The role of financial services in the economic development of small island jurisdictions

Abstract

Many small islands, some of which are independent states, have a relatively large financial sector and several of them have also made a name for themselves in financial services. The objective of this dissetiation is to analyse the role of the financial sector in the economic development of small island jurisdictions. It draws on an original sample survey carried out specifically for this study. Despite the limitations encountered, several interesting results emerged The analysis reveals that the financial section can become the blood stream of the economic machinery of many small jurisdictions in today's global economy. It also provides an insight on the contribution of this sector to their gross domestic product and their most important financial services offered both to residents and non-residents. This analysis also identifies why the financial sector in small islands jurisdictions tends to be relatively large, and what strategic measures need to be adopted in order to overcome the major constraints faced by small jurisdictions in this sector. Moreover, this dissertation identifies that a large number of small island jurisdictions claim that international standards and regulations by international standard-setting organisations are imposing heavy burdens on small states. Hence, it follows that small island jurisdictions need to monitor a strategically defined financial service quality programme, and nurture their roles in multilateral systems for international monetary cooperation, where every jurisdiction is represented in a fair and open way.