Isle of Man to help other small nations

Story here. Do small states really have the means to operate successfully in the global economy? How are they coping with the international financial crisis? Tim Cullen is executive director of the Small Countries Financial Management Centre, a newly minted, Oxford University-affiliated program on the Isle of Man.

Cullen explains that small countries are much more vulnerable to external shocks. They have fewer alternatives if things go wrong in the areas in which they specialize. Also, small countries tend not to have very diversified economies. Thus, they may be quite dependent on, for example, fisheries or the financial sector. Another disadvantage is their remoteness. In addition, because of the sheer small size of their populations, they do not have a great depth of human capacity to run their economies.

Fortunately, Cullen says, there are large countries that have reason to be attentive to the plight of their tiny brethren. For instance, he points to Canada for its particular focus on the Caribbean. Similarly, Australia and New Zealand have an interest in the Pacific nations.

Beyond the moral imperative, Cullen points out a practical incentive for caring: Some small countries have become transit points for the illegal movement of money. If they have weak regulatory systems and lack the capacity to administer anti-money-laundering schemes and counter the financing of terrorism, they are naturally going to become targets for criminal and terrorist organizations. Finally, he echoed the climate-change dilemma, especially for tiny islands. In light of those challenges, Cullen says he is impressed at how relatively well many small countries do.

Cullen knows from experience what he is talking about; his own home, the Isle of Man – a self-governing British Crown dependency located in the Irish Sea – with a population of 80,000, is part of the small-states club. He admits the island has had the good fortune of solid institutions, including a parliament that has met continuously for more than 1,000 years, and a legal system based jointly on United Kingdom and Scandinavian sources. Even so, three decades ago, the Isle of Man faced a predicament. Most of its land was agricultural, yet that sector contributed minimally to the island’s economy. Further complicating the economic outlook was that many tourists discovered they could fly to Spain or other warm spots for about the same cost as an Isle of Man visit. Those circumstances prompted the island to diversify into new areas: financial services, film-making and ship registration. The result is a robust economy in the 21st century.

Now, Cullen says, the Isle of Man seeks to be part of the solution for other small countries’ troubles. Along with Oxford University’s Said Business School, the World Bank and other partners, it has embarked on an innovative education program. Each year, it gives officials who work in small-country finance ministries, central banks and financial regulatory bodies an opportunity for cost-free, intensive training with some of the best professors and practitioners in the world – specialists who would not ordinarily be available to them.

Also: ( )