be preceded by a meeting of the UN Commission on Sustainable Development. And on March 13-19, 1997, a "people's assembly" will take place in Rio de Janeiro, Brazil, for which President Cardoso of Brazil has agreed to be the Honourary Chairman with strong support from his government, the State Government of Rio de Janeiro and the Brazilian non-governmental, business and professional communities. It will bring together representatives of National Councils for Sustainable Development and similar bodies together with representatives of key civil society sectors and constituencies to share their experience and renew their commitment to Rio's Agenda 21. This assembly will provide an important civil society input into the official processes.

The Rio +5 Assembly will also lend new impetus to the articulation of a peoples' "Earth Charter" promulgating basic moral and ethical principals for the conduct of nations and people towards each other and the Earth. This builds on a piece of unfinished business at Rio where we were unable to achieve our original aspirations for agreement by governments on an Earth Charter. Values, ethics and moral principles provide the basic underpinnings of our societies and the underlying motivation for our attitudes and . behaviour. Thus, acceptance of these principles would provide the indispensable foundations for the transition to a sustainable way of life on our planet.

As an event itself, Rio was clearly remarkable, indeed historic. Never before had so many of the world's political leaders come together in one place, and the fact that they came to consider the urgent question of our planet's future put these issues under an enormous international spotlight. This was helped by the presence at Rio, both in the conference itself and the accompanying "Global Forum", of an unprecedented number of people and organizations representing every sector of civil society, and more than double the number of media representatives than had ever covered a world conference.

"People pressure"

This "people-pressure" helped to move governments to agree on a set of principles, the Declaration of Rio, and a comprehensive program of action to give effect to these principles, Agenda 21.

The Earth Summit produced agreement on two historic framework conventions, one on Climate Change and the other on Biodiversity which have since come into effect. It also launched the negotiating process which has since produced agreement on a Convention on Desertification, an issue of special importance to many developing countries, particularly in the arid regions of Sub-Saharan Africa.

Despite shortcomings, the agreements reached at Rio represent the most comprehensive program ever agreed by government for the shaping of the human future. And, the fact that they were agreed by virtually all of the governments of the world, most of them represented by their head of government, gives them a high degree of political authority. But, as we have seen, it does not ensure their implementation. This will depend on what governments and others do to follow up and give concrete effect to the decisions taken at Rio.

So far the record is mixed at best, particularly at the level of governments. To some degree this is understandable. The changes called for at Rio were fundamental in nature and will not come quickly or easily. Climate change is a case in point. Although the latest report of the Inter-Governmental Panel on Climate Change points to growing scientific evidence that human activities are a major contributor, it is clear that even the modest targets set by the parties to the Convention on Climate Change will not be achieved.

Positive developments

There have, however, been some positive developments from which we can draw encouragement. The United Nations Commission on Sustainable Development, accompanied by a high-level advisory committee, has made a promising start as the forum for continuing governmental consultation and cooperation in following up and implementing the Rio agreements. After a period of recession in political will, the United States is reasserting its leadership in respect of the issues on which it was so reluctant at Rio. Japan has an' enacted a basic environmental law. Other countries, notably China, have developed their own national "Agenda 21" in response to the global Agenda 21. Particularly encouraging is the fact that many developing countries have initiated measures to give effect to Agenda 21 despite the fact that the additional financial resources called for by Rio have not been forthcoming.

Despite replenishment of the Global Environment Facility, developing countries have good reason to be disappointed in the response by industrialized countries to their needs for financial support in effecting the transition to sustainable development. In fact many countries have actually reduced official development assistance. The rich have never felt, or acted, so poor as they do today.
It would clearly be unrealistic at a time when all industrialized countries are experiencing severe economic pressures and budgetary stringency to expect these additional resources to come through increases in foreign aid in traditional terms. What is required is not totally new funds, but a massive reorientation of current budgets, subsidies, fiscal, tax and economic policies to provide positive incentives for sustainable development, and new, innovative approaches to resource transfers. A recent study commissioned by the Earth Council makes it clear that literally hundreds of billions of dollars are being used by both industrialized and developing countries to subsidize activities that are both unsustainable in environmental terms and unnecessarily costly and wasteful in economic terms. Some, including subsidies on water and energy in developing countries, actually serve to impair and increase the cost of these vital services to the poor.

Estimates made for the Earth Summit indicated that if developing countries were accorded full and free access to the markets of industrialized countries, they could earn through trade much more than they now receive as development assistance.

Promising means

Economic instruments and tradeable emissions permits offer promising means of using the market system for channelling resources available for environmental improvement to those places in which they can be utilized most cost effectively. While there are still many difficulties to resolve in designing and implementing emission trading, the US government has introduced an ambitious S02 program as part of the 1990 Clean Air Act Amendment.

Developing countries serve as custodians of most of the world's biological resources. The indispensable services they provide to the world community have always been taken for granted and treated as free goods. We must now begin to place an economic value on them if we were to expect developing countries to maintain them largely for the benefit of the rest of the world. Doing so would not only ensure the conservation of these precious resources, but provide an additional source of resource flows to these countries which would represent a wise investment by the international community, rather than an act of aid or charity.

The most exciting and promising post-Rio developments are occurring outside of governments, where there has a virtual explosion of activities and initiatives on the part of grass-roots organizations, citizen groups and other key sectors of society. The Earth Council was formed as a direct result of the Earth Summit in order to facilitate cooperative action to implement Agenda 21 by empowering people at the grass-roots and community level, supporting their initiatives and linking them to the larger policy and decision milking processes which affect them. Headquartered in San Jose, Costa Rica, it has developed a network of consultative and partnership arrangements with many thousands of community, grass-roots, professional and other non-governmental organizations around the world. I am pleased to say that the late Dame Nita Barrow was one of the founding members of the Earth Council and one of our most devoted and effective colleagues. We miss her greatly.

In cooperation with the Earth Council, engineers and architects through their international bodies, have committed their professions to cooperative programs designed to support implementation of Agenda 21 in their sectors. The World Tourist and Travel Council, representing what is now the world's largest single industry, and the International Road Transport Union representing the transport sector which is so important in both environmental and economic terms, have both, in cooperation with the Earth Council, developed their own versions of Agenda 21 for their industries, and other sectors are taking similar action. Some 1600 cities and towns around the world have adopted their own local Agenda 21 under the aegis of the International Council for Local Environmental Initiatives, again with the support and cooperation of the Earth Council. One of the most encouraging and well conceived initiatives I have seen is your own "Initiative of Hope" in establishing the Future Centre Trust Building on the highly successful innovative "Village of Hope" developed in relation to the Conference on Sustainable Development of Small Island States.

Change of course

The World Business Council for Sustainable Development has been reconstituted with a membership of some 120 chief executives of major companies around the world with a commitment to continuing leadership in effecting the change of course called for at Rio. And regional business councils are being established to facilitate this process at the regional level.

The evidence produced for the Earth Summit made it clear that what is needed is fundamental change in the dynamics and direction of our economic life. This basic change of course has not occurred and until it does we will, despite our rhetoric and good intentions, continue to move in a direction that is simply not sustainable.

The environment is a central issue for all small island states and it is no exaggeration to say that the way in which these states manage their environment will be critical, indeed decisive, to their future in the 21st century and will have an important bearing on the future prospects for the global environment. Barbados has been in the lead amongst the island nations of the Caribbean in recognizing this. The report of the West Indian Commission "Time for ActionII stated that there is "no greater danger as we look to the 21st century than the implications of the crisis of environment and development". And it calls for the Caribbean to be declared a zone of environmental protection.

In the island countries of the Caribbean and most other small islands the environment is no mere marginal issue; it is the key to the economic future and in ;ome cases the very survival of these nations. While small island states contribute relatively little to global risks, notably climate change, they clearly bear a disproportionate share of these risks. The environment represents the natural capital of your countries, the principal resource on which their development must be based and on which the hopes and aspirations of the future of the peoples of these islands primarily depends. Thus, maintaining the integrity of the environment -the soil, the plant and animal life, the water resources, the coastal areas and marine resources which constitute your natural capital - must be a primary objective of the national development process and integrated fully into its every aspect from planning to implementation and ongoing management. This is what sustainable development is all about and why it is the only viable pathway to a secure and promising future for small island nations.

Tourism and the environment

There is no industry more inextricably linked with care and protection of the environment than tourism. It is the basic resource on which the tourist industry is built and if the tourist industry of a country is developed under conditions which destroy or undermine the environmental capital on which it is based, the economic foundations of the industry will also be undermined. Sustainable tourist development is therefore indispensable to sustainable development of the small island states which depend to such a great extent on tourism for their economic future.

It is encouraging to note that sustainable development of tourism is now being taken seriously both by the tourist industry and by the countries for which tourism is an important contributor to their economy. Although some of this may be more lip service and public relations than a commitment to real change in the policies and practices through which tourism impacts on the environment, it is nevertheless a very promising movement in the right direction. And more and more tourists, developers and operators are translating their commitment into practical measures for sustainable tourist development. Barbados, I am pleased to say, already has a number of good examples of this encouraging trend.
In my capacity as Chairman of the Earth Council, I had the privilege of joining with the World Travel and Tourism Council in London in September 1994 in launching the "Agenda 21 for the Travel and Tourism Industry" which sets out a systematic framework for action with nine priorities for governments and a ten-step program for businesses to make the tourism industry more environmentally responsible, and sustainable. And I was pleased to hear in a recent follow-up meeting of the many practical steps its members are taking to implement this agenda. The initiative is the product of a cooperative arrangement between the World Travel and Tourism Council, which represents 75 of the world's top travel and tourism companies, the World Tourism Organization - the UN Agency for Tourism - and the Earth Council.

Travel and tourism are a primary manifestation of our global community, forging the linkages of understanding and common interest amongst people which enable us to function as a community. But while this is true in principle, we all know it does not always work that way in practice. All is not well in the Edens of our planet. As international tourism continues to grow -revenues rose by some 7% in 1995 according to the World Tourist Organization -problems are growing which pose an immense set of challenges to the future of the industry and of those who depend on it.

Fun out of travelling

The continuing growth in the number of people travelling is producing crowded skies and airports, traffic congestion on the ground and tedious delays in crossing borders which make travel to, from and within some of the world's main cities increasingly difficult and time-consuming. Personal security and terrorism are also a growing phenomena of which tourists are increasingly the victims and sometimes the targets. Already these conditions are taking much of the fun out of travelling.

The environmental impacts of tourism and travel will loom much larger in the period ahead and will have a profound effect on the economics of the industry. These impacts arise in virtually every aspect of the industry's activities from the siting to the operation of airport and port facilities, roads, hotels, resort and recreational facilities. And, of course, the industry is a major contributor to increases in the use of fossil fuels.

The natural resources and the cultural heritage of island developing countries now provide some of the most attractive and appealing tourist destinations. These include many of the world's best beaches, marine resources and waterways, its most spectacular natural wonders, biodiversity and exotic ecosystems. Many of these are also home to some of the world's most important ancient cultures, traditional peoples and rare species. Yet already they are endangered by the influx of tourists under conditions that undermine both the environment and the local culture.

Hit-and-run tourism can produce quick money. But like most quick money schemes, there is no future in it. In undermining the environmental and cultural resources which make such places attractive to tourists, these practices tend to subordinate the local society, often producing for the local people only the most menial of jobs and ultimately depriving the tourist industry itself of the very assets on which its future depends. This is clearly not in the interest of either the local community or the tourist industry.

There can only be one answer to this and you will not be surprised when I say that it is sustainable development. Fortunately, there are an increasing number of positive examples of sustainable tourist development. I heard a number of these at a conference last fall on sustainable tourism in the Caribbean at the Punta Cana Resort in the Dominican Republic. It is - indeed must be - the wave of the future for the tourist industry.

Social values

Tourist development which provides for maintaining the integrity and viability of the environmental resources and cultural and social values of the local community will take more time in planning and in consulting with the local community. And it will sometimes take more initial investment. But it will also ultimately provide a much better and more secure return on the investment, both for investors and for the local community.

Sustainable tourist development must become the norm of the industry rather than the exception.

It is only realistic to acknowledge that the qualitative benefits of sustainable tourist development cannot be achieved without cost. And in an industry in which there is inevitably a scramble for the developer to shift as many of its costs as possible to the host country government and local community, there will always be difficulties in allocating costs. I need not tell you of the massive amounts of new investment that would be required to meet the expansion needs of the tourist and travel industry as well as effecting the major improvements in infrastructure, facilities and services that are already constraining its growth. Under our market economy system, it is clearly the end users - the customers that should bear the costs. The movement towards a "user pays" basis for allocating these costs seems to me to be inexorable and equitable. The industry is already subject to many taxes levied by various levels of government and it is important that these taxes be used to meet the costs of tourist-related infrastructure and services rather than having the user pay twice for these. Even with this, higher prices for the travelling public are inevitable and this is bound to reduce demand at the low end of the market. While this will cut into the rate of growth, overall the market will continue to grow. And as you have seen here in Barbados, more and more people today are prepared, and able, to pay more for quality.

Surely the alternative of absorbing the costs and depreciation of the natural capital on which the investment is based would be both unfair and unwise. And we would be putting our head in the sand if we feel that we can have it both ways. The costs must be met and it is much more advantageous and responsible to meet them by investing in sustainable development than by accepting unsustainable practices that will be ultimately self-defeating.

Real change

Real change will only occur as those who guide and manage the processes of development bring to their mission a strong commitment to the environment and social responsibility and the knowledge and skills required to give effect to it.

There can be no doubt that customers of the tourist industry are becoming more environmentally aware. Even those who are not environmental activists are increasingly turned off by evidences of environmental irresponsibility and respond positively to good examples. Travel and tourism was the principal industry identified in the Earth Summit's Agenda 21 as having the unique potential to make a positive contribution to maintaining the environmental integrity of our planet.

In many ways, business is at the heart of the environmental dilemma. We must understand that in the challenge of achieving a global sustainability, we must apply the basic principles of business, i.e. running "Earth Incorporated" with a depreciation, amortization and maintenance account. On this basis, much of what we have been regarding as wealth creation, has in fact represented a running down of our natural capital.

The larger challenge we face which is nothing less than re-inventing our industrial civilization. This will call for re-design of our patterns of production and consumption around systems that eliminate or reduce waste and environmental impacts to the entire product cycle from raw materials input to use and disposal of end products.

Leading edge

It is, in my view, the wave of the future for society and for industry. And the tourist industry is on the leading edge of this wave. While there will be many who will resist it, I am convinced it will create far more opportunities than it forecloses. And those who lead the processes of change in this direction will be the survivors and beneficiaries of the eco-industrial revolution.

Of course, tourism is not the only industry on which the economies of small island states depend. Commodity exports were the original basis for development of the economies of many island nations, including of course, Barbados. And they are still a major source of income and foreign exchange for many. But changes in the world economy which have affected the prices and markets for commodities like sugar, which were the mainstay of many island economies, have made these a less reliable component of economic growth. The increased costs of land, machinery and labour, have squeezed profitability to the point where investment in these traditional export sectors is becoming less and less viable. In the meantime, air transport has provided rapid access to major markets for higher value added agricultural products like flowers, fruits, vegetables and other specialized crops. These, it would seem to me, provide the principal new opportunities for growth in the agricultural sector.

It is especially important in the contained spaces of small island countries that they control the use of chemical pesticides and fertilizers which contaminate the soil, water supplies and the food chain. There have been some encouraging developments in agricultural research, primarily through the efforts of the agricultural research institutes of the Consultative Group on International Agricultural Research as to moving to less chemical intensive, organic methods of nourishing crops and biological methods of pest control.
Prospects for agriculture are closely related to those for the tourist industry. The tourist industry provides a growing local market of locally grown fruits and vegetables. But it also impinges on agricultural lands and contributes to reducing the viability and attractiveness of agriculture.

As Barbados has been amongst the first to realize, the economies of small island nations must be diversified beyond both tourism and agriculture if they are to provide the jobs, the incomes, and the export earnings required to meet the needs and expectations of a growing population in the period ahead. This means emphasizing the qualitative dimension in the tourist sector and focussing on the most promising higher value opportunities in agriculture.

Principal source

The globalization of the economy provides many other opportunities for diversification. Knowledge, manifested primarily through technology, is the principal source of added value and competitive advantage in the global economy. Most of the new generation of opportunities lie in the field of technology from the manufacture of technology-based products to their assembly, to financial and related services. To take advantage of these opportunities in a marketplace that is intensely competitive requires high standards of education and training. The priority which Barbados has accepted to education is proving to be one of your wisest investments. Also required are reliable infrastructure, energy supplies, transport and other services, and a stable and dependable labour market. Tax and regulatory regimes must be geared to provide incentives sufficient to attract investment in these sectors while maintaining the highest possible standards of social and environmental responsibility -in other words, the essential components of sustainable development.

In an era in which we have become increasingly aware of inequities and injustices imposed on women, and of the degree to which children are still exploited in the labour market, technology based industry offers new opportunities to redress these injustices. But it will clearly take special efforts on the part of governments, employers and unions to ensure that these opportunities are realized.

Opportunities in the technology-based industrial and services sectors offer an immense potential for expansion as we move into the 21st century in areas which will not be constrained by the limitations of land and of tourist attractions that impose practical boundaries on the growth of both the tourist and agricultural sectors.

These opportunities do not come easily; nor do they remain for long. The most important long term factor in attracting and keeping these enterprises is maintenance of political stability and a reliable, consistent policy, fiscal and regulatory environment together with the availability of dependable infrastructure and services. But this will not be enough. The opportunities available to small island economies will largely be in areas that are highly sensitive to rapid changes in technology and in the marketplace for technology-based products and services. These shifts take place rapidly, producing many new opportunities while at the same time making existing activities redundant or obsolete. It therefore requires on the part of governments and local industrial and technology leaders an exceptional degree of awareness and a capacity to anticipate and respond rapidly to changes both in technology and in markets which will affect existing enterprises and open up prospects for new initiatives.

Severe strains

A primary factor in achieving sustainable development in small island states will be population growth. Rapid population growth imposes severe strains on the development process and exacerbates the problem of moving to a sustainable development pathway. It dilutes the benefits of development which accrue to individuals and tempts political leaders to opt for policies which meet immediate, short-term pressures at the expense of environmental and social costs which undermine long-term sustainability. People are clearly the principal asset of any country. But there is a practical limit on the level of population that each country can support on a basis that is sustainable in economic, social and environmental terms without imposing sacrifices on its people. Each country will have to decide, either explicitly or implicitly, what this level is and what sacrifices it is prepared to make in the quality and standard of life of individuals in order to sustain a larger population.

Migration has been an important factor in reducing the impacts of population growth in most island nations. But prospects for migration are rapidly diminishing as barriers to immigration to the wealthier countries are tightening to impede access to all but the rich or exceptionally talented.
This highlights the reality that the issues of sustainable development are integral to the fundamental processes of civilizational change in which we are now caught up. The demise of the Cold War signalled the end of the old order that had shaped international political, economic and security relations since the end of World War II. Yet a new world order-has not emerged. This is painfully obvious as the world community scrambles to meet each new international emergency with an ad hoc, and often inadequate, response. At a time when international cooperation was never more necessary to deal effectively with issues no nation, however powerful, can deal with effectively alone, the institutions of international cooperation, notably the United Nations, have been severely constrained and weakened by diminishing political and financial support.

Reversion to nationalism, parochialism and narrow self-interest can provide at best only a brief respite from the realities of an interdependent world, and will inevitably exact a heavy cost in producing new tragedies. The only conceivable answer is to refurbish, transform, and strengthen the United Nations and the existing system of multi-lateral organizations to prepare them for the vastly increased role they must have to help the world community avoid the risks and realize the benefits of our global technological civilization in the new millennium. The report of the independent Commission on Global Governance "Our Global Neighbourhood" co-chaired by Sir Shridath Ramphal, one of the most distinguished sons of this region, and former Swedish Prime Minister Ingvar Carlsson, made an extremely timely and invaluable contribution to this process. Thus far there has been little real progress in effecting the needed changes, although we can hope that the deepening sense of crisis at the United Nations may now produce a new impetus for change.

Shaping the policies

The United Nations and other multi-lateral organizations are particularly important to small nations as they provide fora in which they can participate as equals in shaping the policies and programs through which the world community deals with important global and regional issues. No country more than Barbados has demonstrated how small nations can contribute to these processes and influence them out of all proportion to their size.

Island states can be rare and precious gems in a crowded, hectic and competitive world. They can benefit by participation in the global economy without subjecting themselves to extremes of the environmental, social and human costs it exacts as the price of progress. At the same time if they do not diversify their economies, provide employment opportunities and a good quality of life for their people, they can become microcosms for the environmental degradation, social breakdown and internal conflict which can be the negative by-products of modernization and technological change. Already examples of both scenarios are emerging amongst small island states.

Barbados is leading the way as a positive example and has a great opportunity to be a role model for small island states - and others. For those that are falling behind, however, it is still not too late to make the transition to the sustainable development pathway. But it will take a deliberate and concerted effort to do so. For those who have already embarked on that pathway, the complacency that often accompanies success will be their greatest threat. For it will take continuing and sustained efforts to position yourself on the leading edge of the wave of change. Those who can do so successfully will be the beneficiaries of change; those who do not will risk becoming its victims caught up in the backwash of the tumultuous tides of change that will characterize the 21st century.