Introduction
The Small States Network for Economic Development (SSNED) is a South-South small state mechanism that works to promote (i) the sustainable development of small states and their more effective integration into the rapidly evolving global economy, and (ii) the increased integration of the concerns and interests of small states into the policies and programmes of the international community.

Our operational interventions are demand-driven, based on comparative advantage, and selectively focused on the following five core themes:
  • building the capacity of public sector institutions to modernize the domestic economy and facilitate its more effective integration in the global economy
  • developing private sector capacity needed to promote international competitiveness
  • encouraging private-public partnerships to support the efficient provision of public services
  • addressing environmental sustainability and natural disasterconcerns
  • strengthening outreach and knowledge building/sharing among small states.
Our approach is principally built on South-South peer exchanges of expertise between small states, in recognition of the fact that the particular challenges common to small states (e.g., they are relatively susceptible to exogenous shocks and natural disasters, have economies that are simultaneously open and unable easily to diversify) have necessarily encouraged them to devise appropriately focused and scaled approaches to their challenges.

The remainder of this document describes in greater detail the origin of the Network, our mission, guiding principles, core focal themes, comparative advantage, implementation methodology, and performance measurement orientation. Annex 1 outlines activities related to our core focal themes that, depending upon available human and financial resources, form an indicative basis of a practicable work programme for 2009-2011. The suggested activities derive from extensive consultations with small states and regional organisations. Annex 2 describes the implementation approaches process of the Network and some of the activities of the Network’s Secretariat.

Background
Meeting in Singapore during the World Bank/International Monetary Fund Annual Meetings, members of the 2006 Small States Forum unanimously adopted a Resolution endorsing the establishment of a Small States Network for Economic Development (SSNED) in line with a proposal put forward by Malta, and tasked a Working Group of the Forum to develop a governance framework for the Network. The Network was activated on the eve of the 2007 Small States Forum and was subsequently legally registered in Malta, where it maintains its offices. To guide the development and management of a dynamic work programme that has the flexibility to respond to the changing needs of the Network’s membership, and to provide potential donors with sufficient information to assess its direction and intentions, the Network has developed this Strategic Framework, as directed by its Board of Trustees in their second meeting, held in Malta in the spring of 2008. The Framework is intended to be both descriptive of selective intent and aspirational, in recognition of the fact that until the Network’s funding level becomes clarified, it is impossible to set precise goals for, and boundaries on, its activities.

Mission
The Network’s mission is to facilitate the exchange of ‘good practice’ among small states, to promote the increased integration of the concerns and interests of small states into the policies and programs of the international community, to undertake or support such related actions as will further these goals and the sustainable development of members, and to foster development cooperation among small states. Specifically the SSNED will:
  • Act as a clearing house to facilitate the sharing of expertise and technologies specific to small states, so as to provide countries with just-in-time services on specific policy and institutional development.
  • Promote appropriate training opportunities utilising the considerable experience and expertise available in the small states.
  • Build an inventory of experts to enable experts from successful states to share their expertise in order to help other small states in their development projects, and to promote competitiveness and resilience building.
  • Provide a more continuous channel of communication among small states and between small states and the World Bank and other development institutions.
  • Support the World Bank-sponsored Small States Forum.
  • Reinforce the voice of small states, not only in the international arena generally but also within multilateral and bilateral organizations that support their development efforts.
  • Discuss issues and seek solutions on matters of interest to small states, identifying, disseminating and utilising existing and fresh research.
Guiding Principles
The following principles will guide and inform the work of the SSNED.
  • The programme of activities will reflect the agreed development priorities of Network members countries, and the benefits of membership will be accessible by all interested Network members.
  • The expertise and experience that resides within small states will be drawn upon to the maximum extent possible, in recognition of the fact that the particularities of small states (e.g., they are relatively susceptible to exogenous shocks and natural disasters, have economies that are simultaneously open and unable easily to diversify, and suffer from ‘indivisibilities’ of overhead expenditures, because these cannot be downscaled to population size) have necessarily encouraged them to devise appropriately focused and scaled approaches in line with their challenges.
  • The programme of activities will be practical, selective (in recognition that the Network is but one of many institutions active on the development front), and driven by comparative advantage.
  • The mobilization of resources for this programme will be based on additionality and should not result in the diversion of existing funding to small states.
Core Focal Themes
The specific activities to be incorporated into the Network’s work programme will be determined through consultation with members. However to ensure selectivity, it will be important that the programme reflects comparative advantage and remains focused on the following core themes:
  • building the capacity of public sector institutions to modernize the domestic economy and facilitate its more effective integration in the world economy
  • developing private sector capacity needed to promote international competitiveness
  • encouraging private-public partnerships to support the efficient provision of public services
  • addressing environmental sustainability and natural disaster concerns.
  • strengthening outreach and knowledge building/sharing among small states.

Comparative Advantage
To fulfil its mission, and given the scale at which the Network is expected to operate, it is important that the operational areas and issues where the Network enjoys comparative advantage be identified, so as to maximize the potential benefits Network can provide to small states. More generally, the Network’s comparative advantage lies in two features:

  1. it is owned and run by the small states themselves, and is therefore deeply familiar with the challenges facing small states and with the individuals who have relevant expertise specifically scaled to small states, and

  2. It benefits from its informality, flexibility, and minimal organizational structure.
Implementation Methods
In fulfillment of its mission, guided by its principles, reflecting its thematic focus, and based on comparative advantage, the Network will finance specific interventions. The process of determining specific interventions and appropriate methodology is described in Annex 2. While the form of implementation will be dictated ultimately by a judgment as to the best way to address a particular challenge in light of resources available, some implementation methods are likely to be particularly beneficial. These include:

Twinning – twinning small state institutions with low capacity with small state institutions that have mature policies and processes provides many advantages, including the building of long-term dynamic and constructive relationships, and peer-to-peer learning that is often more resource- and cost-effective than traditional technical assistance approaches.

Education, training, and advocacy – In many cases, activities will have principally education, training, or advocacy objectives, taking existing work and making it accessible to Network members. Further, in keeping with the practical focus of the program, even where activities are research-based, it is expected that they will have education, training and/or advocacy/information dissemination elements to ensure that activity deliverables are communicated and applied.

Technical assistance – Traditional technical assistance models may be applicable in some situations. Again, however, in the spirit of the Network’s objectives, every effort will be made firstly to identify technical support from within small states, including drawing on small state regional centres of excellence, before seeking expert advice and assistance from wider afield. In utilizing technical assistance, every care will be taken to ensure that known pitfalls (dependency, unnecessary output complexity, lack of absorptive capacity) are considered and managed.

Performance Management
It is important that the SSNED be able to demonstrate its effectiveness in contributing to improving the development outcomes for its small state membership, and that the associated expenditures represent value for money. The monitoring and evaluation of performance will be undertaken at two levels:
  • At the activity level – ensuring that the products of individual activities achieve the outcomes specified in the proposal approved by the Board of Trustees
  • At the Network level – ensuring that the Network is delivering the outcomes for which it was established.

At the activity level, the Secretariat will ensure that the objectives/anticipated outcomes proposed align with agreed Network-level outcomes. Importantly, each activity proposal will need to articulate clearly how the successful achievement of the specific outcomes described will contribute to achieving Network-level outcomes. The Secretariat will monitor and evaluate the quality of the outputs and outcomes/results achieved and report on these to the Board of Trustees.

To systematically assess performance, the Secretariat will develop a performance framework that articulates a set of expected outcomes/results that align with the Network’s objectives. Performance and expenditure reporting against this framework will be provided regularly to the Board of Trustees and to the wider Network membership on an annual basis. Potential areas of focus have been grouped under the four core themes. These areas have emerged from an initial round of consultations, with suggestions unconstrained by resource considerations; however, it provides a useful guide to members’ expressed priorities. The evolving work programme of the Network will reflect agreed priorities of member states and available financial and management resources.

In keeping with the SSNED’s ‘just-in-time’ service philosophy and recognising the potential for new issues to emerge and priorities to change and for variable responses to proposals by financial and technical partners, it is anticipated that the work programme will be a living document that may evolve during the course of its two-year timeframe.

Core Theme 1 -    Building the capacity of public sector institutions to modernize the domestic economy and facilitate more effective integration in the world economy

  1. Assisting governments of small states to develop taxation arrangements, drawing on the experiences of other small states where the migration from one type of tax regime to another has been successfully implemented. Such arrangements are especially needed in small states that must manage the reduction in government revenue resulting from the implementation of trade liberalization policies.
  2. Supporting governments of small states to put in place or modernize competition and regulatory frameworks taking into account the constraints arising from small domestic markets, including the high natural market entry barriers.
  3. Working with the governments of small states to profile the causes and symptoms of their economic vulnerability and to help identify and introduce macro- and micro-economic policies that are conducive to building resilience to the vagaries of operating in a global economy.
  4. Supporting governments of small states to upgrade the capacity of national and regional statistics offices, to produce timely information relevant to their social and economic development.
  5. Facilitating cooperation among small states in the building and furtherance of regional integration processes, especially in areas where pooling of resources could lead to enhanced efficiency and effectiveness.
  6. Helping small states to share experience and expertise relating to diversifying their sources of capital by increasing their access to on-shore capital markets.
  7. Assisting LDC small states in making a case for assigning increased weighting to economic and environmental vulnerability in determining their graduation out of the LDC status.
  8. Helping governments of small states in developing e-government and e-learning arrangements.
Core Theme 2 - Developing private sector capacity needed to promote international competitiveness
  1. Facilitating collaboration between the private sector and the public sector to reduce the cost of doing business by, for example, speeding up business start-ups and registration procedures, putting in place one-stop shops for permits, and improving access to capital for small enterprises.
  2. Developing the institutional capacity needed by the private sector to compete effectively in world trade, including the ability to meet quality standards, through such things as the provision of technical assistance at the enterprise level.
  3. Enabling SMEs to access development assistance designed to support micro-level transformation.
  4. Assisting consultants and enterprises from small states to participate effectively in the global knowledge supply chain by fostering collaborative arrangements with relevant actors internationally.
Core Theme 3 - Encouraging private-public partnerships to support the efficient provision of public services
  1. Assisting governments and the private sector to identify services that might be better delivered in partnership than by government alone.
  2. Assisting small states in formulating public-private partnerships to deliver services drawing from shared expertise and experience and providing assistance related to the methodological, legal, institutional, and technical aspects of such partnerships.
Core Theme 4 - Addressing environmental and natural disaster concerns
  1. Assisting small states to develop strategies for sustainable development taking into account their special environmental concerns. In this context, assist small states to develop participatory and consultative schemes to foster ownership of the sustainable development strategies among stakeholders.
  2. "Helping small states devise schemes and share expertise in the use of renewable energy, energy efficiency initiatives, and carbon sharing.
  3. Supporting small states to develop early warning systems, insurance schemes, and disaster recovery mechanisms possibly in collaboration with larger countries in their region, within the context of a regional approach to disaster management.
Core Theme 5 - Strengthening outreach and knowledge building/sharing among small states
  1. Providing training in areas of major concern to small states that reflect the Network’s core focus.
  2. Disseminating information and research relating the Network’s core focal themes and contributing to the development of such information and research.

Operational Approach to Implementation
The following processes will guide the SSNED Secretariat’s execution of a prioritized work program.
  1. A detailed activity proposal will be drafted for each activity that clearly defines its purpose, intended outcomes, target beneficiaries, and concrete deliverables; proposes the way in which the work will be undertaken; provides an estimate of resource costs (technical and financial) and suggests a timeframe for completion of work.
  2. Preliminary discussions will be held with potential financial and technical partners with a view to confirming the feasibility of undertaking the activity.
  3. An outline proposal of the activity will be presented by the Secretariat to the Board-appointed sub-committee comprised of the Board Chair and representatives of the Board’s two Founding Partners, for approval in principle.
  4. On approval of the outline proposal by the aforementioned sub-committee, the Secretariat will fully cost the proposal, in consultation with the beneficiary state and potential implementing partners.
  5. The aforementioned sub-committee will reassess the feasibility of the project and provide the full Board with its recommendation of endorsement or rejection, on a no-objection basis with due notice.
  6. Failing objection of recommendations within an agreed timeframe, the Secretariat will (for activities approved) initiate and oversee implementation of the activity and ensure that work conforms to ToRs, contracts, memoranda of understanding, etc.
  7. On completion, the outcomes of the work will be reported to the Board of Trustees with respect to the specific deliverables provided to the target beneficiaries.
  8. At an agreed point after completion, a post-completion review of the activity will be undertaken to determine whether the impact of the activity has been in line with the outcome(s) anticipated in the original proposal.
Other Activities
In addition to managing the implementation of project-specific activities, the Secretariat will also provide management and business support functions. These will include:

  • development and updating of a register of institutions and experts that have particular capacities in relation to the core focal themes as they relate to the specific conditions experienced in small states
  • facilitation of contacts among individuals and institutions in small states to foster mutual information exchange and the building of productive relationships
  • provision of advocacy, advice and support for members seeking assistance from multilateral bodies such as the World Bank, UNDG, etc.

    This work will be supported by the establishment and maintenance of a SSNED website that will provide information to Network members, other small states, and other interested parties.