Vulnerability and resilience : concepts and indicators for economies with a high agricultural import content

Abstract

Economic vulnerability is associated with exposure to exogenous shocks, related to the inherent characteristics of a particular economy, such as high degrees of economic openness, export concentration and dependence on strategic imports. The exposure is considered to be permanent or quasi-permanent and cannot be assumed to be responsive to policy measures. Economic resilience, on the other hand, refers to the ability of an economy to recover from or adjust to the negative impacts of external economic shocks. Thus the risk of being adversely affected by an exogenous shock is a function of two elements, the first is associated with the inherent conditions of the country that is exposed to the shocks and the second associated with conditions developed to absorb, cope with or bounce back from external shocks. This paper will discuss the concepts of vulnerability and resilience, which have been extensively researched in small states studies, and their relevance for economies with a high agricultural import content. There are obvious vulnerability connotations when a country depends heavily on agriculture, especially on imported food for consumption. It can be argued that where resilience is typically weak, vulnerability tends to retard growth in the initial phases of development, thereby contributing to slow down convergence between developed and developing countries. Thus, in the absence of resilience building policies, countries with a high vulnerability due to high agricultural import content may suffer adverse effects on economic growth.