RESTRICTED  
  
WT/COMTD/SE/W/45  
 
14 February 2023 
(23-1051) Page: 1/98 
Committee on Trade and Development  
Dedicated Session    
 
  
INTEGRATING SMALL ECONOMIES INTO THE POST COVID -19 ECONOMY:  
EFFECTS OF THE PANDEMIC, CHALLENGES AND OPPORTUNITIES  
BACKGROUND NOTE BY THE SECRETARIAT1 
TABLE OF CONTENTS  
1   EXECUTIVE SUMMARY  ................................ ................................ ................................ . 2 
2   INTRODUCTION  ................................ ................................ ................................ ..........  6 
3   TRENDS IN MERCHANDISE AND SERVICES TRADE  ................................ ......................  6 
3.1   Long-term merchandise trade trends  ................................ ................................ ............  6 
3.2   Major Small Economies’ traders  ................................ ................................ ...................  9 
3.3   Trends in product composition  ................................ ................................ ....................  11 
3.3.1   Trade in intermediate goods  ................................ ................................ ....................  13 
3.4   Major markets of Small Economies  ................................ ................................ ..............  18 
3.5   Trends in services trade  ................................ ................................ ............................  20 
4   EFFECTS FROM THE COVID -19 PANDEMIC ON SMALL ECONOMIES' TRADE  ................  26 
4.1   Short -term merchandise trade trends  ................................ ................................ ..........  26 
4.2   Effects of rising commodity prices, inflation, supply chains disruptions  .............................  31 
4.2.1   Rising commodity prices  ................................ ................................ .........................  31 
4.2.2   Inflation  ................................ ................................ ................................ ...............  39 
4.2.3   Supply chains disrup tions ................................ ................................ ........................  47 
4.3   Short -term services trade trends  ................................ ................................ ................  56 
4.4   Digitalization and E -Commerce  ................................ ................................ ...................  63 
4.5   Foreign Direct Investment (FDI)  ................................ ................................ .................  73 
5   CHALLENGES AND OPPORTUNITIES IN THE POST -COVID -19 RECOVERY PHASE  ....... 84 
ANNEX: SMALL ECONOMIES ECONOMIC AND TRADE PROFILE  ................................ ....... 88 
 
  
 
1 This document has been prepared under the Secretariat's own responsibility and is without prejudice 
to the positions of Members or to their rights and obligations under the WTO.  WT/COMTD/SE/W/45  
 
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  1  EXECUTIVE SUMMARY  
1.1.  This document has been prepared pursuant to the Ministerial Decision on the Work Programme 
on Small Economies adopted at the Twelfth WTO Ministerial Conference. It is based on an outline 
proposed by the Group of  Small, Vulnerable Economies (SVEs) which was agreed by the Committee 
on Trade and Development meeting in Dedicated Session on Small Economies.  The members of the 
SVE Group are used as the basis for the statistical analysis. For purposes of this document, the term 
"SVEs" refers to the members of the SVE Group.  
1.2.  Between 2010 and 2019, the volume of merchandise exported by SVEs rose 3.0 % on 
average per year, slightly above the world average (2.7 %), and almost at the same pace 
as imports (2.9 %). SVEs exports growth peaked at 9.2 % in 2011 as trade continued to bounce 
back from the global financial crisis. Over the following five years, trade growth slowed as the global 
economy cooled in the aftermath of the so -called emerging markets slowdown.  
1.3.  SVEs' volume export growth remained weak in 2017 and 2018,  before picking up to 
3.1% in 2019. Imports growth rebounded to 5.2 % in 2017 to slow to -0.4% by 2019. The weakness 
of trade between 2017 and 2019 can mostly be explained by heightened trade tensions,  which 
weighed increasingly on global import demand in the lead up to the COVID -19 pandemic.  
1.4.  In 2019, SVEs ' merchandise exports reached USD 136.6 billion in value terms , up from 
USD 107.4 billion in 2010 , rising by 2.7 % on average per year. The group's me rchandise imports 
expanded at 3.1 %, a more rapid pace than in other economies (2.5 %). In 2019, SVEs' merchandise 
imports reached USD 207.4 from USD 158.2 billion in 2010.  SVEs are net merchandise 
importers.  
1.5.  Despite dynamic growth, SVEs ' participation in g lobal merchandise trade remained 
below 1 %. SVEs' share in global merchandise exports increased only from 0.70 % to 0.72 % in nine 
years, and from 1.02 % in 2010 to 1.07 % in imports. Trade concentration is an important reason.  
1.6.  SVEs ' merchandise trade is domin ated by just a few players.  The ten leading exporters 
accounted for 81.8 % of the group's total exports in 2019. Ecuador was the largest trader with a 
16.3% share in exports and 10.9 % in imports in 2019. Sri Lanka (8.7 %) and Papua New Guinea 
(8.3%) followed  as leading exporters. Panama (10.4 %) and the Dominican Republic (9.8 %) were 
the second and third major importers.  
1.7.  SVEs' merchandise exports are largely driven by primary commodities, accounting for 59.7 % 
of the group's exports in 2019, a relatively stable share over the period. Fuels (22.3 %), food 
products (27.2 %) and ores and minerals (7.3 %) were the main exported products. Manufactures 
accounted for the bulk of imports  (61.4% in 2019 ).  
1.8.  Over the years, SVEs ' participation in global trade in non -fuels intermediate goods 
was stagnant at only 0.6% for exports and 0.9 % for imports.  This suggests low integration 
as a group in value chains. Gold, copper ores, coffee, and iron ores  were the main exported 
interm ediate goods . Papua New Guinea, the Plurinational State of Bolivia, and t he 
Dominican  Republic, were the three main exporters.  
1.9.  SVEs trade only with a few countries . The leading ten partners accounted for over 70 % of 
SVEs'  total exports in 2019. The United  States (27.0 %), the European Union (13.1 %), and China 
(12.2 %) were the main destinations.  
1.10.  Between 2010 and 2019, SVEs enjoyed a period of rapid services growth, with exports rising 
by 6% on average per year, somewhat above the rest of the world (5 %). In 2019, SVEs' services 
exports reached USD 84.0 billion, up from USD 49.9 billion in 2010, while imports expanded 
from USD 33.7 billion in 2010 to USD 54.7 billion in 2019. SVEs are net services exporters.  
1.11.  However, similarly to merchandise trade, the participation of SVEs in global services 
exports remained  very modest over the years, at 1.3 -1.4%. SVEs' share in imports was 
even lower, at 0.9 % in 2019.  Panama was the main services exporter (16.5 %) followed by Cuba 
(12.2 %), and the Dominican Republic  (10.7 %).  WT/COMTD/SE/W/45  
 
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  1.12.  Many SVEs are tourism driven.  Foreign travellers' expenditure during their stay in SVEs 
formed  the bulk of services exports  (55.1% in 2019, up from 48.0% in 2010) , followed by o ther 
commercial services  (22.4%), transport (1 7.9%), and goods -related services (4.6%) . According to 
estimates , in 2019, the United States was the main export destination (27.0 %), followed by the 
European Union (21.7 %) and the United Kingdom (5.5 %).  
1.13.  In early 2020, the COVID -19 pandemic resulted in unprecedented demand and 
supply shock s on commodity markets.  Border closures, lockdowns, and reduced industrial 
activity disrupted global supply chains and affected commodity prices, particularly of energy 
products, which fell sharply. As economic activity  recovered, the demand for energy spiked. Food 
commodities prices, especially for grains, also started to increase. In early 2022, the onset of the 
war in Ukraine and resulting geopolitical tensions added to supply -side issues in a context of high 
demand.  
1.14.  Volatility in commodity prices has significant effects on SVE trade as half of the se 
economies  are commodity dependent. Product concentration and a high reliance on commodity 
export revenues, increase SVEs' vulnerability to shocks. In 2020, SVEs ' merchand ise trade 
volume, as average of exports and imports, declined by 12.7 %, compared with -5.3% for 
the world. SVEs exports volumes dropped by 8.4 %, and imports by 17.0 %.  
1.15.  In value terms, SVEs ' merchandise exports fell by 10.7 % to USD 122 billion . Imports 
contracted by 20.3 % to USD 165.4 billion . These declines were sharper than in the rest of the 
world where the value of merchandise trade fell on average by 7.3 %. In 2020, real GDP contracted 
by 6.5 % in commodity dependent SVEs, more than twice than in the rest of the world 
(-3.0%). 
1.16.  In 2021, merchandise trade volume rebounded quickly,  with exports and imports 
growth at 5.2 % and 19.3 % respectively. SVEs ' exports and imports exceeded pre -pandemic 
levels , reaching USD 158.1 billion for exports and USD 226.4 billion for imports. In comparison with 
other countries, SVEs ' merchandise trade recovered faster, increasing in value by 29.6 % for exports  
and 36.9 % for imports respectively (compared with 26.5 % and 2 6.3% for world).  
1.17.  In the first half of 2022 the value of SVEs' total merchandise trade was abov e 2019  
levels , by 40 % for exports and 27 % for imports.  SVEs benefitted from the boost in global 
demand and higher energy prices. On the other hand, other SVEs were affected by higher oil prices.  
1.18.  According to the WTO's trade forecast of October 2022, exports volume growth in 
SVEs was expected to slow to 5.0 % in 2022, and to 3.2 % in 2023. Import growth was 
estimated at 8.1 % in 2022 and finally to 2.2 % in 2023 . However, trade projections are highly 
dependent on the course of the war in Ukraine and should be interpreted with caution.  
1.19.  The COVID -19 pandemic and the war have disrupted the decade -long steady decline 
in inflation globally.  Expansionary fiscal and monetary measures implemented to help firms and 
households withstand income losses due to the pandemic, especially in advanced economies, 
boosted consumers' sp ending on goods, as access to services was restricted.  
1.20.  Uneven recovery from COVID -19 in different parts of the world and between 
different industries resulted in shortages of multiple products, increasing the cost of 
essential inputs.  Pandemic -related  supply restrictions in a context of high demand  created shipping 
and logistics bottlenecks which boosted  global  freight transport prices. In 2021, SVEs faced a 
48% surge in international shipping costs, significantly more than in the rest of the world 
(33%). SVEs were  affected by the disruption in supply chains due to the war in Ukraine  as many 
among them depend on imports of wheat, corn , and vegetable oils traded through the Black Sea.  
1.21.  Inflation in SVEs is mainly driven by exogenous factors such as the rise in global energy and 
food prices. I nflation in SVEs  picked up over the past two years , following historically low rates. 
Average inflation rate in consumer prices reached 7.2 % in 2021 from only 1.3 % in 2020. 
In 2022, inflation reached an average of 8. 1% in October 2022  in 23 SVEs . Food price inflation 
ranged  between 10 % and 20 % in several SVEs in October 2022. Transport inflation 
reached up to 24 % in some SVEs  in the same period , due to their geographical 
remoteness . The IMF  projects inflation to decline in 2023 . The evolution of the war in Ukraine , as WT/COMTD/SE/W/45  
 
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  well as geopolitical tension s in other parts of the world is an important  factor  as it will have a 
significant impact on energy prices globally.  
1.22.  Restrictions to the cross -border movement of people  to fight the pandemic hit hard services 
globally. In 2020, SVEs, services exports dropped 47 % to USD 44.2 billion , due to 
collapsing international travel. SVEs were significantly more affected than the rest of the 
world ( -17%) due to their excessive reliance on international tourism as source of 
revenue . Travel receipts remained depressed  through 2 021 but rebound ed through the third quarter 
of 2022  in many SVEs,  as global tourism recovers . 
1.23.  In 2020, SVEs' transport exports declined by 33 %, largely due to a 70 % drop of air 
passenger transport services. Sea transport services, in fact, were only marginally affected . On the 
imports side, short-term data shows  that transport prices have stopped rising in the 
third  quarter  of 2022 in some SVEs and stabilization is underway .  
1.24.  In 2020, SVEs  saw declines even in other commercial services e xports ( -12%), 
unlike the rest of the world (+1 %). By the end of 2021, most subsectors had not recovered to 
2019 values, except for computer services (+31 %), and insurance services (+4 %). SVEs lag in 
participation in global exports of digitally delivered services.  Stunted growth poses 
challenges for the ir integration into regional and global value chains.   
1.25.  Foreign direct investment was not spared by the COVID -19 pandemic. In 2020, FDI inflows 
fell by 35 % globally . SVEs receive only a small fraction of global FDI, some  1.4% or 
USD 21.5 billion on average in the three years preceding the pandemic.  Panama was the 
largest recipient  with 20.7 %. In 2020, FDI inflows into SVEs declined  by 36 % to 
USD 13.3 billion . In 2021, FDI flows to SVEs recovered almost to pre -pandemic levels reaching 
USD 19.1 billion.  
1.26.  The pandemic affected FDI into SVEs unevenly. Some countries suffered a very 
sharp contract ion while a few received more FDI in 2020 than in 2019.  However, only some 
were able to maintain it in 2021, highlighting the difficulty in attracting investment  in the current 
economic context. In 2020, the number of greenfield investments also dropped  both in numbers 
and in value . 
1.27.  Overall, t he COVID -19 pandemic represented a real shock to the global economy , 
which made it more inflationary than earlier economic crises. High commodity prices have 
benefitted SVEs that are net exporters of natural resources while net importers were hurt . 
However, gains to net exporters may be unsustainable over the medium -to-long term. While the 
promotion of extractive industry is c rucial to many SVEs, they need to ensure that these 
resources are not over -exploited  and attracting investment to boost economic development does 
not cause long -term harm to the environment.  
1.28.  The pandemic and the conflict in Ukraine have exposed the fragil ity of the global 
food system, which has been particularly strongly felt in SVEs given their reliance on imported 
food.  Climate change  could further exacerbate these vulnerabilities as it will increase the frequency 
of acute weather events such as drought , heatwaves, floods, etc.  
1.29.  As the real factors that have contributed to recent spikes in inflation are exogenous to SVEs, 
the use of monetary policy, while necessary, might not be sufficient to counteract price pressures. 
Calibrating the right mix of polic y to boost post -pandemic recovery against the backdrop 
of high inflation, limited fiscal space, and a difficult geopolitical context represents a 
challenge to policymakers in SVEs.   
1.30.  Digitali zation, which was accelerated by the COVID -19 pandemic,  is crucial  for 
maintaining international competitiveness . Although SVEs benefitted  from higher Internet 
usage, digital infrastructure remained weak. An important trend emerging in the outsourcing 
industry is the move toward automation and higher value -added services . Upgrading the labour 
force could strengthen the position of SVEs within regional and global value chains.  In addition, 
SVEs need to take steps to ensure inclusive digital development within their own 
countries.  Data highlights the continued inaccessibili ty of digital technologies for women.  WT/COMTD/SE/W/45  
 
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  1.31.  Many SVEs are highly dependent on tourism. As the sector continues to  recover  from the 
COVID -19 pandemic, it might be prudent for SVEs to diversify the ir tourism  industries  by 
targeting new types of customers interested in niche activities such as eco -tourism, wildlife tourism, 
etc. and widen their source markets. The recent re -opening of Chinese borders can be an 
opportunity .  
  WT/COMTD/SE/W/45  
 
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  2  INTRODUCTION  
2.1.  This document has been prepared  pursuant to the Ministerial Decision on the Work Programme 
on Small Economies adopted at the Twelfth WTO Ministerial Conference (WT/MIN(22)/25 - 
WT/L/1136). The Decision, inter alia , instructs that work be undertaken on "integrating small 
economies into t he post COVID -19 economy: effects of the pandemic, challenges, and 
opportunities".   
2.2.  The present document is based on an outline proposed by the Group of Small, Vulnerable 
Economies (SVEs) (WT/COMTD/SE/W/44), which was agreed by the Committee on Trade and 
Development at its 43rd Dedicated Session on Small Economies held on 20 May 2022. The members 
of the SVE Group, as listed on the WTO website2, are used as the basis for the statistical analysis. 
For purposes of this document, the term "SVEs" refers to the members of the SVE Group.  
3  TRENDS IN MERCHANDISE AND SERVICES TRADE  
3.1  Long -term  merchandise tra de trend s 
3.1.  Between 2010 and 2019, the volume of merchandise exported by SVEs rose 3.0 % on 
average per year , almost at the same pace as imports (2.9 %).  Export growth peaked at 
9.2% in 2011 as trade continued to bounce back from the slump that accompanied the global 
financial crisis. Import growth peaked in 2010 at 12.0 % but remained strong in 2011 at 11.4 %. As 
a result, exports of SVEs registered a 30.3 % cumulat ive increase during this period while imports 
jumped 28.6 %. 
3.2.  Trade growth in SVEs slowed over the  following five years, culminating in a 1.8 % decline in 
exports and a 3.1 % contraction in imports in 2016 as the global economy cooled in the aftermath 
of the so -called emerging markets slowdown. Export growth remained weak in 2017 and 2018, 
before picking up to 3.1 % in 2019. Imports growth rebounded to 5.2 % in 2017 but then slo wed to 
-0.4% by 2019. The weakness of trade between 2017 and 2019 can mostly be explained by 
heightened trade tensions, which weighed increasingly on global import demand in the lead up to 
the COVID -19 pandemic.  
 
2 https://www.wto.org/english/tratop _e/dda_e/negotiating_groups_e.htm . At the time of writing, the 
SVE Group consists of the following 32 WTO Members and one Observer. WTO Members :  Antigua and 
Barbuda, Barbados, Belize, Plurinational State of Bolivia, Cabo Verde, Cuba, Dominica, Dominican R epublic, 
Ecuador, El Salvador, Fiji, Grenada, Guatemala, Guyana, Honduras, Jamaica, Maldives, Mauritania, Mauritius, 
Mongolia, Nicaragua, Panama, Papua New Guinea, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the 
Grenadines, Samoa, Seychelles, Sri  Lanka, Tonga, Trinidad and Tobago, Vanuatu. Observer : The Bahamas.  WT/COMTD/SE/W/45  
 
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  Chart 1: Merchandise trade volume growth of SVEs, 2010 -2019  
(Annual percentage change)  
 
Source:  WTO estimates based on WTO Stats portal.  
3.3.  Trade volume growth of SVEs was slightly faster than trade growth for the world 
between  2010 and 2019 : 3.0% for SVE merchandise  exports and 2.9 % for SVE merchandise 
imports compared to 2.7 % for world trade as measured by the average of exports and imports. 
Trade volume growth in SVEs during this period was less than their average GDP growth rate of 
3.9% but roughly in line with wo rld GDP growth, which averaged 3.0 % annually between 2010 and 
2019.  
Chart 2: Merchandise trade volume and real GDP growth, 2010 -2019  
(Average annual percentage change)  
 
Source:  WTO estimates based on WTO Stats portal ; consensus est imates for GDP.  
3.4.  In value terms, b etween 2010  and 2019, SV E merchandise exports increased  slightly 
above global trends , rising by 2.7 % on average per year (2.4 % for the rest of the world), to 
USD 136.6 billion,  up from USD 107.4 billion recorded in 2010. The group's merchandise imports 
expanded  at a more rapid pace (3.1 %) than in other economies (2.5 %). In 2019, SVEs'  
merchandise i mports reached  USD 207.4 from USD 158.2 billion in 2010 .   
WT/COMTD/SE/W/45  
 
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  Chart 3: Evolution of SVEs merchandise trade, 2010 -2019  
(Billion US dollars)  
 
Source:  WTO estimates  based on WTO Stats portal . 
3.5.  SVEs are net merchandise importers.  Their trade deficit increased from USD 50.7 billion in 
2010 to USD 70.8 bi llion in 2019. The highest deficit was reached in 2018 (USD 76 billion ). 
Chart 4: SVEs m erchandise trade balance, 2010 -2019  
(Billion dollars)  
 
Source:  WTO estimates based on WTO Stats portal.  
3.6.  Between 2010 and 2019, SVEs  participation in  global merchandise trade remained 
below 1 %, with a peak of 0.95 % in 2015 and a low of 0.86 % in 2010. On the exports side, SVEs'  
share increased from 0.70 % in 2010 to 0.72 % in 2019 , peaking at 0.7 8% in 201 4. In c omparison, 
SVEs' imports reached higher shares in world, between 1.02 % in 2010 and 1.15 % in 2015 – to 
1.07% in 2019.  
WT/COMTD/SE/W/45  
 
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  Chart 5: SVEs participation in global  merchandise trade, 2010 -2019  
(Share in world ) 
 
Source:  WTO estimates based on WTO Stats portal.  
3.2  Major Small Economies’ traders  
3.7.  SVEs ' merchandise trade is dominated by a few players , with concentration 
increasing over the years.  The ten leading  SVEs merchandise exporters accounted for 80.6% of 
the group's merchandise exports in 2010 and 8 1.8% in 2019. Ecuador was the top exporter with an 
unchanged 16.3% share in SVEs' exports in both 2010 and 2019 . Panama was the second leading 
exporter in 2010 with a 10.2 % share. However, Panama's contribution  within the group in 2019 
contracted to 8.3 %, as exports growth slowed, and it was  overtaken by Sri Lanka  (8.7%). 
Papua  New Guinea ranked t hird as merchandise exporter (8.3%), up from the 9th position  in 2010 
and a 5.3% share. Amongst the  leading  ten exporters in 2019, Papua New Guinea and Mongolia saw 
the largest increases in share.  The latter rose from the 13th position in 2010.  
3.8.  Merchandise imports were equally concentrated  with the leading 10 importers making up 
for 75% of SVEs merchandise imp orts in 2019, down from 77 % in 2010. In both 2010 and 2019, 
the three leading importers were Ecuador (share of 13 .0% in 2010 and of 1 0.9% in 2019), Panama 
(10.6% and 10 .4%) and the Dominican Republic ( 9.8% in both years). Sri Lanka increased its share 
by 1.1 percentage points between 2010 and 2019,  and Guatemala by 0.8 percentage points.  
WT/COMTD/SE/W/45  
 
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  Chart 6: Leading S VE merchandise traders , 2010 and 2019  
(Percentage shares)  
 
Source:  WTO estimates based on WTO Stats portal.  
3.9.  Among the leading 10 SVE exporters  in 2019 , the highest average period export growth was 
recorded in Mongolia (11 .3%), Papua New Guinea ( 7.9%) and the Dominican Republic ( 5.8%). Only 
Trinidad and Tobago saw a contraction  (-5% per year) mainly  due to  reduction in oil  production over 
time. All leading merchandise importers  expanded over the nine-year period , from 1.0% on average 
per year in Ecuador to 6.4% for the  Plurinational State of Bolivia . By contrast , Cuba's merchandise 
imports fell by 1.6% on annual average . 
Table 1: SVEs m erchandise trade, 2010 -2019  
(Billion US dollars and percentage)  
  Value (USD bn)  Annual percentage change (%)  
  2010  2019  2016  2017  2018  2019  2010 -2019  
Exports  
SVEs  107.4  136.6  -6.6 9.5 6.8 -0.3 2.7 
Ecuador  17.5 22.3 -8.4 13.8 13.1 3.2 2.8 
Sri Lanka  8.6 11.9 -2.2 10.2 4.7 0.4 3.7 
Papua New Guinea  5.7 11.4 -3.1 21.5 5.7 8.3 7.9 
Panama  11.0 11.3 -1.3 -0.9 3.5 -1.4 0.3 
Dominican Republic  6.8 11.2 4.2 3.0 5.0 5.2 5.8 
Guatemala  8.5 11.2 -2.2 5.2 -2.0 3.8 3.1 
Honduras  6.3 8.8 -3.2 8.7 -0.1 1.7 3.8 
Bolivia, Plurinational State of  6.4 8.8 -18.8 10.8 14.3 -2.3 3.5 
Mongolia  2.9 7.6 5.3 26.1 13.1 8.7 11.3 
Trinidad and Tobago  11.0 7.2 -29.0 14.5 20.5 -31.7 -4.6 
Memo item:                
World  15301.0  19014.2  -3.1 10.6 10.2 -2.7 2.4 
Exports
Imports
Source: WTO-UNCTAD estimates.Ecuador
16.3%
Panama
10.2%
Trinidad and 
Tobago
10.2%Sri Lanka
8.0%Guatemala
7.9%Dominican 
Republic
6.3%Bolivia, 
Plurinational 
State of
6.0%Honduras
5.8%Papua New 
Guinea
5.3%Cuba
4.6%Other SVEs
19.4%2010 
Ecuador
16.3%Sri Lanka
8.7%
Papua New 
Guinea
8.3%
Panama
8.3%Dominican 
Republic
8.2%Guatemala, 
4.3%Honduras
6.4%Bolivia, 
Plurinational 
State of
6.4%Mongolia
5.6%Trinidad and 
Tobago
5.3%Other SVEs
18.2%2019
Ecuador
13.0%
Panama
10.6%
Dominican 
Republic
9.8%
Guatemala
8.7%
Sri Lanka
8.5%Cuba
7.3%Honduras
5.6%El Salvador
5.3%Trinidad and 
Tobago
4.1%Bolivia, 
Plurinational 
State of
3.5%Other SVEs
23.5%2010Ecuador
10.9%Panama
10.4%
Dominican 
Republic
9.8%
Sri Lanka
9.6%
Guatemala
9.6%Honduras
5.9%El Salvador
5.6%Cuba
4.8%Bolivia, 
Plurinational 
State of
4.7%Nicaragua
3.4%Other SVEs
25.5%2019WT/COMTD/SE/W/45  
 
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    Value (USD bn)  Annual percentage change (%)  
Imports  
SVEs  158.2  226.4  -8.0 10.0 9.4 -2.6 3.1 
Ecuador  20.6 22.6 -24.1 22.6 15.8 -2.6 1.0 
Panama  16.7 21.5 -7.0 4.8 4.9 -6.6 2.8 
Dominican Republic  15.5 20.3 2.9 1.9 13.9 0.3 3.0 
Sri Lanka  13.5 19.9 1.3 9.4 6.0 -10.3 4.4 
Guatemala  13.8 19.9 -3.6 8.2 7.1 0.9 4.1 
Honduras  8.9 12.1 -5.5 8.0 9.2 -2.5 3.5 
El Salvador  8.4 11.6 -4.5 7.6 8.4 1.2 3.6 
Cuba 11.5 9.9 -12.2 -1.0 12.9 -13.8 -1.6 
Bolivia, Plurinational State 
of 5.6 9.8 -13.7 10.2 7.6 -2.1 6.4 
Nicaragua  4.8 7.0 -17.5 32.3 -4.6 -5.0 4.3 
Memo item:                
World  15439.7  19337.5  -3.2 10.9 10.2 -2.4 2.5 
Source:  WTO estimates based on WTO Stats portal.  
3.3  Trends in product composition  
3.10.  SVEs' merchandise exports are largely driven by  primary commodit ies. Between 2010 
and 2019, t he share of primary products remained relatively  stable , accounting respectively for 
58.9% and 59.7 % of the group's exports .3 While in 2010 fuels made up more than a quarter of 
SVEs' merchandise exports, in 2019 the ir share  declined to 22.3 %, reflecting price decreases. As a 
result, the share of food products  grew from 23.6 % to 27.2 %. Agricultural raw materials and 
non-ferrous metals accounted for steady share s over the period while exports of ores and minerals 
increased in importance from 6.7% to 7.3 %. 
3.11.  Among manufacture d products , the share of clothing grew from 11 .4% in 2010 to 12 .4% in 
2019, while chemicals fell. Exports of t ransport equipment contracte d by more than two percentage 
points from 4 .0% to 1.6%. The shares of semi -manufactures and textiles  remained stable.  
 
3 These shares are calculated according to the WTO product groups, classified according to the Standard 
International Trade Classification (SITC). Following this definition, diamonds and non -monetary gold are not 
part of mineral products – as opposed to the Harmonized System (HS).  WT/COMTD/SE/W/45  
 
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  Chart 7: SVEs merchandise export structure, 2010 and 2019  
(Percentage shares)  
 
Source: WTO estimates based on Comtrade [importer data].  
3.12.  While primary products formed the large st portion  of SVEs exports, manufactures  
accounted for the bulk of imports , with a 61.4% share in 2019, down from 64.0% in 2010 . 
Within  manufactured products , transport equipment represented the largest part (13.9 %), although  
in a declining trend since 2010  (21.4%). Chemical s followed with 10.2%, increasing in share over 
the period (9.3 % in 2010 ) followed by machinery excluding transport/office & telecom  (10.1%). 
Regarding primary commodities , the share of fuels rose from 16 .5% to 17.7% while food products  
formed 13.4 % of SVE s merchandise imports,  up from 10.8% in 2010 . 
WT/COMTD/SE/W/45  
 
- 13 - 
 
  Chart 8: SVEs merchandise import structure, 2010 and 2019  
(Percentage shares)  
 
Source:   WTO estimates based on Comtrade [exporter data].  
3.3.1   Trade in intermediate goods  
3.13.  SVEs have a low participation in trade in intermediate goods  (excluding fuels) , 
implying low integration as a group in global supply chains . Between  2010 and 2019, the 
share of SVEs in global trade in intermediate goods remained stagnant at 0.6 % for exports and  
0.9% for imports . 
WT/COMTD/SE/W/45  
 
- 14 - 
 
  Chart 9: Share of SVEs in Trade in Intermediate Goods , 2010 -2019 
(Percentage shares)  
 
Source:  WTO estimates.  
3.14.  In 2019, SVEs' exports of intermediate goods totalled USD 48.3 billion  from USD 37.2 billion 
in 2010. Although the evolution of SVEs intermediate goods exports matched global trends until 
2016, growth slowed in 2018 and 2019. E xports  remained relatively flat, while the rest of the world 
experienced  an acceleration . 
Chart 10: SVEs exports of intermediate goods, 2010 -2019  
(Billion dollars)  
 
Source:  WTO estimates.  
3.15.  The main intermediate goods exported by SVEs were gold (HS710812), copper ores 
(HS260300), coffee (HS090111), iron ores (HS260111), methanol (HS290511), and palm 
oil. These six products formed 37.8% of SVEs total intermediate goods exports in 2019. Gold alo ne 
accounted for over 16 %, up from 11.3 % in 2010.   
WT/COMTD/SE/W/45  
 
- 15 - 
 
  Chart 11: SVEs exports of intermediate goods by main product, 2010 -2019  
(Percentage share)  
 
Source:  WTO estimates.  
3.16.  Half (17) of the 33 SVEs accounted for v irtually all exports of intermediate goods . 
Papua New Guinea  was the leading exporter in both 2010 and 2019 , however, its share  
contracted  over the years. Panama , Guatemala , and Honduras recorded  steep drops between 2010 
and 2019.  The contraction in the shares of Papua New Guinea, Guatemala, and Honduras was due 
to rapid export growth recorded by the Dominican Republic, Mongolia, Nicaragua, and the 
Plurinational State of Bolivia.  
WT/COMTD/SE/W/45  
 
- 16 - 
 
  Chart 12: Share of intermediate goods exports by individual SVE, 2010 and 2019  
(Percentage shares)  
 
Source:  WTO estimates.  
3.17.  In the Dominican Republic, exports of gold increased by about USD 1.5 billion between 2010 
and 2019 . Exports of automatic c ircuit breakers (HS853620) within total trade doubled between 
2010 and 2019 - an increase of more than 670 million USD.   
3.18.  Mongolia's exports in copper ores, gold , and iron ores increased by 105 %, 146 %, and 92 % 
respectively, almost doubling Mongolia's share of intermediate goods exports during the period. 
Mongolia accounted for approximately 3.3 % of world exports of copper ores and ranked within the 
top 10 exporters of copper ores globally  in 2019.  
3.19.  Nicaragua's t wo main intermediate goods exports – insulated ignition wiring set (HS854430) 
and coffee - increased by more than 400 % and 19 % respectively between 2010 and 2019. Nicaragua 
maintained its position a mong the 15 largest exporters  of coffee and insulated igni tion wiring sets 
in the world.  
WT/COMTD/SE/W/45  
 
- 17 - 
 
  3.20.  For the Plurinational State of Bolivia, the rise in share was driven by gold and zinc ore 
(HS260800) exports. In particular , the latter rose by around 50% between 2010 and 2019 . The 
Plurinational State of Bolivia  kept is ran k in the  5 global leading  exporter s of zinc ores.  
3.21.  In 2019, 20 SVEs accounted for 97 % of total SVE imports in intermediate goods.  
Ecuador accounted for the highest share with aromatic hydrocarbon (HS270750) forming 12 to 17 % 
of its imports in both 2010 and 2019. However, Ecuador's share contracted over the period . Panama 
and Cuba also experience sharp  decreases. By contrast, Sri Lan ka, Dominican Republic, Nicaragua, 
Guyana, and the Maldives expanded their share s in the group . 
Chart 13: Share of intermediate goods imports by individual SVE, 2010 and 2019  
(Percentage shares)  
 
Source:  WTO estimates . 
WT/COMTD/SE/W/45  
 
- 18 - 
 
  3.4  Major markets of Small Economies  
3.22.  SVEs merchandise exports are concentrated to a few partners . The top ten destinations 
accounted for 70 .2% of SVEs ' total exports in 2019, a similar share as in 2010 ( 70.7%). In 2019, 
over one quarter of SVEs' total merchandise e xports reached the United States  (27.0 %), followed 
by the European Union (13 .1%), China (12 .2%), Japan ( 3.9%), and Brazil (3 .1%). Table 2 shows 
SVEs top ten markets by product groups in 2010 and 2019.   
3.23.  In 2019, prior to the pandemic, around 74% of SVEs' exports of agricultural products 
were destined to the top ten destinations up from 7 0.6% in 2010.  The European Union was 
the main market  (23.6%), followed by the United States ( 23.4%), China (9 .3%), the 
Russia n Federation  (3.6%), and the United K ingdom (3 .0%). It is worth noting that t he share of 
SVEs' exports of agricultural products to China increased by 6 percentage points compared with 
2010.  
3.24.  Among the three broad product categories, the highest partner concentration was 
recorded  in fuels and mining.  The top ten destinations accounted for 83 .4% of all SVEs' exports 
in 2019 , up from 78 .2% in 2010. In 2019, China alone accounted for 28.0% of the group' s exports , 
rising from 13 .3% in 2010 . The United States ranked second with 16.8%, followed b y Japan (9 .1%), 
Brazil ( 7.9%), and the European Union (6 .5%). 
3.25.  The United States and the European Union were the most important destinations for SVEs' 
exports of manufactured goods in both 2010 and 2019. In 2019, the United States imported 41 .2% 
of SVEs'  manufacturing exports, followed by the European Union (1 2.7%), Guatemala ( 3.6%), 
Mexico (3 .2%), and China (3 .1%). Overall, in 2019, 75.7 % of SVEs'  exports of manufactures 
reached the top ten markets , down from 77.5 % in 2010.  
  WT/COMTD/SE/W/45  
 
- 19 - Table 2: SVEs top ten export markets, 2010 and 2019  
(Billion US dollars and percentage shares)  
 Total trade  Agricultural products  Fuels and mining products  Manufactures  
 Market  USD 
bn. % 
Share  Market  USD bn.  % 
Share  Market  USD 
bn. % Share  Market  USD bn.  % Share  2010  United States  36.1 31.1%  European Union  7.3 24.1%  United States  11.0 28.7%  United States  16.0 38.9%  
European Union  15.4 13.3%  United States  6.8 22.5%  China  5.1 13.3%  European Union  5.3 12.8%  
China  6.3 5.4%  Russian Federation  1.4 4.5%  Brazil  4.8 12.5%  Nigeria  3.0 7.4%  
Brazil  5.3 4.6%  United Kingdom  1.2 4.0%  European Union  2.7 7.0%  Venezuela, 
Bolivarian Rep. of  1.8 4.3%  
Nigeria  3.4 3.0%  China  1.0 3.3%  Peru 1.5 4.0%  United Kingdom  1.7 4.1%  
United Kingdom  3.4 2.9%  Japan  1.0 3.2%  Japan  1.4 3.8%  Guatemala  1.0 2.4%  
Canada  3.3 2.8%  Canada  0.8 2.5%  Ecuador  1.0 2.5%  Colombia  0.9 2.1%  
Australia  3.3 2.8%  Mexico  0.7 2.4%  Korea, Rep. of  0.9 2.3%  Costa Rica  0.8 1.9%  
Japan  3.0 2.6%  Venezuela, Bolivarian 
Rep. of  0.7 2.2%  Chile 0.9 2.2%  Mexico  0.8 1.9%  
Venezuela , Bolivarian 
Rep. of  2.4 2.1%  El Salvador  0.6 2.1%  Argentina  0.7 1.9%  Honduras  0.7 1.7%  
Top 10 export markets  82.0 70.7%  Sum of above  21.3 70.6%  Sum of above  29.9 78.2%  Sum of above  31.8 77.5%  
All markets*  116.1  100.0%  All markets*  30.2 100.0%  All markets*  38.2 100.0%  All markets*  41.0 100.0%  
 Market  USD 
bn. % 
Share  Market  USD bn.  % 
Share  Market  USD 
bn. % Share  Market  USD bn.  % Share  2019  United States  38.4 27.0%  European Union  9.9 23.6%  China  12.0 28.0%  United States  18.8 41.2%  
European Union  18.7 13.1%  United States  9.9 23.4%  United States  7.2 16.8%  European Union  5.8 12.7%  
China  17.4 12.2%  China  3.9 9.3%  Japan  3.9 9.1%  Guatemala  1.6 3.6%  
Japan  5.6 3.9%  Russian Federation  1.5 3.6%  Brazil  3.4 7.9%  Mexico  1.5 3.2%  
Brazil  4.4 3.1%  United Kingdom  1.3 3.0%  European Union  2.8 6.5%  China  1.4 3.1%  
Australia  3.5 2.5%  Canada  1.1 2.5%  Chile 1.6 3.7%  El Salvador  1.4 3.0%  
Canada  3.4 2.4%  El Salvador  1.0 2.4%  Argentina  1.4 3.3%  Nicaragua  1.1 2.4%  
India 3.0 2.1%  Japan  1.0 2.3%  Peru 1.3 3.0%  United Kingdom  1.0 2.3%  
Switzerland  2.9 2.1%  Colombia  0.9 2.1%  Rep. of Korea  1.1 2.6%  Brazil  1.0 2.1%  
El Salvador  2.7 1.9%  Mexico  0.6 1.5%  Ecuador  1.0 2.4%  Canada  0.9 2.1%  
Top 10 export markets  100.1  70.2%  Sum of above  31.0 73.7%  Sum of above  35.9 83.4%  Sum of above  34.5 75.7%  
All markets*  142.5  100.0%  All markets*  42.1 100.0%  All markets*  43.0 100.0%  All markets*  45.6 100.0%  
a Estimate.   
* Aggregated export values for all markets may not coincide with total trade data reported by SVEs.   
Source:  WTO estimates based on Comtrade [importer data].  
 WT/COMTD /SE/W/45  
 
- 20 - 
 
  3.5  Trends in services trade  
3.26.  Between 2010 and 2019, SVEs enjoyed a period of rapid services growth , with exports 
rising by 6 % on average per year, somewhat above growth recorded in the rest of the world (5 %). 
In 2019, SVEs' services exports reached USD 84.0 billion, up from USD 49.9 billion in 2010. Services 
imports expanded from USD 33.7 billion in 2010 to USD 54.7 billion in 2 019, a 5.5 % average growth 
per year. SVEs are net services exporters with tourism as the main driver of growth.  
Chart 14: Evolution of SVEs' trade in commercial services, 2010 -2019  
(Billion dollars)  
 
Source:  WTO estimates based on WTO Stats portal.  
3.27.  Despite above average exports growth, participation of SVEs in global exports 
remained negligible over the years, at 1.3 -1.4%, with a peak of 1.5 % in 2015 through 2017. 
SVEs' share in imports was lower, at 0.9 % in 2019, unchanged  compared with 2010. SVEs face 
important challenges in integrating in services trade.  
Chart 15: SVEs' participation in global services trade, 2010 -2019  
(Percentage shares)  
 
Source:  WTO estimates based on WTO Stats portal.  
WT/COMTD/SE/W/45  
 
- 21 - 
 
  3.28.  In 2019, Panama, Cuba, and the Dominican Republic were the leading SVE services 
exporters, accounting together for 39.4 % of the group's services exports . The same three 
economies ranked as main exporters also in 2010, although in a different order. Sri Lanka was the 
leading services importer, and in 2019 was followed by Panama and the Dominican Republic. Overall, 
they formed 29.0 % of SVEs' services imports.  
Chart 16: Top 15 SVE services exporters and importers, 2010 and 2019  
(Percentage shares)  
 
Source:  WTO estimates based on WTO Stats portal.  
3.29.  The bulk of SVEs exports are tourism driven . Services exports are heavily concentrated 
in Travel, which covers foreign travel lers' expenditure in services (accommodation, restaurants, 
cultural and recreational activities, local transport, etc), and goods (e.g., souvenirs) during their 
visits to SVEs. In 2019, SVEs' travel receipts amounted to USD 46.2 billion, almost double the value 
than in 2010. Travel/tourism, which accounted for 55. 1% of SVEs' total services exports 
(48.0% in 2010), is the sector with the highest participation in global exports. In 2019, it 
reached 3.1 %, up from 2.5 % in 2010 , thanks to strong export performan ce of various SVEs 
such as Sri Lanka, the Dominican Republic, Panama, the Bahamas, and Ecuador. Although on a 
smaller scale, travel exports of several island SVEs such as Saint Vincent and the Grenadines, 
Saint Kitts and Nevis, Saint Lucia, and Tonga recor ded rapid growth.  
Exports
Imports
Other SVEs
16.5%Sri Lanka
12.0%Panama
9.5%
Dominican 
Republic
7.5%
Ecuador
7.4%
Guatemala
6.5%
Mongolia
5.8%Bolivia, Plur. 
State of
5.2%Jamaica
4.7%Honduras
4.4%Mauritius
3.8%Cuba
3.7%El Salvador
3.6%Trinidad and 
Tobago
3.4%Bahamas
3.0%Papua New 
Guinea
3.0%2019
Other SVEs
13.8%Sri Lanka
12.7%Ecuador
8.7%Papua New 
Guinea
8.1%
Panama
8.0%
Dominican 
Republic
7.3%
Guatemala
7.1%
Mauritius
5.8%Cuba
5.7%Jamaica
5.2%Honduras
3.4%Bolivia, Plur. 
State of
3.3%Bahamas
3.3%El Salvador
3.1%Mongolia
2.3%Nicaragua
2.1%2010Other SVEs
11.3%Cuba
21.1%
Panama
12.7%
Dominican 
Republic
10.2%
Mauritius
5.3%
Jamaica
5.2%
Bahamas
4.9%Sri Lanka
4.9%Guatemala
4.6%Honduras
4.2%Maldives
3.6%El Salvador
2.9%Ecuador
2.8%Barbados
2.6%Fiji
1.8%Trinidad and 
Tobago
1.7%2010
Other SVEs
13.1%Panama
16.5%
Cuba
12.2%
Dominican 
Republic
10.7%
Sri Lanka
8.9%
Bahamas
5.3%
Jamaica
5.1%Guatemala
4.3%Maldives
4.0%Ecuador
3.8%El Salvador
3.8%Mauritius
3.6%Honduras
3.5%Fiji
1.8%Barbados
1.8%Bolivia, Plur. 
State of
1.7%2019WT/COMTD /SE/W/45  
 
- 22 - 
 
  Chart 17: Structure of SVEs services trade by broad category, 2010 and 2019  
(Billion dollars)  
 
Source:  WTO estimates based on WTO Stats portal.  
Chart 18: Leading SVE travel exporters, 2010 and 2019  
(Billion dollars; share in SVEs' travel exports)  
 
Source:  WTO Stats portal.  
WT/COMTD/SE/W/45  
 
- 23 - 
 
  3.30.  SVEs' transport exports stood at USD 15.0 billion in 2019 and a relative share in total services 
of 17.9 %, down from 20.2 % recorded in 2010. Maritime tran sport, mainly port services, 
accounted for 48 % of SVEs' total transport exports  and a value of USD 7.2 billion. Air transport 
services, largely international passenger transport, saw an important rise compared with 2010, 
reaching USD 6.9 billion in 2019. Only 1.4 % of world transport exports originated from SVEs,  
increasing by 0.2 percentage points compared with 2010. Overall, SVEs are net transport importers 
with a negative balance of USD 6.0 billion in 2019. Participation in transport imports, however, was  
also modest, at 1.7 % in 2019.  
Chart 19: SVEs' transport exports by mode of transport, 2010 and 2019  
(Billion dollars)  
 
Source:  WTO estimates based on WTO Stats portal.  
3.31.  The main reason for such low participation in global transport trade is concentration.  
Transport exports are dominated by Panama (46.9 % in 2019).  The country  alone  formed 
over 59 % of sea transport services exports, mainly reflecting the tolls paid by vess els for transiting 
the Canal. Panama was also the leading air transport services exporter with a 38 % share in 2019. 
Sri Lanka ranked second as transport exporter thanks to maritime freight shipping and air passenger 
transport revenues. Both economies recor ded an average annual growth of 8 % during the period 
2010-2019. It is worth noting that 23 SVEs accounted together for only 10.9 % of transport exports 
by the group. Five economies (Sri Lanka, Panama, Dominican Republic, Ecuador, and Guatemala) 
formed almos t half of transport imports . 
Chart 20: Leading SVE transport exporters, 2019  
(Share in SVEs' transport exports)  
 
Source: WTO estimates based on WTO Stats portal.  
3.32.  SVEs' exports of other commercial services totalled USD 18.8 billion in 2019, up 
from USD 15.9 billion in 2010.  The structure of SVEs' exports of other commercial services 
appears to have changed compared with 2010, although improved data collection and compilation 
may partly explain some of the changes. In particular, "Oth er business services", a mixed category 
which includes sectors such as R&D services, professional, technical, and trade -related services, 
accounted for 29.9 % in 2019, down from 43.0 % in 2010.4 In 2019, personal, cultural, and 
 
4 In the past, this category has often been used by economies to group services transactions for which 
detailed information was not available.  
3.9
2.6
0.31.16.9
5.1
0.31.5
0.02.04.06.08.010.0
Air
transport,
of which:Passenger Freight Other
airport
services5.6
0.51.04.17.2
1.65.6
0.02.04.06.08.010.0
Sea
transport,
of which:Passenger Freight Other port
services0.50.00.3 0.1 0.10.70.10.4 0.3 0.1
0.02.04.06.08.010.0
Other
modes of
transport,
of which:Passenger Freight Other
supporting
servicesPostal  and
courier
servicesAir Transport Sea Transport Other Modes of Transport
WT/COMTD /SE/W/45  
 
- 24 - 
 
  recreational services was the main subsector, with a relative share of 30.9 %. Telecommunications 
services represented 12.7 % followed by computer services (9.6 %), the most dynamic services 
sector at the global level. Financial services exports doubled from 5.1 % to 10.5 % in 2019.  
Chart 21: Structure of SVEs' other commercial services exports, 2010 and 2019  
(Share in other commercial services exports)  
 
Source: WTO estimates based on WTO Stats portal.  
3.33.  SVEs ' participation in world exports of other commercial ser vices remained 
negligible at 0.5 % in 2019, declining from 0.7 % in 2010, suggesting challenges for these 
economies  in penetrating higher segments of services trade.  According to available data, 
other commercial services were equally concentrated within a co untry. Cuba held 40.5 % of all SVEs' 
exports of other commercial services, followed by Panama, Sri Lanka, and Guatemala. The latter 
three economies also increased their relative shares in the group compared with 2010. By contrast, 
other SVEs saw their parti cipation contract, such as Mauritius , which suffered a decline in exports.  
WT/COMTD/SE/W/45  
 
- 25 - 
 
  Chart 22: Leading SVE exporters of other commercial services, 2010 and 2019  
(Share in SVEs' other commercial services exports)  
 
Source: WTO estimates based on WTO Stats portal.  
3.34.  According to estimates in the WTO -OECD Balanced Trade in Services dataset (BaTIS), SVEs 
services exports are  heavily concentrated to a few  partners . With a 27 % share, the 
United  States was the main destination of SVEs' total services exports in 2019. The country formed 
28.3% of SVEs' travel receipts, 22.4 % of transport exports, and 39 % of personal, cultural,  and 
recreational services exports.  
3.35.  The European Union ranked second as partner with a 21.7 % share, rising from 18. 5% in 
2010. Over 22 % of SVEs transport exports were destined to EU members, which, in turn contributed 
for some 20 % of international travellers' expenditure in SVEs. The European Union was also the 
main destination of SVEs' exports of other business servic es (27 %). 
3.36.  The United States and the European Union together formed more than half of SVEs' exports 
of telecommunications, computer, and information services (28.6 % and 28.4 % respectively), 
followed by Switzerland (6.7 %). The United Kingdom followed at a distance as third largest export 
destination with 5.5 %, while services exports to China, at 5 % in 2019, doubled compared with 2010, 
thanks to travel revenues (71 %).  
WT/COMTD /SE/W/45  
 
- 26 - 
 
  Chart 23: SVEs commercial services exports by partner, 2010 and 2019  
(Percentage share)  
 
Source: WTO -OECD Balanced Trade in Services dataset (BaTiS).  
4  EFFECTS FROM THE COVID -19 PANDEMIC ON SMALL ECONOMIES' TRADE  
4.1  Short -term merchandise trade  trends  
4.1.  The COVID -19 pandemic had a significant impact on SVEs.  In 2020, merchandise trade 
volume, as average of exports and imports, declined by 12.7 %, compared with -5.3% for 
the world.  
4.2.  The pandemic had a  more moderate impact on  SVEs'  exports (-8.4%) and a more 
severe influence on their import volumes  (-17%). Exports recorded  a sharp 19.3 % 
quarter -on-quarter decline in the second quarter  of 2020 as countries around the world imposed 
strict lockdowns to contain the spread of the SARS -CoV-2 virus. The tr ough of the export slump was 
20.4% below the previous peak from the third quarter of 2019. Exports rebounded to near their 
pre-pandemic level in the third quarter of 2020 after registering 22.6 % quarter -on-quarter increase.  
Exports surpassed pre -pandemic l evels in the fourth quarter of 2020.   
4.3.  By comparison, merchandise imports plunged 21.3 % quarter -on-quarter in the second quarter 
of 2020 , with a trough 27.7 % below the pre -pandemic peak reached in the same period of 2019. 
The trough was deeper compared to historical levels, being roughly equal to the volume of imports 
in the third quarter of 2011. The volume of SVE imports also took longer to recover than exports, 
only returning to their level at the start of 2020 in the second quarter of 2021 and finally surpassing 
the pre -pandemic peak in the first quarter of 2022.   
4.4.  The outbreak of the war in Ukraine in the first quarter of 2022 caused sharp increases in prices 
of primary commodities, particularly energy and grai ns, but this does not appear to have caused a 
contraction in the overall quantities of merchandise imported by SVEs. The volume of SVE exports 
does appear to have jumped around 9 % in the second quarter of 2022 compared to the previous 
quarter, possibly mak ing up for shortfalls in shipments from Ukraine and the Russia n Federation .  
4.5.  Projected trade volumes show merchandise export and import growth slowing in 
2023, although both should still be at or near all -time highs at the end of the year.  It should 
be not ed that trade projections are highly dependent on the course of the conflict and should be 
interpreted with caution.  
WT/COMTD/SE/W/45  
 
- 27 - 
 
  Chart 24: Quarterly merchandise trade volume of SVEs, 2010Q1 -2023Q4  
(Indices, 2010Q1=100)  
 
Sources: WTO estimates based on WTO Stats portal for historical data , and WTO estimates for forecasts.  
4.6.  Table 3 summarizes the trade volume outlook for SVEs in 2022 and 2023 based on the WTO's 
trade forecast of 5 October 2022. Merchandise export growth in these countries was expe cted 
to slow from 5.2 % in 2021 to 5.0 % in 2022, and eventually to 3.2 % in 2023. Meanwhile, 
merchandise import growth was estimated to decline  from 19.3 % in 2021 to 8.1 % in 2022 
and finally to 2.2 % in 2023.   Export growth in 2023 is  forecasted to exceed world trade growth , 
while import growth is expected to be in line with the world average.  
Table 3: Merchandise trade volume and real GDP growth of SVEs, 2018 -2023 a 
Annual percentage change  
  2018  2019  2020  2021  2022P  2023P  
World        
Merchandise trade volume b 3.2 0.5 -5.2 9.7 3.5 1.0 
Real GDP at market exchange rates  3.2 2.6 -3.4 5.8 2.8 2.3 
SVEs       
Merchandise export volume  0.5 3.1 -8.4 5.2 5.0 3.2 
Merchandise import volume  3.2 -0.4 -17.0 19.3 8.1 2.2 
Real GDP at market exchange rates  3.0 2.2 -7.6 7.5 3.3 3.3 
a  Figures for 2022 and 2023 are estimates based on the WTO trade forecast of October 2022.  
b  Average of exports and imports.  
Sources: WTO for trade  of SVEs , WTO Stats portal  for world; consensus estimates for GDP.  
4.7.  In value terms , in 2020, the group's  merchandise  exports fell by 10.7% to 
USD 122 billion , a loss of 14.6 USD billion compared with 2019 . Imports contracted even more, 
dropping by 20.3% to USD 165 .4 billion.  These declines were sharper than in the rest of 
the world  where  merchandise  trade fell on average by 7.3 %.  
4.8.  In 2021, SVEs ' merchandise trade recovered faster than in other countries , with 
exports and imports increasing by 29.6 % and 36.9 % respectively ( compared with 26.5% and 26.3 % 
for world). Trade exceeded pre -pandemic levels, reaching  USD 158.1 billion for exports and 
USD 226.4 billion on the imports side. In terms of participation,  however, the share of SVEs in 
global merchandise trade decreased f rom 0. 72% in 20 19 to 0.71 % in 2021  for exports , 
and from 1.07% in 20 19 to 1.00 % in 2021 for imports.   
WT/COMTD /SE/W/45  
 
- 28 - 
 
  Chart 25: SVEs' merchandise trade, 2019  to January -June 2022  
(Billion US dollars and percentage change)  
 
* Estimate based on reported partner data of 109 economies in Trade Data Monitor (TDM).  
Source:  WTO estimates . 
4.9.  For 2022 , data availability fo r the SVEs is limited . Preliminary estimates based on mirror 
data indic ate further strong development of SVEs' merchandise trade during the first half of 2022. 
For the period January to June, estimates indicate a year -on-year increase of 29.8 % for 
exports to some USD 103 billion  and of 23.6 % for imports to around U SD 140 billion.  Thus, 
as a group, SVEs ' merchandise trade appear s to perform better in comparison with the world 
average, where exports  increased by 1 8.0% and imports  by 19.3%. In the first half of 2022 , SVEs' 
merchandise trade has attained 7 5% of its nominal pre-pandemic level s. 
4.10.  Chart 26 shows the development of SVEs' merchandise trade by major product groups for 
January -June 202 2 compared with the same period of 2021 . SVEs benefitted from the boost in 
global demand and higher energy prices . SVEs' exports of fuels and mining products were up  
48% and by 49 % year-on-year respectively in the first half of 2021 and of 2022 , significantly more 
than other product  groups . On the other hand, other SVEs , which are not fuels and mining 
products exporters  were affected by higher oil  prices,  particularly in the first half of 2022, as 
import value of fuels and mining products increas ed by 79 % year-on-year. 
Chart 26: SVEs' merchandise trade, by major product groups, Jan uary-June 2021 -2022 
(Year -on-year percentage change)  
 
Source:  WTO estimates.  
4.11.  Among individual SVEs which reported data for the first half of 2022, Guyana saw the most 
rapid year-on-year exports growth (+41 %) due to oil, followed by the Plurinational State of Bolivia , 
sustain ed by gold ores exports  (+40%) and Ecuador (+ 36%) due to c rude oils and fish.  
WT/COMTD/SE/W/45  
 
- 29 - 
 
  4.12.  On the imports side,  Guyana also recorded  the highest year-on-year rises (+47%) - driven 
by non-crude oils , parts for pipes and articles of iron or steel , followed by Panama (+45 %) and 
Ecuador (+44 %) while Sri Lanka's imports  declined by 2 % especially due to contracting imports of 
data processing machines, bulldozers, and mobile phones.  
Chart 27: Merchandis e exports and imports of selected SVEs, January -June 2022  
(Year -on-year percentage change)  
 
Source:  Trade Data Monitor (TDM) and WTO  Stats for World. 
4.13.  In the first half of 2022 the value of SVEs' total merchandise trade was above level s 
in the first half of 2019 , by 40 % for exports and by 27 % for imports  respectively . Exports 
of fuels and mining products were 54 % above 2019 levels, followed by agricultural products (36 % 
above 2019) and manufactures (29 % above 2019). Imports of fuels and mining products reached a 
value of 61 % above the respective 2019 level, imports of agricultural products of 34 % above and 
imports of manufactures of 14 % above.  
WT/COMTD /SE/W/45  
 
- 30 - 
 
  Chart 28: SVEs' merchandise trade, by  major product groups, Jan uary-June 2019 -2022  
(Index Jan uary-June 2019 = 100)  
 
Source:  WTO estimates.  
4.14.  Global merchandise trade has slowed in  the third quarter of 2022 . In value terms, 
trade growth decelerated  to 13% year-on-year, down fro m 17% recorded in the second quarter . 
According to available data, trade slowed also in SVEs , with some exceptions . Merchandise 
exports of the Plurinational State of Bolivia grew by 20 % year-on-year in the third quarter , 
significantl y less than  in the previous quarter ( 43%), while Panama's  exports contracted by 2 %, 
after a 19 % year-on-year rise in the second quarter .  
4.15.  On the imports side, Guatemala's growth  decelerated from 31 % in the second quarter of 2022  
to 14% in the third . Sri Lanka dropped further by 18% in the third quarter  (-12% in Q2) . However, 
merchandise imports of the Plurinational State of Bolivia have been on the rise since the beginning 
of 2022 and increased by 64 % year-on-year in value and by 53 % in volume  in the third quarter of 
the year, due to fuels and oils.  
4.16.  The United States remained the most  important destination of SVEs' merchandise 
exports through the pandemic , with a share of 29 .2% in 2021, up from 27 .0% in 2019. China , 
which ranked  third in 2019 with a share of 12 .2%, overtook the European Union  as second export 
destination in 2021,  and 14.1% share . Japan  kept the fourth position, while India moved from the 
8th to the 5th rank as its share doubled from 2 .1% in 2019 to 4 .4% in 2021.  
Chart 29: SVEs' top ten merchandise export markets, 2019 and 2021  
(Percentage shares)  
 
Source:  WTO estimates based on Comtrade [importer data].  
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  4.2  Effects of rising commodity prices, inflation, supply chains disruptions  
4.2.1   Rising commodity prices  
4.17.  Commodity prices followed different trajectories  in the last decade . Energy prices trended 
upwards, possibly due to resource depletion and lack of substitution, while base metals prices were 
somewhat more stable as technology facilitated s ubstitution, keeping levels low. By contrast, 
agriculture prices followed a downward trend reflecting low demand elasticities for food.5  
4.18.  In early 2020, the COVID -19 pandemic resulted in unprecedented demand and 
supply shocks on commodity markets. Border closures, lockdowns, and reduced industrial 
activity disrupted global supply chains and affected commodity prices,  particularly of energy 
products. For example, the Brent crude oil price fell 75 % between February and April 2020 while the 
Dutch TTF gas pric e dropped 44 %. As economic activity recovered in 2020 and travel started to 
resume, the demand for energy spiked. Supply -side constraints also contributed to the rise in energy 
prices. In mid -2021, the OPEC+ group temporarily reduced oil production. Chart 30 shows rallying 
energy price index with the highest monthly increase, by 25 %, in March 2022. The onset of the 
war in Ukraine and resulting geopolitical tensions added to supply -side issues in a context 
of high demand.  In comparison with energy products, prices for metals and minerals were less 
volatile. The latent effects of COVID -19 and the conflict in Ukraine resulted in a rise in prices due to 
the impo rtance of the Russian Federation in global production and trade in metals and minerals.6   
 
5 World Bank Focus Report "Persistence of commodity shocks" (2020) . 
6 In 2020, the Russian Federation was responsible for the production of 45% of global uranium 
(enriched), 43% of global palladium, 17% of global nickel (class 1) and 14% of global platinum. Sou rce, IEA, 
Paris.  WT/COMTD /SE/W/45  
 
- 32 - 
 
  Chart 30 and 31: Monthly Commodity Price Indices (January 2010 -November 2022)  
(Index 2010=100)  
 
 
(Index 2010=100)  
 
Source : World Bank Commodity Price Index Database (December 2022).  
4.19.  In the agricultural sector, food commodities prices started to rise from the second half of 
2020. Decreasing global production and exports of fertilisers combined with robust de mand 
throughout COVID -19 translated into an increase in price in mid -2021 to peak in May 2022. Fertilizer 
prices are expected to remain historically high due to elevated price levels of coal and natural gas.  
4.20.  Among food commodities, the price index of Grai ns peaked in May 2022 following the 
blockades at the Ukrainian ports due to the Russian invasion, which caused a surge in the price of 
wheat as the ports were responsible for 90 % of Ukraine's wheat exports and nearly 9 % of total 
global exports of wheat7. Prices for Oils and Meals largely followed the same trend as Ukraine is also 
the top producer of sunflower meal, oil and seed and the world's biggest exporter of sunflower oil8. 
Other Food and perishable agricultural products such as fruits and vegetables  also experience a price 
 
7 The Impact of the War in Ukraine on Commodity Markets (World Bank, 2022) . 
8 The Food and Agriculture Organisation of the United Nations (FAO) predicts that alternative sources for 
grains and sunflower seed (used in the production of sunf lower oil) will only partially compensate for the steep 
decline in exports from Ukraine and the Russian Federation in the 2022/23 marketing season, resulting in an 
increase in food and feed prices between 8 and 22% above baseline.  
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- 33 - 
 
  shock. Supply chain disruptions in the availability of production inputs such as pesticides in the early 
stages of COVID -19 as well as labour shortages led to reduced yields.  
Chart 32: Food Commodity Price I ndex by subcomponents 
(January  2010  -November  2022)  
(Index 2010=100)   
 
Source:  World Bank Commodity Price Index Database.  
4.21.  Volatility in commodity prices has significant effects on SVEs' trade. Half (17) of 
SVEs are commodity -dependent . Table  4 shows that in M auritania and M ongolia , commodities 
accounted for  virtually all merchandise exports . Other SVEs in different regions from 
Papua  New Guinea  to the Plurinational State of Bolivia all had shares well above 90 %. 
4.22.  For commodity -dependent SVEs, on average some 42% of exports within main 
commodity groups could be explained by a single commodity both in 2019, prior to the 
COVID -19 pandemic, and in 2021.  This share was close to 47 % in the first half of 2022. In 
addition, over 46 % of total exports within the main expor t commodity group were exported to a 
single partner, up from 44 % in 2021. For SVEs dependent on exporting ores, metals, and precious 
stones, partner concentration remained consistently between 54 % and 58 % between 2019 and the 
first half of 2022.  
 
  
  WT/COMTD/SE/W/45  
 
- 34 - Table 4: List of SVEs Dependent on Primary Commodity Exports (2019 and 2021)  
SVE 2019  2021  
Commodity 
exports as 
share of total 
merchandise 
exports  Commodity 
exports as 
share of GDP  Exports by commodity group as 
share of total merchandise exports  Commodity 
exports as 
share of total 
merchandise 
exports  Commodity 
exports as 
share of GDP  Exports by commodity group as 
share of total merchandise exports  
Agricultural 
products  Fuels  Ores, 
metals, 
precious 
stones, 
and non -
monetary 
gold Agricultural 
products  Fuels  Ores, 
metals, 
precious 
stones, 
and non -
monetary 
gold 
Mauritania  98.9%  27.8%  40.6%  0.3%  58.0%  98.8%  35.1%  28.2%  0.7%  69.9%  
Mongolia  97.9%  52.5%  6.2%  46.6%  45.1%  98.8%  59.8%  4.0%  33.1%  61.8%  
Papua New 
Guinea  96.4%  44.4%  22.2%  29.8%  44.3%  97.2%  39.0%  23.6%  30.5%  43.0%  
Maldives  95.8%  6.2%  86.3%  7.7%   96.6%  5.3%  84.7%  7.1%  4.8%  
Ecuador  94.5%  19.5%  53.0%  39.2%  2.3%  93.9%  23.6%  52.8%  32.3%  8.8%  
Bolivia, 
Plurinational 
State of  94.0%  20.4%  16.2%  31.8%  46.0%  94.2%  25.6%  19.2%  22.3%  52.7%  
Jamaica  93.9%  9.8%  21.7%  22.9%  49.3%  93.4%  8.2%  23.9%  25.8%  43.7%  
Guyana  93.7%  28.4%  30.5%  0.0%  63.1%  87.6%  48.3%  24.0%  21.5%  42.1%  
Belize  88.0%  17.2%  75.4%  6.2%  6.4%  79.1%  10.3%  70.4%  4.6%  4.2%  
Vanuatu  84.2%  4.8%  83.4%  0.4%  0.3%  89.9%  4.8%  89.0%  0.7%  0.2%  
Seychelles  79.8%  24.6%  49.7%  29.9%  0.2%  87.2%  24.8%  62.4%  24.4%  0.4%  
Cabo Verde  78.7%  2.2%  74.8%  0.8%  3.0%  77.4%  2.0%  73.2%  0.7%  3.5%  
Tonga  77.9%  3.1%  75.6%  0.1%  2.2%  83.2%  3.8%  80.2%  0.0%  3.0%  
Samoa  77.8%  4.2%  68.5%  8.1%   56.2%  1.9%  52.9%  1.4%   
Fiji 76.4%  13.5%  54.0%  15.6%  6.8%  77.3%  14.7%  61.0%  7.1%  9.2%  
Saint Lucia  66.2%  2.6%  30.0%  31.6%  4.6%  59.0%  2.7%  28.6%  25.5%  4.9%  
Grenada  62.6%  1.8%  61.0%  0.0%  1.5%  63.4%  2.0%  61.7%  0.1%  1.6%  
Trinidad and 
Tobago  62.1%  18.7%  4.0%  56.5%  1.6%  68.1%  24.5%  3.8%  62.6%  1.7%  
Cuba  61.3%  1.2%  41.1%  3.2%  16.9%  55.8%  0.7%  36.3%  2.1%  17.3%  
Saint Vincent 
and the 
Grenadines  60.9%  2.6%  17.6%  43.0%  0.4%  62.4%  4.7%  17.9%  44.1%  0.4%  
Note:  Commodities include the following categories in SITC:  [0] Food and live animals [1] Beverages and tobacco [2] Crude material s, inedible, except fuels [3] Mineral fuels, 
lubricants and related materials [4] Animal and vegetable oils, fats and waxes [68] Non -ferrous metals [667] Pearls, precious and semi -precious stones [971] Gold, 
non-monetary (excluding gold ores and concentrates).  
Source:  WTO estimates  based on UNCTAD  Stats; IMF for GDP data . 
 WT/COMTD/SE/W/45  
 
- 35 - 
 
  4.23.  In several commodity dependent SVEs, as shown in Table 4, commodity exports contribute d 
significantly to GDP, with shares peaking at almost 60 % for Mongolia  in 2021 , 48.3% in Guyana, 
and 39 % in Papua New Guinea. In Trinidad a nd Tobago, Seychelles, the Plur inational State of Bolivia, 
and Ecuador, the range was between 24 % and 25%. In general, the overall share of commodity 
exports in GDP of all SVEs significantly exceeded that of the rest of the world .  
Chart 33: Share of Primary Commodity Exports in GDP in SVEs, 2010 -2021  
(Percentage)  
 
Note:  Commodities include the following categories in SITC:  [0] Food and live animals [1] Beverages and 
tobacco  [2] Crude materials, inedible, except fuels [3] Mineral fuels, lubricants an d related materials 
[4] Animal and vegetable oils, fats and waxes [68] Non -ferrous metals [667] Pearls, precious and 
semi-precious stones [971] Gold, non -monetary (excluding gold ores and concentrates).  
Source:  WTO estimates based on UNCTAD  Stats; IMF for GDP. 
4.24.  Chart  34 highlights the risks faced by commodity dependent  SVEs face due to volatile global 
commodity markets. Although historically SVEs have on average higher commodity terms of trade 
than other economies, the variance in the commodity terms of trade for SVEs is almost 
10 times higher than in the rest of the world.  
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- 36 - 
 
  Chart 34: Commodity Ter ms of Trade for SVEs, June 2012 -July 2022  
(Index June 2012=100)  
 
Note:  Index used is Net Export Price Index (Individual Commodities Weighted by Ratio of Net Exports to 
GDP), with rolling weights.  
Source:  IMF Commodity Terms of Trade Database. Aggregates c alculated by the WTO. 
4.25.  Product concentration, low partner diversification, and high reliance on commodity export 
revenues, increase SVEs' vulnerability to shocks. In 2020, real GDP declined by 6.5 % in 
commodity dependent SVEs, more than twice as much than in the world, while the 
increase in 2021 was essentially rebound growth . In other SVEs, mainly tourism -driven 
economies, the contraction in GDP in 2020 was even sharper ( -12.0%) as international tr avel 
collapsed due to  pandemic -related mobility restrictions. Secretariat's calculations based on IMF 
projections point to an average real GDP growth of 7.6 % in 2022 for commodity dependent SVEs, 
driven by spikes in commodity prices, and 5.5 % growth in 202 3.  
Chart  35: Real GDP growth in SVEs by commodity dependence (2020 -2023 projections)  
(Annual percentage change)  
 
Source:  WTO estimates  for SVEs based on IMF World Economic Outlook, October 2022.  
WT/COMTD/SE/W/45  
 
- 37 - 
 
  Case Study: Mongolia's dependence on metal and energy products  
4.26.  Mongolia has the highest export concentration among SVEs. Over the last decade, Mongolia's 
trade structure has remained stagnant and was dominated by energy commodities. In 2019, prior 
to the COVID -19 pandemic, expor ts of fuels and mining products, mainly coal and copper ores, 
formed 85 % of merchandise exports. On the imports side, petroleum oils accounted on average for 
20% of total merchandise imports.  
Chart 36: Mongolia's merchandise export s structure , 2019  
(Share in total merchandise exports)  
 
Source:  National data accessed through Trade Data Monitor (TDM).  
4.27.  Chart  37 shows the year -on-year growth in Mongolia's commodity prices for the main traded 
commodities. Rising coal p rices (the main exported commodity) which exceeded the growth rate in 
petroleum prices (a main import commodity) caused commodity terms of trade to improve  at the 
beginning of 2021. The de cline in both copper and iron ore prices combined with the rise in p etroleum 
prices as from February 2021 affected Mongolia's Commodity Terms of Trade, which contracted ( -3% 
in July 2022, the latest available period).  
Chart 37: Mongolia's Commodity Terms of Trade mirror commodity price trends  
(Year-on-year percentage change)  
 
Source:  World Bank for Commodity Prices, IMF for Commodity Terms of Trade.  
WT/COMTD/SE/W/45  
 
- 38 - 
 
  4.28.  Charts 38 and 39 show the effects of price volatility on Mongolia's export revenue from copper  
(HS2603)  and the value of petroleum  oils imports (HS2710) . Between the second half of 2020 and 
the first half of 2021 the export value and volume departed. The value of copper ores exports 
exceeded the volume , making production of copper more valuable.  
4.29.  However, the increase in petroleum price in  the second half of 2021 led to higher costs for 
the same quantity of imports. Although prices of Mongolia's main commodity exports have been 
trending upward, indicating an opportunity for Mongolia to integrate further into global trade, high 
inflation has  decreased the benefits from higher export revenues.  
Chart  38: Copper Ores (HS 2603): Export revenues are highly volatile  
(Thousand tons and million dollars)  
 
Note:  Mongolia saw a drop in total merchandise exports  in the last quarter of 2021 before rebounding in 
2022. Specifically , Mongolia's exports of c opper ores to China, volumes  fell 81%, partly due to a 
decrease in the quality of copper from the main production site . 
Source:  National data accessed through Trad e Data Monitor (TDM).  
Chart  39: Petroleum (HS2710): The cost of import s rises although quantities remain 
stable  
(Thousand tons and million dollars)   
 
Source:  National data accessed through Trade Data Monitor (TDM).  
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- 39 - 
 
  4.2.2   Inflation  
4.30.  Inflation has been on a sharp decline  since the global financial crisis,  falling from 9.2 % in the 
second quarter of 2008 to 2.3 % in the second quarter of 2018 in most countries.9 Structural factors 
including increased global economic integration, a shift towards more robust monetary and fiscal 
policy as well as flexible exchange rate regimes have aided disinflation.   
4.31.  The COVID -19 pandemic and the war in Ukraine have interrupted t his sustained 
period of low inflation.  High inflation is  currently  a worldwide phenomenon. At the end of 2021, 
annual inflation was above 5 % in 15 of 34 advanced economies, with other economies also 
witnessing a spike. Initially, price increases were confi ned to a small number of items such as energy, 
food, durable goods such as cars, electronics, etc., suggesting this was a transitory effect of relative 
price changes due to pandemic induced shifts in supply and demand. However, the share of items 
in the co nsumption basket which saw price increases rose significantly in 2021 flagging that inflation 
was broad based and not just a transitory phenomenon.10 In 2022, the war in Ukraine prevented 
the smooth flow of key products such as oil, gas, wheat, fertilisers , further adding to inflationary 
pressures.  
4.32.  In SVEs, inflation was at historically low levels in recent years. In 2019, the average 
annual rate was 2.0 %. Inflation fell to 1.3 % in 2020 as 13 SVEs recorded deflation reflecting 
the economic downturn at the peak of the pandemic. However, in the same year,  four economies 
(the Dominican Republic, Jamaica, Papua New Guinea , and Vanuatu) were already recording inflation 
above 5 %, with Vanuatu peaking at 6.6 %.    
4.33.  In 2021, inflation started to increase across SVEs,  reaching an average of 7.2 %, 
with Cuba, Mongolia, and Sri Lanka experiencing the highest rates.11 Compared with 2020, 
when 20 SVEs had an inflation rate of less than 2 %, by the end of 2021, their number had dropped 
to only 7. However, in Antigua and Barbu da, Guatemala, and Vanuatu the inflation rate was lower 
in 2021 than in 2020.  
Chart 40: Inflation in SVEs , 2016 -2021   
(Annual percentage change)  
 
Note:  End of period consumer prices.  
Source:  WTO estimates  based on IMF data.  
 
9 Global inflation is def ined as median consumer price inflation among all countries.  
10 A BIS study found that share of consumer baskets with high inflation rose to about 30% in Advanced 
economies and more than 50% in Emerging market economies.  
11 5% excluding Cuba.  
WT/COMTD/SE/W/45  
 
- 40 - 
 
  4.34.  In 2022, inflation continued to rise in SVEs.  The availability of inflation rates data for 
2022 varies across SVEs. In 23 SVEs  consumer price inflation reached an average of 8.1 % 
in October 2022 .12 The average inflation peaked at 8.3 % in August and has moderated slightly 
since reflecting easing of global inflationary pressures.  
Chart 41: Average inflation in 23 SVEs , March -October 2022  
(Year -on-year percentage change)  
 
Note:  End of period consumer prices.  
Source:  National data.  
4.35.  The chart shows year-on-year percentage increase in consumer prices in the year 2020, 2021 , 
and October 2022 for 23 SVEs for wh ich information is available until October. Inflation in SVEs was 
low in 2020, with some of them even facing deflation, but a series of exogenous shocks has led to 
sharp rise in inflation in 2021 which has remained persistent in 2022.  
 
12 Includes Anti gua and Barbuda, Belize, the Plurinational State of Bolivia, Cabo Verde, Dominican 
Republic, Ecuador, El Salvador, Fiji, Guatemala, Guyana, Honduras, Jamaica, Maldives, Mauritania, Mauritius, 
Mongolia, Nicaragua, Panama, Saint Vincent and the Grenadines, S amoa, Seychelles, Tonga, and Trinidad and 
Tobago. Starting with 2022, Sri Lanka is excluded due to extremely high inflation rates.  
WT/COMTD/SE/W/45  
 
- 41 - 
 
  Chart 42: Inflation in 23 SVEs, 2020 -2021 and October 2022  
(Year -on-year percentage chang e)  
 
Source:  IMF and national sources.  
4.36.  For SVEs not shown in the chart above, we notice a similar trend. For Barbados, inflation has 
moderated to 6.5 % in September 2022 after reaching the peak at 11.9 % in May 2022. In 2021, 
Cuba's inflation in consumer pr ices reached  77%, amid economic reforms that included the 
restructuring of currency regime, removing from circulation of the Cuban convertible Pesos and the 
devaluation of the Cuban Peso. Inflation has gone down from the levels seen in 2021 but remains 
extremely high at 37 % in September  2022. For four SVEs in the Eastern Caribbean  (Saint  Lucia, 
Grenada, Dominica, and Saint Kitts and Nevis)  information is available only until the end of 
March  2022. They all recorded spikes, with inflation in Saint Lucia at 6.5% and Dominica  at 5.3 % 
from 0.9 % and 0.5 % respectively in March 2021.  
4.37.  As in other economies, food prices are among the main drivers of the increase in 
consumer prices.  The lingering effects of the COVID -19 pandemic, supply chain disruptions , and 
severe  climatic events were already contributing to push food prices up. The war in Ukraine as well 
as the disruptions in the Black Sea, one of the major supply and transit hubs in the world for wheat 
and fertilizers, contributed  to even higher increases .  
4.38.  The F AO Food Price Index (FFPI), a barometer of world food price, measures monthly change 
in international prices of a basket of food commodities. This index reached 159.7, its highest level 
ever, in March of 2022 , which corresponds to a 34 % increase compared w ith the same period of 
2021. Prices rose across all the sub -indices with the biggest  rise in the prices of vegetable oils and 
cereals.  
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- 42 - 
 
  Chart 43: Food Price Index, January 2020 -October 2022  
(Index 2014 -2016=100)  
 
Source:  Food and Agricultural Organization of the United Nations (FAO).  
4.39.  Due to their reliance on food imports, the rise in global food prices globally is 
especially penalising  for SVEs . Even in countries with relatively low CPI inflation such as the 
Plurinational State of Bolivia and Ecuador, year -on-year inflation in food prices has increased , 
reaching 5.7 % and 7.6 % respectively in October 2022 compared to less than 1 % the previous year. 
In Cuba , which is not shown in the chart  below , food inflation in September 2022 incre ased by 58 % 
year-on-year.  
Chart  44: Inflation in "Food and non -alcoholic beverage s", October 2021 and 2022  
(Year -on-year percentage change)  
 
Source:  National sources.  
WT/COMTD/SE/W/45  
 
- 43 - 
 
  4.40.  Unlike in other SVEs, f ood inflation in Seychelles was already high in 2021. The prices of 
"other food " items were up 7.8 % in October 2021 , with oils and fats skyrocketing by 20 .3%, milk, 
cheese , and eggs by 10.7 %, and meat by 10 %. Contrary to other SVEs, food inflation rates have 
declined  in 2022. I n October , food inflation dropped to  only 2.45 %. 
4.41.  The impact of inflation, particularly food price inflation, is unequal across income groups  within 
countries . The current surge in food prices is particularly painful to the poor as they spe nd 
relatively more on food.  A recent  IMF study on inflation in smaller economies in Latin America 
and the Caribbean  finds that poorest quintiles have faced significantly higher rates of inflation than 
the richest quintiles. As of July 2022, the study repor ts, inflation for the bottom quintile was over 
2 percentage points higher than for the top quintile. T he increase in food prices could worsen  food 
security among the poorest in SVEs which had already deteriorated  during the pandemic. Fiscal 
support that is targeted towards the most vulnerable could be helpful to mitigate the impact of 
higher food prices  on them .13  
4.42.  Another important category in the consumer price index that has seen substantial inflation is 
transportation. The global increase in energy prices contributed to the rise in the cost of 
transportation services  in most SVEs.  In October 2022, t ransportation prices continued to 
increase, above  already high levels  October 2021 . The rise in prices in the transportation and 
logistics sector has ripple effects across the economy affecting the productive sector as well. The 
geographic remoteness of some SVEs entail s that they are highly dependent on transportation 
services particularly maritime and air transport systems for much of their consumption needs. T his 
means  that the global surge in shipping costs had a sharp effect on the costs of imported goods. For 
examp le, the cost of shipping a 40 -foot container from South Florida to Antigua had risen to 
USD 6,500 in the second half of 2021 from an average of USD 5,000.14  
Chart 45: Inflation in "Transportation" , October 2021 and 2022  
(Year -on-year percentage change)  
 
Source:  National sources.  
4.43.  Inflation in SVEs , as elsewhere,  is mainly driven by the rise in  energy and food prices . 
However, core inflation has also started to increase . Core inflation measures the change in the 
cost of go ods and services, except energy and food items . By excluding more volatile products whose 
 
13 Boz et al., "Smaller Economies in Latin America and Caribbean Face a Bigger inflation challenge face a 
Bigger Inflation Cha llenge". IMF, 2022. Smaller Economies in Latin America and Caribbean Face a Bigger 
Inflation Challenge (im f.org)  
14 Source: Antigua and Barbuda's Finance minister's budget speech 
https://ab.gov.ag/pdf/budget/Budget_Speech_2022.pdf  
WT/COMTD/SE/W/45  
 
- 44 - 
 
  prices could be influenced by seasonal factors or temporary supply conditions, core inflation gives 
us an indication of an underlying and persistent trend in inflatio n. The rise in core prices is an 
indication that inflation could become entrenched across the economy and monetary 
authorities might need to take contractionary measures to bring  it under control.   
Chart 46: Core inflation in select ed SVEs, 2021 to October 2022  
(Year -on-year percentage change)   
 
Source:  National sources.  
4.44.  In SVEs in Central America and the Caribbean core inflation is at a multi -decade 
high.  In October 2022, core consumer prices increased year -on-year by 10.0 % in Nicaragua, 8.9 % 
in Honduras, 6.9 % in the Dominican Republic,  and by more than 5% in El Salvador and Guatemala . 
In Antigua and Barbuda, core inflation peaked at 9.9 % year-on-year in J une 2022 but has moderated 
in recent months. The increase was reflected in all the major components with the index for 
furnishings, household equipment, and routine household maintenance increasing by 14.9 %.  
4.45.  In Cabo Verde, core inflation has been rising s teadily in 2022 reaching 7.1 % in September . 
For Mauritania and Samoa, core inflation rate increased by 12.6 % and by 15.5 % respectively over 
the 12 -month period ending in October 2022. In Mauritius, it was at 7.2 % in November, easing from 
7.5% in October. In Sri Lanka, core CPI reached 62.4 %. By contrast,  other SVEs such as the 
Seychelles, Panama, the Plurinational State of Bolivia, Vanuatu, Tonga, have not yet faced high core 
inflation.  
4.46.  Recent months have seen a slight moderation in inflation rates in many SVEs. The decline in 
global food and energy prices, combined with smoothening of supply chains and declining shipping 
costs have helped reduc ing pressure on prices. However, the rise in  core inflation rate is 
particularly significant as it is an indication that changes in individual prices have passed 
through to the broader economy . This raises not only the possibility of a sustained period of high 
inflation but could also give way to wa ge-price spirals - a self -reinforcing feedback between price 
and wage increases.  
4.47.  In October 2022, the IMF has projected the global headline consumer price index inflation to 
rise to 8.8 % in 2022 and decline to 6.5 % and 4.1 % in 2023 and 2024 respectively. The rebalancing 
of global demand towards services should help ease the inflation in goods. Despite the general 
decrease  across countries, the fall is estimated to be the steepest for major economies.  
4.48.  The IMF projects that the SVEs should experience signifi cantly lower inflation in 2023 , as in 
other countries . The average annual consumer price inflation in 31 SVEs (excluding Cuba 
and Sri Lanka) in 2023 is projected at 4. 1%, down from 7.5 % in 2022.  Nevertheless, in most 
SVEs inflation is expected to remain at  much higher level than prior to the COVID -19 pandemic.   
WT/COMTD/SE/W/45  
 
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  Chart 47: Inflation in selected SVEs, 2021 -2023  
(Year -on-year percentage change)  
 
* Excluding Cuba and Sri Lanka.   
Source:  IMF World Economic Outlook, October 2022.  
4.49.  Further negative shocks to food and energy prices could keep inflation higher for 
longer than projected.  The evolution of the war in Ukraine and geopolitical tensions will be 
particularly important for their impact on global energy prices. The occurrence of extreme weather 
events or resurgence of global health scare inducing supply chain disruptions could pu t again an 
upward pressure on food prices. Significantly, higher energy and food prices could further spill into 
core inflation leading central banks to take a more hawkish stance on interest rates which would 
have an impact on aggregate demand and therefo re inflation.  
WT/COMTD/SE/W/45  
 
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  Box 1: Exchange rate pass -through and Inflation Expectations  
Exchange rate fluctuations are significant drivers of inflation. The extent to which domestic 
inflation adjusts to exchange rate fluctuations is key to underst anding the dynamics of inflation. 
Empirical studies have found that generally higher trade and financial openness, weaker central 
bank credibility, volatile exchange rate and inflation are associated with higher Exchange rate 
pass-through (ERPTRs).15  
The nature of the shocks behind exchange rate movements could be crucial in assessing the 
direction as well as the magnitude of exchange -rate pass through to inflation. Most SVEs have 
very open economies but lack flexible exchange rates which makes them more v ulnerable to 
global shocks.16 Inflexible exchange rate constrains monetary policy effectiveness and makes it 
difficult to anchor inflation expectations.  
Since the beginning of 2022 until October, three SVEs recorded significant depreciation of their 
currencies (more than 10 % vis-à-vis the USD) – Cabo Verde (15 %), Mongolia (18 %) and 
Sri Lanka (80 %); weaker exchange rates could contribute to higher inflation in the future. The 
strengthening of the dollar due to interest rate hikes means, by definition, the weakening of other 
currencies.  
Monetary policy authorities should be aware of the inflationar y pressures currency depreciation 
might create. Most central banks are likely to pursue contractionary monetary policy to tame 
inflation and keep inflation expectation anchored in the future. Calibrating the right stance to 
inflation presents a formidable challenge to policymakers; doing too much might push economies 
into unnecessarily deeper recession while doing less might increase the risk of inflation becoming 
entrenched, de -anchoring inflation expectations, and raising the eventual cost of bringing inf lation 
under control. Challenges for smaller SVEs are even bigger given the knock -on effect of measures 
taken in major economies have on them.   
 
 
15 Ha, Kose, Onhsorge, "Inflation in Emerging and Developing Economies". World Bank, 2018.  
16 Ecuador, El Salvador, and Panama use the USD as their legal tender. Six other Eastern Caribbean 
SVEs have a common currency, the ECD, which is pegged with the USD. Eight other SVEs have a conventional 
fixed peg ar rangements against either a single currency or against a group of currencies. Only a few SVEs have 
a relatively freely floating currency. This categorization is based on IMF classification of exchange rate 
arrangements: https://www.imf.org/external/np/mfd/er/2004/eng/0604.html . WT/COMTD/SE/W/45  
 
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  Box 2: Inflation in Sri Lanka  
Sri Lanka has recently experienced the worst economic cri sis in its history. Shortages of essential 
food, fuel, and medicines, and rolling power blackouts led to protests and political unrest. With the 
currency plunging steeply and foreign reserves dwindling, Sri Lanka suspended payment on most 
foreign debt in A pril 2022, beginning the country's first sovereign default episode. Inflation 
accelerated in the second half of 2021 through 2022.  
In September 2022, year -on-year inflation as measured by National Consumer Price Index (NCPI) 
reached 73.7 %, with core price  inflation at 64.1 %. Food inflation reached 85.8 % while non -food 
inflation increased to 62.8 %. Inflation has moderated in recent months, with monthly inflation rates 
dropping from the peak of 10.9 % in June to -0.2% in November. According to the IMF, Sri La nka's 
inflation is projected to fall to 9.1 % in 2023 down from an estimated historical record of 69.8 % in 
2022.  
Chart 48: Inflation soared in Sri Lanka in 2022  
 
Source:  Central Bank of Sri Lanka.  
 
4.2.3   Supply chains disruptions  
4.50.  Lockdowns and border closures due to the COVID -19 pandemic disrupted the 
production and supply of crucial commodities . Expansionary fiscal and monetary measures 
implemented to help firms and households withstand income losses,  especially in advanced 
economies,  boosted consumers' spending on goods, as access to services was restricted.  
4.51.  Excess demand in a c ontext of supply constraints due to pandemic restrictions, 
created disruptions , which emerged in late 2020.  Uneven recovery from COVID -19 in different 
parts of the world and between different industries resulted in shortages of multiple products , 
increas ing the cost of essential production inputs. Since the supply chains disruptions affected "goods 
and services located upstream  – i.e., near the start of the production networks, the supply 
constraints had large spillovers across industries and countries" (BIS, 2022). This sent shocks 
through global supply chains and caused shortages in raw materials and intermediate goods.  For 
example, d emand for consumer electronics, due to lockdowns and remote working arrangements, 
surged and production could not catch up with a sudden and unprecedented demand.  This created 
a "bullwhip effect" and further amplified upstream risks.17 Spillover wa s seen in the production of 
semiconductor s, exacerbated by the sharp drop  in demand in the automotive industr y.  
 
17 The "bullwhip effect" refers to the demand for certain commodities suddenly rising after the decrease 
in demand for raw materials further amplified upstream risks in supply chains.  
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  4.52.  Pandemic -related  restrictions  in a context of high demand created s hipping and 
logistics bottlenecks  which boosted freight transport prices.  The cost of shipping a 40 -foot 
container increased eight times from a global average of USD 1,461 in the first week of 
January  2020, to USD 11,109 in the week of September 10, 2021 .18  
4.53.  Both the decline in trade in the early stages of the pandemic a nd the rise in transport costs 
in the recovery period were especially felt by SVEs. International payments for  maritime transport 
services  decreased by 16 % for SVEs in 2020,  reflecting lower volumes of impor ted goods . In the 
recovery phase of the pandemic , in 2021, the surge in shipping cost resulted in 48 % increase 
in the cost of international transport for SVE, significantly more than in the rest of the 
world ( 33%). 
Chart  49: SVEs' i mports of  sea transport  services , 2010 -2019 and 2020 -2021  
(Year -on-year percentage change)  
 
Source:  WTO estimates based on WTO Stats.  
4.54.  Belize, Ecuador, El Salvador, Guatemala, Nicaragua, and Panama  saw the highest increase s 
in shipping  costs. For a majority of SVEs,  in 2021, payments for international shipping were higher 
than in 2019. For Nicaragua and Belize in particular, these values more than doubled.  
 
18 Data on shipping costs are extracted from Freightos Baltic Index. https://fbx.freightos.com . 
WT/COMTD/SE/W/45  
 
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  Chart  50: Imports of s ea transport services of  select ed SVEs , 2010 -2021  
(Million USD)  
 
Source:  WTO estimates based on WTO Stats . 
4.55.  While indirect effects of supply chain s bottlenecks such as rising transport costs have global 
effects, countries directly involved in global production chains were more prone to risks 
due to supply chain disruptio ns. Trade in intermediate goods represents the fragmentation of 
the production process across borders, and therefore is a good indicator of both an individual 
country's integration into global value chains (GVCs) and the global evolution of supply chains.  
4.56.  In 2020, SVEs recorded a decline of 8 % in their trade in intermediate goods , as 
average of exports and imports, while for the rest of the world, the decrease was by 4%. 
SVEs saw more volatility, indicating the ir increased v ulnerab ility to shocks. In the second quarter of 
2020, SVEs' trade in intermediate goods contracted by 2 5%, while for the rest of the world recorded 
a 15% decline . 
4.57.  However, recovery in 2021 was quick and strong.  In Q2 2021, SVE imports sharply 
increased by 77 %, while exports increased by 70 %. By the end of the year, SVEs' exports were 44 % 
above their pre -pandemic level. For the rest of the world, total intermediate goods exports in 2021 
were only 23 % higher than in 2019.  
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  Chart s 51 and 52: SVEs' trade in  intermediate goods , Q1 2020 -Q2 2022  
(Year -on-year percentage change)  
 
 
Source:  National Data accessed through Trade Data Monitor (TDM) . 
4.58.  SVEs are primarily importers of wheat (HS100 199), corn (HS100590), and soybean 
oil (HS230400).  The availability  of these products  was heavily affected by the  war in 
Ukraine.  All of Mongolia's wheat imports, and 95 % of its corn imports were traded through the 
Black Sea. Around 80 % of Nicaragua's wheat imports, and about one third of Mauritania's corn 
imports also were also originated from the area therefore disrupted by the crisis.19 The crisis also 
heavily affected the supply of vegetable oils, including soybean and sunflower oil. Wheat  imports 
decrease d by 70 % in May 2022 following the crisis in Ukraine. Imports for corn and soybean oil also 
followed a similar trajectory, declining by 75 % and 57 % respectively in Jun e 2022.  
4.59.  SVE exports in intermediate goods are relatively less diversified compared to imports on 
average. The main intermediate goods exported by SVEs are coffee (HS090111), gold 
(HS710812), and copper ores (HS260300).  These three products made up approxim ately 
31.5% of total intermediate goods exports, and approximately 12.8 % of total exports for SVEs in 
2021.  
4.60.  Among these products, copper and gold exports showed high volatilities, and all 
three products followed clear upward trends, possibly driven by pric e increases.  In fact, 
after experiencing a decrease of 41 % in August 2020, copper exports strongly recovered following 
an increase of 249 % in August 2021. The increase in copper exports could also be driven by the 
 
19 WTO | The Crisis in Ukraine: Implications of the war for global trade and development  
WT/COMTD/SE/W/45  
 
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  increase in Panama's copper exports. For P anama, sharp increase in exports from the new 
Cobre  Panamá copper mine in the recovery period of COVID -19 led to an increase in the share of 
copper exports within total merchandise exports from 7 % in 2019 to 30.9 % in 2021.20 
Chart 53: SVEs' exports of main intermediate goods, January 2019 – November  2022  
(Million dollars)  
 
Source:  National Data accessed through Trade Data Monitor (TDM), estimated using mirror data for 
98 reporters on TDM.  
4.61.  Total coffee exports experienced the least volatility between January 2020 and 
November 2022, only following the expected seasonality of production.  The largest 
year-on-year decrease for coffee exports was 26 % in January 2021, a few months after the large 
disaster caused by hurricanes Eta and  Iota. This ties back to the resilience of coffee value chains in 
the main SVE coffee exporters: Honduras, Guatemala, Nicaragua, and El Salvador.  
4.62.  Resilience for supply chains is generally defined as the ability to absorb, adapt, 
and/or transform to unexpec ted shocks or events  by ensuring st able production and 
level s and exports . The coffee sector is particularly important for Central American SVEs, directly 
employ ing an estimated 1.2 million people in the region .21 Guatemala, Honduras, and Nicaragua , 
El Salvador ranked among the 1 8 global exporters of coffee beans  in 2019.  
4.63.  The COVID -19 pandemic hit Central America just after coffee harves t, causing loss of labour 
and infrastructure . The shock from the pandemic was further magnified due to st rong hurricanes in 
November 2020, causing considerable damages  and disruptions .  
 
20 Panama's economic recover y continues in Q3 2021 (eiu.com)  
21 Coffee in crisis offers a lesson in resilience: evidence from Guatemala (fao.org)  
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  Chart 54: Central American SVEs coffee exports , 2019 -2021   
(Thousand tons)  
 
Source:  National data accessed through Trade Data Monitor (TDM).  
4.64.  All four SVEs  saw decline s in the volume of  their coffee  exports  in 2020 . In Honduras, 
the largest exporter, coffee production was already suffering before the COVID -19 pandemic due to 
the rust outbreak in 2017 and c limate change. 22 Honduras  recorded the sharpest drops ( -32%). In 
Nicaragua and El Salvador export s decreased by 12 % each. In 2021, in Guatemala, howe ver, the 
quantity of coffee exported rose by 4 % above pre -pandemic levels while in Honduras  they 
remained depressed  (-10%).  
4.65.  A comparison of the y ear-on-year monthly evolution of exported coffee quantities reveals that 
Guatemala's exports were less volatile through the pandemic, despite large increases in 
global coffee prices.  The largest year -on-year decline in export quantities for Guatemala, 
El Salvador, and Honduras occurred between October and November 2020 , around the time of 
harvest . Guatemala recorded the smallest decrease ( -36%). Furthermore, through  2021, growth in 
the quantity of Guatemalan coffee exports remained relatively stable.  
 
22 Climate conditions were an important factor for the high rate of increase in coffee production in 
Honduras, causing coffee production in Honduras to expand in high altitude areas, and double in quantity 
(Fromm, 2022).  
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  Chart 55: Coffee exports of Central American SVEs,  January 2020 - August 2022  
(Year -on-year percentage change)  
 
Note:  Arabica production accounts for 97 % of total coffee production in Guatemala, 98 % for Nicaragua, 
100% for Honduras, and 100 % for El Salvador23. No monthly data available for Nicaragua for 2022.  
Source s: National  trade  data accessed through Trade Data Monitor (TDM) , for Global Coffee (Arabica) Price , 
Commodity Markets (worldbank.org)  
4.66.  Despite the many challenges faced, their participation in global coffee exports remained 
approximately stable thro ughout the pandemic, and the value of coffee exported exceeded its 
pre-pandemic level by 29 % in total in 2021.  
Chart 56: Share in global exports of coffee beans , 2019 -2021  
(Percentage share)  
 
Source:  WTO estimates based on Trade Data Monitor, 2022.  
 
23 25 Top Coffee -Producing Countries in 20 22 (elevencoffees.com)  
WT/COMTD/SE/W/45  
 
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  4.67.  A study by the International Food Policy Research (IFPRI) shows the resilience of coffee value 
chains linked to international markets in Guatemala through survey data.24 Smallholder coffee 
farmers in Guatemala suffered small, but insignificant changes to cultivated area for coffee, yield, 
or sales. Although they did report a small hit to profits and liquidity, these issues were handled 
through borrowing and savings. The resilience in coffee production could be an indicator of the 
efficiency of the cooperatives during COVID -19, as they provided cash transfers, facilitated credit 
access, and expedited coffee commercialisation, including transportation . This further proves the 
stability of coffee supply chains in Guatemala and gives wa y to the opportunity for higher 
investments for the coffee sector in Guatemala.  
Case study: Opportunity for the Plurinational State of Bolivia to increase natural gas 
exports  
4.68.  The economic recovery for the Plurinational State of Bolivia from COVID -19 has be en relatively 
quick, despite its heavy dependence on the energy and mining sectors – two industries which 
weathered the highest impact during COVID -19.  
4.69.  The Plurinational State of  Bolivia has the second -largest natural gas reserve in South America 
after th e Bolivarian Republic of Venezuela. Natural gas (HS271121) exports accounted on average 
for 11.4 % of the Bolivian GDP between 2010 and 2021. Natural gas exports have been declining 
since before the pandemic, due to weak production.25 Furthermore, there was  a decline in investment 
in the hydrocarbon sector, and in 2019, t he Plurinational State of  Bolivia announced a 30 % reduction 
in its gas reserves.26 
4.70.  Argentina, one of Bolivia's main destinations for natural gas, was suffering, as other countries, 
from risi ng natural gas prices caused by the Ukraine war in the first half of 2022. This, coupled with 
lower exports from the Plurinational State of Bolivia, which had declined by 9% between 2019 and 
2021 in volume terms, created a major energy shortage in Argentin a. Following talks, natural gas 
exports from the Plurinational State of Bolivia to Argentina increased by more than 14% 
year-on-year in volume in the third quarter of 2022. 27 In nominal U.S. dollar terms, this represented 
a 96% increase in exports, which h elped economic recovery. Supply chains disruptions caused by 
the COVID -19 pandemic and the war in Ukraine, created an opportunity to Bolivia to increase its 
exports of natural  gas by attracting demand, increase revenue, and potentially investments back to 
the energy sector.  
 
24 Assessing the impacts of COVID -19 on the coffee value chain in Guatemala: Evidence from coffee 
growers in the Midwest and East - IFPRI Publications Repository - IFPRI Knowledge Collections  
25 Argentina seeks Bolivia gas boost as LNG costs soar - sources | Reuters  
26 Argentina, Brazil set to lose most Bolivian gas imports by 2025 | Oil & Gas Journal (ogj.com)  
27 Argentina seeks Bolivia gas boost as LNG costs soar - sources | Reuters  WT/COMTD/SE/W/45  
 
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  Chart 57: Value and volume growth of the Plurinational State of Bolivia's natural gas 
export s 
(Year -on-year percentage change)  
 
Source:  National data accessed through Trade Data Monitor (TDM).  
4.71.  However,  the sustainability of natural gas exports as source of revenue is in question. Natural 
gas exports to Argentina fell back to pandemic levels in October 2022, which puts the Bolivian 
economy back in a precarious situation. Considering both the context of l ow national reserves, 
volatility in global energy markets caused by external shocks, and the global shift towards clean 
resources , the possible decrease in revenues from the hydrocarbon sector in the last quarter of 2022 
and 2023 might mark the beginning o f an involuntary energy transition.28 
Chart 58: The Plurinational State of Bolivia's n atural gas exports , January 2020 – 
October 2022  
(Thousand tons and million dollars)  
 
Source:  National data accessed through Trade Data Monitor (TDM).  
 
28 With its gas in decline, Bolivia faces an involuntary energy transition (dialogochino.net)  
WT/COMTD/SE/W/45  
 
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  4.3  Short -term services trade trends  
4.72.  Restrictions to cross -border movement of people, border closures, and strict lockdown 
measures implemented to fight the COVID -19 pandemic hit hard services, particularly in developing 
economie s. In SVEs, s ervices exports dropped 47 % to USD 44.2 billion in 2020, as 
international travel collapsed . This contraction represents an export loss of USD 39. 8 billion for 
SVEs just for 2020. SVEs were significantly more affected than the rest of the world, where 
services  exports decreased by 17 %. As a result, the contribution of SVEs to world exports of 
commercial services declined from 1.4 % in 2019 to 0.9 % in 2020. SVEs' services  imports also 
decreased by 31 %, and participation in global imports contract ed from 0.9 % in 2019 to 0.8 % in 
2020.  
Chart 59: SVEs exports of commercial services by main sector, 2017 -2021  
(Billion dollars)  
 
Source:  Secretariat estimates based on  WTO Stats. 
4.73.  Chart 59 shows the impact of COVID -19 on SVEs ' travel revenues, reflecting the sudden and 
abrupt drop in international tourist arrivals. In 2020, SVEs' travel exports fell 68% to 
USD 14.8 billion , recording an even more pronounced decline than in the rest of the world ( -62%). 
In 2021, travel restricti ons were partially removed in various countries. SVEs saw only a modest 
recovery, with exports increasing by 62 % year-on-year to USD 24 billion. Nevertheless, travel 
receipts remained depressed, at almost half their pre -pandemic levels.  
4.74.  Unlike other countr ies, which were sustained by resilient other services exports, excessive 
reliance on international tourism as source of revenue had a dramatic impact on the 
economies of many SVEs. The travel revenues loss es suffered just in  2020 represented  for 
Saint Lucia 34 .6% of its pre-pandemic GDP value , and 31.4% for both the Maldives and Grenada . 
In comparison,  in other SVEs, such as Ecuador or Trinidad and Tobago, the lack of tourist arrivals 
and their expenditure had no profound implications in terms of GDP , as the se economies  were 
sustained by oil exports.  
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  Chart 60: Travel revenues loss es in 2020  in selected SVEs  
(Million dollars ; percenta ge share in GDP  in 2019 ) 
 
Note:  Countries are ranked according to the share  of travel losses  in 2020 in the nominal GDP value in 
2019.  
Sources:  WTO estimates based on WTO Stats  and IMF . 
4.75.  In 2020, SVEs' transport exports  declined by 33 %, largely due to a 70 % drop of air 
passenger transport services.  Sea transport services  exports , in fact, were only marginally 
affected , decreasing only by 4 % in 2020 , as goods demand rebounded  quickly . Increased activity 
in SVEs is reflected in the exports of port services , which cover cargo handling such  as loading and 
unloading of containers, storage and warehousing, and freight forwarding services . Both Panama, 
the largest transport exporter , and other SVEs saw a rise . 
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  Chart 61: SVEs' port services exports, 2020 -2021  
(Annual percentage change)  
 
Sources:  WTO estimates based on WTO Stats. 
4.76.  In 2020, SVEs' o ther commercial services exports fell 12 %, significantly less than 
travel/tourism . Yet, while the rest of the world recorded an increase (+1 %), SVEs' 
exports dropped. In fact, SVEs saw declines even in sectors which continued to grow globally 
during the pandemic such as financial services. A comparison with the pre -pandemic period shows 
that, by the end of 2021, most su bsectors had not recovered to 2019 values, except for ICT services, 
largely due to computer services (+31 %), and insurance services (+4 %), reflecting increased freight 
insurance costs .  
Chart 62: SVEs ' exports of other commercial se rvices by selected sector, 2020 and 2021 
vs. 2019  
(Percentage change)  
 
Source:  WTO estimates based on WTO Stats . 
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  4.77.  Digitali zation  accelerated in SVEs  during the COVID -19 pandemic. H owever, SVEs 
were not able yet to transform it into higher exports of digitally delivered services.29 
According to WTO estimates, SVEs ' exports reached USD 13.35 billion in 2021, up from 
USD 12.1 billion in 2015. Digitally delivered services, a very dynamic component of global trade, 
accounted for less than a quarter of the group's services exports in 2021. Growth of SVEs ' digitally 
delivered services exports trailed the rest of the world.  While other economies expanded by 
14% in 2020, in SVEs the increase was negligible, by only 1 %. Growth accelerated in 2021, by 9 %, 
however , it remained well below world average. As a result, the participation of SVEs contracted 
from 0.55 % in 2015 to 0.36 % in 2021.  
Chart 63: Digitally delivered services exports by SVEs, 2015 -2021  
(Index 2015=100)  
 
Source:  WTO estimates based on the Trade in Services by Mode of Supply (TiSMoS) revised dataset 
(forthcoming).  
4.78.  Digitalization , or the lack of, directly affects countries participation in value chains.  
Intermediate services, or services serving as inputs to other econo mic activities as part of the 
production process of both goods and services, are largely delivered digitally at the international 
level. Stunted growth in digitally delivered services exports in SVEs poses challenges for 
the integration of SVEs into region al and global value chains . 
4.79.  On a positive note, some SVEs , such as El Salvador, Belize,  and Mauritius, saw important 
increases in their exports of computer services through the pandemic, suggesting potential for 
further growth . 
 
29 Note: Digitally delivered services cover cross -border supply (mode 1 of the General Agreement on 
Trade in Service s) of insurance and pension services, financial services, charges for the use of intellectual 
property n.i.e., telecommunications, computer and information services, and most categories of other business 
services, and of personal, cultural, and recreationa l services.  
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  Chart 64: Exports of computer services in selected  SVEs, 201 9-2021  
(Million dollars)  
 
Source:  WTO Stats portal.  
4.80.  The impact of the pandemic on individual countries varied. In 2021, services exports 
were well below pre -pandemic levels in virtually all SVEs. For Pacific Island SVEs such as Vanuatu, 
Fiji and Samoa, the decline in services exports was between 76% -91%. For Mauritius and Tonga, 
this drop was more than 50%. However , El Salvador and Belize recorded relatively lower declines 
(7% and 14% respectively) . By contrast, in the Maldives, services exports were 8 % above 2019 
values due to tourism. Despite lower tourist arrivals in 2021 compared with 2019 ( -29%), their 
expendit ure was higher (10 %). Similarly, Mauritania's services exports were also 3 % up, thanks to 
other business services and computer services exports which almost tripled in value.  
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  Chart 65: SVEs' e xport s of commercial services, 2021 vs 2 019 
(Percentage change)  
 
Source:  WTO Stats portal . 
4.81.  Only part of SVEs collect and compile trade in services statistics on a quarterly basis.  In the 
first half of 2022, services exports were still down 16% in 21 SVEs compared to the same 
period of 2019 , unlike in the rest of the world  which recorded a 17% rise. Travel receipts 
remained subdued, at 22 % below pre -pandemic levels, although on its path to recovery . Transport 
exports (excluding Panam a) were also depressed ( -23%). Exports of other commercial services 
exceeded by 9 % levels in the first half of 20 19, nevertheless growth was slower than in other 
countries . 
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  Chart 66: Trade in commercial services of 21 SVEs, January -June 2022 vs January -June 
2019  
(Percentage chang e) 
 
Note:  These 21 SVEs accounted for 61 % of SVEs exports and 76 % of SVEs imports respectively in 2019.  
Source:  WTO estimates based on WTO Stats . 
4.82.  The latest available data for selected SVEs show a rebound in tourism exports  
following the removal of stringent travel restrictions in most countries. The sector is heading to 
recovery also in most SVEs. Fiji's travel exports saw a recovered rapidly thanks to returning tourists 
from North America and Europe. However, in Q3 2022, t hey remained 22 % below their pre -pandemic 
value. Other prominent tourist destinations such as Mauritius also witnessed an increase in its travel 
receipts in the third quarter, although they were down 7 % compared  with 2019.       
Chart 67: Travel exports of selected SVEs, Q1 2019  - Q3 2022  
(Index Q1 2019=100)  
 
Source:  WTO Stats.  
4.83.  On the imports side, the surge in shipping prices, which started in the summer 2020 through 
May 2022, resulted in a 33 % increase in 21 SVEs' imports  of transport services  in the first half of 
the year compared with pre -pandemic levels . Available data for the third quarter of 2022 
suggest that in some SVEs stabilization is underway. However, others still suffer from 
high shipping prices .  
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  Chart 68: Transport imports of selected  SVEs, Q1 2019  - Q3 2022  
(Index Q1 2019=100)  
 
Source:  WTO Stats. 
4.4  Digitalization  and E-Commerce  
4.84.  Digitalization  has played a major role in changing how firms conduct economic 
activities . According to a firm -level survey (with a sample of 74 leading non -financial firms based 
in the Euro Area) conducted by the European Central Bank in spring 2018, between 80 % and 90 % 
of firms had adopted, or were in the process of adopting Big Data and cloud computing technologies, 
and 60% had adopted, or were in the process of adopting artificial intelligence.30 
4.85.  The COVID -19 pandemic accelerated digitalization  worldwide . Economic activities that 
belonged to the digital sector, or could be moved to digital spaces, were able to weather the shocks 
of lockdowns and border closures. More people started relying on the Internet for health -related 
information, entertainment, learning, shopping, and remote working .  
4.86.  SVEs also benefited from  increase d digitalization  and Internet penetration . According 
to available data, in 2020, on average 63.2% of individuals in 19 SVEs used the Internet , up from 
57.2% in 2019.31 SVEs followed a similar growth pattern, thi s represents a  lower  percentage  than 
the world average . 
 
30 "Digitalisation  and its impact on the economy: insights from a survey of large companies", ECB, 2018 . 
31 The average for 33 SVEs is available only until 2017, where it reached 50% up from 42% in 2015.  
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  Chart 69: Internet users in 19 SVEs  
(Percentage shares  of total population ) 
 
* It covers the following 1 9 SVEs :  Sri Lanka, Mauri tania, Honduras, Nicaragua, Guatemala, 
Saint Lucia, El Salvador, Grenada, the Plurinational State of Bolivia, Mongolia, Maldives, Panama, 
Cabo Verde, Mauritius, Ecuador, Cuba, Domi nican Republic, Seychelles, and the Bahamas .  
Source:  International Telecommunication Union (ITU) and WTO estimates.  
4.87.  In general, the percentage o f Internet use rs varie d significantly across SVEs  in the 
years before the pandemic, from a peak of 85.0% in the Bahamas in 2019 to just 11.2% in 
Papua  New Guinea  in 2017. In 2020, m ost SVEs with low Internet coverage before COVID -19 
experienced a spike. The Plurinational State of Bolivia and Ecuador recorded the highest increases . 
Other  countries , such as Mongolia and Sri Lanka also saw rises, however, rapid growth had started  
before the health crisis . Despite this acceleration, Sri Lanka had one of the lowest shares of Internet 
users in 2020 (35 %).  
Chart 70: Internet users  in selected SVEs  
(Percentage of total population ) 
 
Source:  International Telecommunication Union (ITU).  
4.88.  SVEs have a weak Internet infrastructure . Prior to the pandemic, b etween 2015 and 
2019, international bandwidth per internet user grew at an annual  average  rate of just 4% in 11 
SVEs for which data is available through 2020, compared with 27% for the world .32  
 
32 The average SVE international bandwidth per Internet user covers the following 11 SVEs: the 
Plurinational State of Bolivia, Cabo Verde, Cuba, Dominican Republic, Ecuador, El Salvador, Honduras, 
Mauritius, Mongolia, Seychelles, and Sri Lanka.  
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  Chart 71: International bandwidth per Internet user in selected SVEs , 2015 -2022  
(1000 kbit/s)  
 
* Average SVE includes the following 11 SVEs : Plurinational State of Bolivia, Cabo Verde, Cuba, 
Dominican Republic, Ecuador, El Salvador, Honduras, Mauritius, Mongolia, Seychelles, and Sri Lanka.  
Source:  International Telecommunication Union (ITU).  
4.89.  However,  the pandemic accelerated growth  in internati onal bandwidth usage in these 
economies, with Cuba, and the Plurinational State of Bolivia recording a 152 % and 116 % rise 
respectively. El Salvador, also saw a remarkable increase compared with the previous years.  Among 
the 11 SVEs, Mauritius, El Salvador,  and Honduras had the highest international bandwidth use in 
2020.  
Chart 72: International Bandwidth per Internet User (kbit/s)  in selected SVEs , 2015 -
2019 and 2020  
(Annual percentage change)  
 
Source:  International Telecommunication Union (ITU).  
4.90.  Readiness to adopt new digital technologies  varie s significantly across SVE s. The 
industry block in the UNCTAD Frontier Technology Index assesses the level of relevant industrial 
capacity for using, adopting, and adapting frontier technologies such as  artificial intelligence (AI), 
the Internet of things (IoT), big data, blockchain, 5G, 3D printing, robotics, and drones .33 In 2019, 
 
33 The index comprises five building blocks: ICT deploy ment, skills, R&D activity, industry activity, and 
access to finance. High -technology manufactures export (percentage of total merchandise trade) and digitally 
deliverable services exports (percentage of total service trade) were included in the industry r eadiness block. 
In 2019, the United Kingdom had the highest value (0.81).  
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  the latest available year, i ndustrial readiness varie d in SVEs. The highest readings were in Panama, 
Barbados, Papua New Guinea , and El Salvador.  
Chart 73: Industry readiness i ndex in selected SVEs, 2019  
 
Source:  Frontier technology readiness index, UNCTAD.  
4.91.  Digitalization  within business activi ties, especially activities related to e -commerce is 
estimated to continue to increase in the coming years. According to Nasdaq, by 2040, 95 % of total 
purchases are predicted to be made through e -commerce channels.34 Social networks have become 
the second most popular method global consumers use to search for products to buy.35 Industry 
and consumers' readiness in SVEs  are important for leveraging e -commerce opportunities.   
4.92.  The most recent World Bank COVID -19 Busines s Pulse Survey provides comprehensive 
insights into the short -term impact of the pandemic on formal sector enterprises in selected SVEs – 
El Salvador, Guatemala, Honduras, Mongolia, Nicaragua, and Panama. Overall, a  total of 2,381 firms 
were surveyed in tw o rounds: the first in June - August 2020 and the second between 
November  2020 and January 2021. The first round in Panama was held later, in June 2021,36  
4.93.  On average 46 % were small enterprises (<20 employees), 34 % were medium -sized 
(20-100 employees) and 18% were large enterprises (>100 employees). Some 12 % were 
considered exporters ( 10% or more of sales exported directly ) and a similar share were also  foreign 
owned . The share of surveyed firms in the services sector was higher (62 %) than those in 
manufacturing (38 %). 
 
34 What is the digital economy and what are its advantages? (bbva.ch)  
35 Top Ecommerce Trends 2023 + Must -Try Tips (shopify.com)  
36 For the purpose of this analysis, Panama is not included in Round 1 averages as its data was collected 
1 year after the rest of t he SVEs.  
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  4.94.  In January 2021, total online sales , both domestic and international,  increased in all surveyed 
SVEs, except in El Salvador. The share of online sales was higher in services firms than in 
manufacturing in all SVEs , growing m arginally b etween the first and second rounds of the survey.  
4.95.  On average 30 % of services sector firms started or increased online business activity at the 
beginning of the pandemic. By January 2021, this share increased to 48 %, reflecting a shift to digital 
business operations .  Firms in Honduras and El Salvador recorded the highest share (62 % each).  
4.96.  In Round 2, some 69 % of businesses in Mongolia had started or increased remote working 
arrangements for their employees . The survey shows also that r emote working arrang ements were 
higher in services firms than in the manufacturing sector. This can be explained by the different 
nature of the ir activities.   
Chart 74: Trends in online  sales and business activity in manufacturing and services 
sector f irms in selected SVES  
(Percentage shares)  
 
Source:  World Bank – Business Pulse Survey (October 2022).  
4.97.  In Panama,  large enterprises , especially in retail,  recorded a sharp rise in online business 
activity (72 %) compared with small (34 %) and medium -sized enterprises (51 %). However, despite 
digital presence , their share of online sales (10 %) was lower than firms in other services (18 %). 
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  4.98.  In fact, t he share of online sales in the total monthly sales was the largest for small enterprises 
at 17 %. This highlights the limited take up of e -commerce in the country despite a robust digital 
infrastructure that supported business es to transition towards digital operations. Exports oriented 
firms also recorded a higher share of online sales (31 %) than non -exporters (12 %). 
4.99.  As mentioned above, consumer readiness  to engage in e -commerce  is also equally 
important.  According to the survey -based World Bank Global Findex , in 2017, on average only 5 % 
of the population in 10 SVEs bought online using a mobile phone or the Internet, compared with 
26% for the rest of the world. This share more than doubled to 12 % in 2021, showcasing the role 
of COVID -19 in accelerating the digitalization  process and potential for e -commerce growth. For 
example, in Mongolia, people using a mobile phone or the Internet to buy online increased from 7 % 
in 2017 to 42 % in 2021, the largest rise among ten available SVEs.  
Chart 75: Share of the population making online purchases in selected SVEs, 2017 and 
2021  
(Percentage of the population age 15+)  
 
* Average 10 SVEs covers the Plurinational State of Bolivia, Dominican Republic, Ecuador, El Salvador,  
Honduras, Mauritius, Mongolia, Nicaragua, Panama, and Sri Lanka.  
Source:  The Global Findex Database 2021 (worldbank.org)  
4.100.   The use of in -store digital payments also provides important insights into 
consumer behaviour.   In 2021, in 8 SVEs , on average 18 % of the population aged 15 and above 
made a digital merchant payment, compared with 39 % in the rest of the world.  Around half ( 49%) 
were first time users. In comparison, for the rest of the world on average, only 38 % of the population 
were doing so for the first time in 2021. In SVEs such as the Plurinational State of Bolivia, Ecuador, 
Panama, and the Dominican Republic, between 47 % and 57 % were first time users, reflecting the 
boost from the pandemic to adapt to a higher level of digitalization  in the post -pandemic context.  
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  Chart 76: Population making  a digital in-store merchant payment , 2021  
(Percentage of th e population age 15+)  
 
Source:  The Global Findex Database 2021 (worldbank.org)  
 
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  Box 3: Digitalization  and e -commerce in Mauritius  
Among SVEs, Mauritius has on e of the highest rates of digital development and Internet penetration. 
In 2021, most Mauritians owned a financial institution account (91 %) and made or received a digital 
payment (80.1 %). Between 2017 and 2021, the proportion of Mauritians using digital payment 
methods significantly exceeded that of the world (64.1 %). 
Despite these positive trends, the share of people shopping online remained low, with the percentage 
of the population using a mobile phone or internet to buy online in 2021 at less than 20 %, compared 
with 39 % for the world.  Unlike advanced economies, higher access to the Internet and digital 
financial institutions has not yet translated into higher numbers of online shoppers. The COVID -19 
pandemic was not accompanied by a more rapid growth in the number of online shoppers, which 
rose by only 33 % between 2017 and 2021 in Mauritius, compared with 60 % for the world.  
Chart 77: Mauritius, share of online shoppers and use of digital payments  
(Percentage of the population age 15+)  
 
Source:  The Global Findex Database 2021 (worldbank.org)  
According to a consumer survey in Mauritius (WTO, 2021), there were three main reasons for 
consumers no t buying online: payment, navigation, and uneasiness with the internet. The biggest 
reason cited by consumers was inability to touch and analyse the items, closely followed by distrust 
of online payment service, and lack of customer service in online store s.37 
In terms of business processes, the share of enterprises of all sizes receiving orders over the Internet 
(which also captures B2C interactions, increased from 36.6 % in 2010 to 52.1 % in 2020, which is 
similar to the growth trajector ies of countries suc h as Australia and India.  
Chart 78: Share of enterprises receiving orders over the Internet, 2010 -2020  
(Percentage)  
 
Source:  Beyond 20/20 WDS - Table view - Core indicators on ICT use in business by enterprise size class, 
annual, 2003 -2021 (unctad.org)  
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  The accelerated rise in both consumers and businesses shifting to digital spaces has led to Mauritius 
being transformed into a tech hub and topping the UNCTAD B2C e -commerce (e -readiness) index for 
Africa in 2018.38 However, due to the reasons cited above, there is a disconnect between the 
"readine ss" of Mauritius to adopt digital technologies, and consumers in Mauritius shopping online. 
Higher investments towards educating the population on new technologies and higher online security 
could help.  
 
 
37 Opportunities and challenges of e -commerce in Mauritius (wto.org)  
38 Oppor tunities and challenges of e -commerce  WT/COMTD/SE/W/45  
 
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  Box 4: Digitalization  and e -commerce in Panama  
Prior to the pandemic, the share of individuals using the internet in Panama significantly exceeded 
global and SVEs averages, and a higher percentage of the population was covered by at least a 3G 
mobile network. To keep up with consumer needs and lockdown requirements, 31 % of traditional 
banks implemented 100 % digital account opening, and 18 % of these banks installed contactless 
payment methods.39 The digitalization  of payment methods facilitated consumers' access to online 
shopping durin g lockdown.  
However, despite a strong digital infrastructure, and the readiness of both consumers and 
businesses to adapt frontier technology, the proportion of population shopping online in Panama 
only grew from 6 % in 2017 to less than 14 % in 2021. This is significantly lower than the world 
average, which rose from 24 % in 2017 to 39 % in 2021.  
 
Chart 79: Panama - Percentage of online shoppers, 2017 -2021  
(Percentage of the population age 15+ ) 
 
Source:  Data (worldbank.org)  
According to the World Bank Global Findex Survey, the highest accessibility gaps in Panama were 
related to income and education parities . Survey data suggests that people in Panama belonging to 
the richest 60 % of the population were approximately 4 times as likely to use a mobile phone or 
the Internet to buy online. Between 2017 and 2021, the increase in the percentage of online 
shoppers was largely dri ven by individuals with secondary education or higher, from 8.1 % in 2017 
to 18.7 % in 2021. By contrast, Panamanians with primary education or lower who shopped online, 
which was nil in 2017, remained very low, at 2.1 % in 2021.  
 
 
39 The impact of the digital economy on creating new trade opportunities (lae strella.com.pa)  
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  Box 5: Digitalization  and e -Commerce in Guatemala  
The e -commerce industry in Guatemala grew by 164 % between 2020 and 2022.4041 According to 
the Guatemalan Chamber of Commerce, unemployment was one of the main drivers of the rise 
of e-commerce in Guatemala post -COVID. The unemployment rate in Guatemala reached 3.6 % 
in 2020 after three consistent years of decreasing unemployment levels. Lack of employment 
caused people to sell on online platforms and through social media, shifting retail to digital spaces.   
Additi onally, the existing digital infrastructure in Guatemala allowed consumers to access the 
internet and buy products online. According to the ICT index, Guatemala ranked higher than the 
other SVEs on average in 2019. Furthermore, 95 % of the population was co vered by at least a 
3G network in 2021 (ITU, 2022).42 
A shift in consumer behaviour towards utilising new technologies and digital spaces more for 
economic activities is also necessary to establish the e -commerce industry in the domestic 
economy in Guatema la. According to a survey conducted by the Chamber of Commerce in 
Guatemala, the top 5 reasons for online shopping given by consumers included the efficiency of 
buying online in terms of time, logistics, and the ease of using online platforms.  
Despite the large increases in both the ICT index and revenue from e -commerce, the level of 
digitalization  in Guatemala remains on the lower end of the world average. The B2C e -commerce 
readiness index calculated by UNCTAD, Guatemala ranked 108th out of 152 countries,  and 12th 
among the 15 available SVEs.  
One of the main issues with the e -commerce industry in Guatemala is low trust in the postal 
services which ranked last in terms of postal reliability.43 One of the main reasons for not shopping 
online was possible delivery delays. Other reasons were the fact of not being able to see the 
product before buying, high shipping costs, no advice on online purchases, and distrust of online 
payment systems and da ta handling.  
 
4.5  Foreign Direct Investment (FDI)  
4.101.   Strict public health measures to fight the COVID -19 pandemic, and the difficult economic 
context, have also affected foreign investment decision of firms. In 2019, UNCTAD had projected a 
stable level of globa l FDI flows in 2020 -2021 with a potential increase of 5 %. The projection was 
subsequently revised, with global FDI flows expected to drop between 5 % and 15 %, depending on 
the spread of COVID -19.44  
4.102.   However, the impact of the COVID -19 pandemic on FDI went w ell beyond projections. In 
2020, global FDI fell 35 % to USD 963 billion from USD 1.48 trillion in 2019.  Developed 
economies were more adversely affected than developing economies with flows in 2020 contracting 
to USD 319 billion from USD 764 billion in 2019 – a drop by 58 %. For developing economies, the 
decline was not as dramatic as flows dropped by only 1 0%.45 In 2020, foreign investment into 
developing nations accounted for 67 % of global foreign investments, an increase of 18 % from the 
previous year.  
 
40 What potential does e -commerce have in Guatemala? (republica.gt)  
41 eCommerce - Guatemala | Statista Market Forecast  
42 Statistics (itu.int)  
43 THE UNCTAD B2C E -COMMERCE INDEX 2020, Spotlight on Latin America and the Caribbean  
44 Economies that were more seriously hit by the pandemic were expected to be affected the most but 
negative shocks on consumer demand, supply chains disruption, an d lower multinational profits were likely to 
adversely affect investment into most economies. Source: https://unctad.org/news/coronavirus -could -shrink -
global -fdi-5-15. 
45 UNCTAD classification of developed and developing economies.  WT/COMTD/SE/W/45  
 
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  Chart 80: Global FDI inflows, 2016 -2021  
(Billion dollars)  
 
Source:  UNCTAD World I nvestment Report 2022.  
4.103.   FDI inflows recovered strongly in 2021, increasing by 64 % to USD 1.582 trillion,  
with flows into developed economies up by 134 % accounting for most of global growth. Loose 
financing conditions, infrastructure stimulus packages, rapi d growth in international project finance 
and booming merger and acquisition market were the main factors behind the recovery. In 
developing countries FDI inflows rose by 30 % reaching USD 837 billion, the highest level ever 
recorded and accounted for 53 % of total flows.  
4.104.   The pandemic significantly affected both the number of new greenfield 
investments as well as cross -border merger and acquisition (M&As) . In 2020, the number 
of new greenfield FDI projects dropped 38 % globally to 13,248. Recovery in 2021 rem ained weak. 
Similarly, there were fewer cross -border M&As in 2020 compared with 2019. In 2021, in developing 
economies, cross -border M&As increased by 31 % in value while the total number of greenfield 
investments increased by 16 %.  
4.105.   The global climate in 20 22 has not been favourable for FDI flows.  The war in Ukraine, 
geopolitical tensions, high inflationary environment, and a series of interest rate hikes in advanced 
economies have brought in uncertainty and downward pressure on cross -border investments in 
2022. New project activity is expected to suffer in coming years.  
4.106.   SVEs receive only a small fraction of global FDI flows, only 1.4 % on average in the 
three years preceding the pandemic, or USD 21.5 billion. In 2020, FDI inflows dropped by 
36% to USD 13.3 b illion.  However, SVEs' share in global investment flows remained somewhat 
stable as also the rest of the countries saw a contraction. In 2021, FDI flows to SVEs almost 
recovered to pre -pandemic levels reaching USD 19.1 billion.  
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  Chart 81: SVEs receive only a fraction of global FDI flows  
(Billion dollars and percentage)  
 
Source: WTO estimates  based on UNCTAD.  
4.107.   Investment to SVEs targets only a few countries.  Four economies – Panama (20.7 %), 
Dominican Republic (14.2 %), Mongolia (9.5 %), and Sri Lanka (5.8 %) – received half of all average 
foreign investment in the three pre -pandemic years. By contrast, for many SVEs, 17 in total, the 
share was below 2 %.  
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  Chart 82: Average FDI flows  into SVEs  between 2017 -2019  
(Million dollars; percentage share  in the group ) 
 
Source:  WTO Secretariat calculations based on UNCTAD data.  
4.108.   FDI plays an important role in SVEs . Of the 33 SVEs, 15 received investments that, in 
value, represented more than 5 % of their average GDP between 2 016 and 2019, and for 7 SVEs, it 
was above 8 %. However, for a third of SVEs, amounts accounted for less than 3 % the average value 
of their GDP in the period.46  
4.109.   The COVID -19 pandemic affected SVEs unevenly. In 2020, some SVEs suffered 
sharp contractions wh ile a few received even more flows compared with 2019 . The 
Bahamas, Barbados, Ecuador, Guyana, Nicaragua, Mauritania, Samoa, and Tonga were among those 
that received more flows. However, for the latter, amounts were very small. The greatest increases, 
by more than 50 %, were recorded in the Bahamas and Nicaragua.  
 
46 No available FDI inflows data for Cuba.  
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  Chart 83: FDI inflows into SVEs, 2019 -2021  
(Million dollars)  
 
 
 
 
Source:  UNCTAD.  
4.110.   Despite the effects of the pandemic, FDI inflows in Mauritania increased by 5% in 2020 due 
to rising flows from China. Most investments targeted oil exploration and exploitation, mineral mining 
of iron ore and gold, telecommunications with the acquisition of mobile phone licenses , and the 
construction sector. However, t he country witnessed a drastic drop in inflows in 2021.  
4.111.   In 2021, Nicaragua secured a project finance deal worth USD 280 million for a geothermal 
power project.  Attempts to diversify into ren ewable energy, artistic, and creative industries saw also 
Barbados attracting 22 % more FDI in 2020 than in 2019. Barbados made legal and regulatory 
changes to encourage investment in infrastructure and renewable energy in 2020.  
4.112.   However, of the 8 SVEs that  saw an increase in FDI inflows in 2020 compared with 2019, 
only 3 – Barbados, Nicaragua, and Samoa – received more inflows in both 2020 and 2021. This flags 
the difficulty in maintaining consistent levels of foreign investment for most SVEs in the 
current economic context.  
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  4.113.   Countries which saw a decline of at least 50 % in 2020 include the Plurinational State of 
Bolivia, Dominica, El Salvador, Jamaica, Maldives, Panama, Saint Kitts and Nevis, Saint Lucia, 
Saint Vincent and the Grenadines, and Trinidad  and Tobago.  
4.114.   Although FDI recovered in 2021, amounts were still considerably lower than the 
pre-pandemic average.  SVEs that saw a significant decline in 2020 were slow to recover in the 
post-COVID -19 period. Only the Plurinational State of Bolivia attract ed more investments in 2021 
than it did pre -pandemic when the flows were negative due to two consecutive years of 
divestments.47 
4.115.   FDI flows contracted also in several SVEs in the Caribbean – Antigua and Barbuda, Dominica, 
Saint Kitts and Nevis, Saint Lucia, and Saint Vincent and the Grenadines. Countries that provide 
fiscal incentives such as reduced taxes for financial institutions,  MNEs, as well as foreign citizens 
looking for tax advantages might have been adversely affected by the pandemic due to the reduction 
in demand. Recent international efforts to tackle tax avoidance is likely to reduce foreign direct 
investment attraction a dvantages for SVEs offering these services.  
4.116.   In Africa, Mauritius and Cabo Verde saw significant declines in foreign investment in 2020. 
In Mauritius, flows dropped almost by half, with real estate, which accounted for the main share, 
particularly hit. In Cabo Verde, FDI inflows fell by some 30 % with tourism sector as the most affected 
sector.  
4.117.   Only few SVEs compile FDI statistics on a quarterly basis. According to available information, 
in the first quarter of 2022, FDI flows continued to recover. However,  the war in Ukraine 
and interest rate hikes to fight inflation in major economies which squeeze funding, are 
presumed to have affected FDI flows.  
 
47 The Plurinational State of Bolivia experienced significant divestments in both 2019 and 2020 of 
USD -220 million and USD -1.1 billion also due to economic, social, and political factors. The pandemic induced 
economic slowdown led to a sharp contraction in GDP in 2020 of -7.7% which further worsened the situation.  WT/COMTD/SE/W/45  
 
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  Box 6: The impact of the Global Minimum Tax on FDI  
 
Tax policies and international inves tment are closely linked. From determining the location and 
the scale of investment, where and how much taxes are paid on the returns from those 
investment, to the level of competition among countries to attract foreign investment, tax policies 
are an impo rtant element of global investment architecture. Countries frequently resort to 
tax-related policies like reduced corporate income tax rate, tax holidays, etc., to make themselves 
the most attractive location for foreign investment. However, this has led t o a damaging tax 
competition between countries; a race to the bottom to reduce income tax rates. Moreover, 
international investors as well as MNEs, because of their globalized structure, can disconnect 
profits from real economic activity to low tax locatio ns and pay lower taxes. Efforts have been 
made to reform the international tax system to curb profit shifting and to make international tax 
system fairer and more transparent. The global minimum tax on corporate income is an important 
step in that directio n.  
 
The introduction of a minimum tax of 15% on the foreign profits of the largest MNEs as part of 
Base Erosion and Profits Shifting (BEPS) project of OECD/G20 has important ramifications for 
international investment. In 2020, BEPS participants agreed on a two -pillar approach to "restore 
the nexus between where value added activities take place and where profits are taxed". Pillar I 
seeks to realign the reporting of MNE profits with value creation and Pillar II proposes a global 
minimum tax on the profits of MNEs with revenues of more than €750 million. While Pillar I is 
mostly expected to be investment neutral, Pillar II is likely to have a far -reaching consequence 
for FDI recipient countries, especially those that attract FDI by offering fiscal incentives  such as 
some of the SVEs that serve as financial centres. Low -tax countries are likely to be on the losing 
side of this reform.  
 
Higher taxes are likely to affect all three aspects of foreign investment: volume, distribution, and 
route. UNCTAD estimates an increase in tax liabilities faced by MNEs on their FDI of about 15% 
as a result of reduction in profit shifting and adjustment of host countries' ETRs to global 
minimum. Higher corporate taxes will put an upward pressure on costs which might result in a  
decrease in total volume of FDI. UNCTAD estimates that the effect of increase in corporate income 
tax on global FDI volume to be between -1% to -4% depending on the assumptions made on tax 
elasticity of investment and the level of profit -shifting post -Pillar ll. Under a baseline scenario of 
partial profit shifting post -Pillar ll and tax elasticity of investment of -1, global FDI is estimated to 
drop by about 2 %.   
 
The introduction of the global minimum tax rate will reduce tax differentials between host 
countries. Investment can be expected to be diverted from low -tax countries to higher -tax 
countries as investors base their decision on other critical economic, institutional and political 
fundamentals. Offshore financial centres (OFCs), which includes some  of the SVEs, may lose the 
most with the diversion effect estimated to be -4.0% and developing economies are likely to gain 
the most. The increase in inflows particularly in developing economies due to the diversion effect 
is likely to nullify the losses c aused by the volume effect.  
 
Lastly, Pillar ll will also lead to MNEs establishing direct links with host countries rather than using 
financial centres as conduits. This will likely result in dismantling of FDI stock in OFCs. Assuming 
the decline in FDI s tock in OFCs as a result of Pillar ll is the same as expected reduction in profit -
shifting, the effect on total FDI stock would range from -10% (under baseline scenario of partial 
reduction in profit shifting) to -35% (under full elimination of profit shif ting). SVEs that have 
benefitted by serving as conduits for foreign investment should be aware of the effects of massive 
disinvestment and subdued flows thereafter could have on their economies.  
 
Details of Pillar ll still need to be defined. Therefore, i t is imperative that SVEs enhance their 
capabilities and strengthen cooperation to effectively participate in the process. Meanwhile, 
improving on metrics that are likely to matter more after the implementation of global minimum 
tax such as business climat e, infrastructure and workforce quality, political and economic stability 
should be prioritized to attract and retain more foreign investment in the future.  
 
Source:  WTO Secretariat based on World Investment Report UNCTAD, 2022.  
 
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  Box 7: The impact on FDI in Mauritius, Sri Lanka, and Cabo Verde  
Mauritius  
Mauritius' economy declined by 15% in 2020 mainly due to the contraction in tourism activity. 
The tourism sector which traditionally contributes around 24% of GDP an d accounts for 22% of 
employment, incurred an estimated loss of 75% in value added. Exports of seafood, textiles and 
apparel, and sugar were adversely affected by disruptions in global demand.48   
In 2020, FDI contracted by 21% to Rs. 16,944 million from R s. 21,337 million. Investment in real 
estate which represents a large share of foreign inflows declined by 43%. After real estate, the 
financial and insurance sector received the largest investment. A significant share of foreign 
investment into Mauritius originated from Europe (50% in 2019 and 61% in 2020).  
In 2021, FDI inflows fell further to Rs. 15,417 million, with flows from Europe dropping by 40%. 
This was due to a drop in investment in manufacturing sector which returned to pre -pandemic 
levels after a sharp rise in 2020. There are some signs of recovery in 2022. In the first quarter of 
2022, FDI reached Rs. 4,692 million compared to Rs. 2,638 million in the same quarter of 2021, 
with inflows from Europe almost doubling.  
Source:  Bank of Mauritius.  
Sri Lanka  
In Sri Lanka, FDI inflows dropped by about 43% in 2020. As demand from the United States and 
the European Union for garments, one of Sri Lanka's main exports, fell due to the pandemic, 
foreign investment in the industry contracted. Garment exports picked up in 2021 and have risen 
steadily in 2022 which can revive foreign interests in this sector. Despite the economic crisis, 
during the first quarter of 2022, Sri Lanka attracted USD 226 million in committed projects, a 
16% year -on-year increase, and aims to bring in over a USD 1 billion in 2022.49 The Bank of 
Sri Lanka reports that FDI inflows reached almost USD 300 million in the first two quarters of 
2022, hinting that the country might reach the same level as 2021, although this is considerably 
lower than pre -pandemic years.  
Source:  Bank of Sri Lanka . 
Cabo Verde  
In 2020, Cabo Verde's economy contracted by 15%. Foreign investment into the country fell by 
30% from USD 103 million in 2019 to USD 73 million. The dop in tourism due to the pandemic 
affected investment in the tourism sector. Investment from Western Europ ean countries, 
particularly Spain and Portugal – Cabo Verde's traditional investment partners – declined 
considerably.  
In 2021, FDI rebounded to pre -pandemic levels thanks to a surge in investment from Portugal. 
Data for the first two quarters in 2022 sho w steady levels of foreign investment. However, 
significant downward pressures due to uncertain geopolitical context, high inflation, and tighter 
financing conditions, may lead to subdued investment in the second half of 2022 and 2023.  
Although Cabo Verde  has a small market size, lack of natural resources, and vulnerability to 
external shocks, other aspects including its strategic location close to the West African market are 
enticing for foreign investors. Recent efforts to develop the country's maritime economy such as 
the development of Special Economic Zone around the islands of S ão Vincente and Maio offer 
investment possibilities into activities such as port management, ship repair, fisheries. The 
government's recent attempts to promote clean energy is  expected to open investment 
opportunities also in the renewable energy sector.  
Source:  Banco de Cabo Verde.  
 
 
48 African Economic Outlook, 2022. Source: https://www.afdb.org/en/countries/southern -
africa/maurit ius/mauritius -economic -outlook  
49 Sri Lankan exports plummeted to USD 4,156 million in 2020 from USD 5,304 million in 2019. In 
2021, exports recovered to USD 5071 million and reached USD 4,301 million by September of 2022. 
Source:  https://srilanka -apparel.com/export -performance/summary?m=9&y=2022 . Information on FDI in the 
first quarter of 2022 was obtained from https://www.reuters.com/markets/commodities/crisis -hit-sri-lanka -
hopes -over-1-bln-foreign -investment -this-year-2022-06-03/. WT/COMTD/SE/W/45  
 
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  4.118.   As shown above, some SVEs in Central American region are among the largest receivers 
of FDI with the economies of Panama, Dominican Republic, El Salvador, Guatemala, Honduras, and  
Nicaragua receiving an average of 51 % in the three years prior to the pandemic. FDI in these  
six economies dropped by 43 %, from USD 9.7 billion in 2019 to USD 5.5 billion in 2020. However, 
investments into the region rebounded the following year reaching $10.6 billion, which is higher than in 
2019.  
Chart 84: FDI in selected SVEs  
(Million dollars)  
 
Source:  UNCTAD . 
4.119.   Panama , the largest recipient of FDI among SVEs , saw investment  contract to USD 607 million 
(from USD 4063 million in 2019) with mining, construction , and wholesale and retail trade sectors 
experiencing the sharpest decline.  
Chart 85: FDI inflows into Panama , 2017 -2020  
 
Source:  Consejo monetario centroamericano . 
4.120.   The Dominican Republic too suffered a decline in investment in the mining, and information 
and communication sectors. Investment into the mining industry fell to USD -6.5 million in 2020 (from 
USD 225 million in 2019) but rebound ed sharply in 2021 (USD 472 million). The chart below presents a 
sectoral breakdown of foreign investment between 2018 and 2021 for Nicaragua, Honduras, 
Dominican  Republic, El Salvador,  and Guatemala.  
WT/COMTD/SE/W/45  
 
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  Chart 86: FDI into selected SVEs by sector , 2018 -2021  
(Million dollars ) 
 
Source:  Consejo monetario centroamericano . 
4.121.   Decline in foreign investment in  the information and communication sector was sizable. 
Investments dropped from $1.28 billion in 2019 to $309 million in 2020. The decline was broadly felt as 
flows into the Dominican Republic, Guatemala, Honduras, and Panama contracted. The only exceptions 
were El Salvador, which received more foreign investment in 2020 than in 2019, and Nicaragua where 
investment remained stable. Flows into Dominican Republic and Honduras remained subdued in 2021 
whereas for Guatemala owing to a single deal worth $2. 2 billion  reached a total of USD 2.3 billion in 
2021.50 Investment into agriculture, forestry and fisheries, real estate activities, and manufacturing were 
not affected by the pandemic.  
4.122.   Investment from North American economies (United States, Canada, and Mexico) h as historically 
constituted the largest fraction of flows into the region. Foreign direct investments from North America 
dropped by 35 % from around $5 billion in 2019 to $3.2 billion in 2020. Th is decline was particularly 
harshly felt by Guatemala and El S alvador. However, FDI into Guatemala from North America recovered 
the following year which is consistent with the recovery of North American investments in the region 
generally. For most Central American SVEs, flows from Europe also returned to pre -pandemic levels.  
 
50 The deal represents the largest ever single foreign dire ct investment in Guatemala. 
Source:  https://www.bizlatinhub.com/foreign -investment -guatemala -2021. 
WT/COMTD/SE/W/45  
 
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  Chart 87: FDI flows to selected Central American SVEs by source  
(Million dollars)  
 
Note:  Central America  covers the Dominican Republic, Panama, Guatemala, Honduras, Nicaragua, El 
Salvador  and Costa Rica.  
Source:  Consejo Monetario Centroamerica.  
4.123.   The investments from Panama into other economies in the region is noteworthy  both 
for its magnitude as well as its evolution during the pandemic. W hile FDI from other regions declined, 
flows from Panama into other countries increased by 33 % in 2020 reaching $684.2 million in 2020 
compared to $511.6 million in 2019. Panamanian investments increased even more in 2021 helping SVEs 
in the region to offse t the reduction in investment from other parts of the world. The fact that Panamanian 
investment in the region did not decline considerably potentially suggests the relative resiliency of these 
investments and highlights the gains that countries in the reg ion could have by establishing stronger ties 
with Panama.  
Table 5: Total FDI from Panama into other SVEs , 2019 -2021  
(Million dollars)  
 2019  2020  2021  
Dominican Republic  12.1 83.8 97.5 
El Salvador  270.2  306.4  342.7  
Guatemala  23.8 172.0  188.8  
Honduras  89.4 56.0 163.0  
Nicaragua  116.1  65.9 80.3 
Total 511.6  684.2  872.22  
Source:  Consejo Monetario Centroamericano . 
4.124.   Despite significant downward pressures, flows to SVEs in Central American 
remained resilient in the first two quarters of 2022 continuing the trend seen in 2021.  The 
Chart  below  shows investment  into the 6 SVEs between 2019 and the second quarter of 2022. Except 
for El Salvador, which experienced a disinvestment of USD -143 million in the first quarter, and 
Panama where investments are still subdued, other SVEs have received steady investments and are 
on track to receive the same levels of FDI as in 2019.  
WT/COMTD/SE/W/45  
 
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  Chart 88: FDI in selected SVEs, 2019  - January -June  2022  
(Million dollars)  
 
* Only the first quarter of 2022 . 
Source:  Consejo Monetario Centroamericano.  
4.125.   The pandemic led to a significant drop also in greenfield investments in SVEs, both 
in number and in value.  Between 2010 and 2019, t he average annual number was 221. In 2020, 
it dropped to 133 , the lowest in over a decade. In 2021, t he number of greenfield investments 
increased to 141, which was still quite low compared to pre -COVID average.   
4.126.   Most SVEs generally receive a very small number of greenfield investments  annually 
and some do not register even a single investment in some of the years. Receiving a steady 
stream of foreign investments is a major challenge especially for the smaller and remote 
island countries.  In the four years prior to the pandemic, 14 SVEs received less than 10 greenfield 
investments in total. Countries that consistently receive the greatest share of greenfield investments 
are Sri Lanka, Panama, El Salvador , Ecuador, and Dominican Republic.  
4.127.   The total value of greenfield investments in SVEs was USD 21.2 billion on average in the 
three years prior to the pandemic. In 2020, their value fell to USD 7.5 billion. While the total number 
of investments rose in 2021 , their total value dropped even further to USD 4.5 billion USD. Low 
levels of greenfield investment, an indicator of FDI trend in the future, signals weak investor 
sentiment and hints towards a slow recovery in this component of foreign investment.  
4.128.   Slugg ish recovery is concerning as foreign investment is crucial in bridging the gap between 
national savings and investment needs and attaining higher economic growth in most SVEs. The low 
number of greenfield investments in both 2020 and 2021 is an indication  that the recovery in FDI 
will likely be very gradual especially considering the uncertain geopolitical environment, unstable 
global economy and squeeze in global funding as a result of high interest rates in major economies. 
Attracting foreign investments  under these circumstances remains a major challenge for SVEs.  
5  CHALLENGES AND OPPORTUNITIES IN THE POST -COVID -19 RECOVERY PHASE  
5.1.  SVEs are a diverse group of countries, located in different regions of the world with 
different resource endowments.  Some are ve ry rich in natural resources while others rely on 
international tourism as their predominant source of revenue. Some SVEs produce agricultural 
products, fuels and minerals, while others export manufactures, including clothing and textiles.  
5.2.  Despite this va riety, SVEs have much in common.  Most have small domestic markets, 
limited resource bases, are highly dependent on trade, and are vulnerable to natural disasters.  They 
also have high transport and communication costs due to their distance from internation al markets. 
These features have important ramifications for the economic structure and trade performance of 
SVEs, creating unique challenges and opportunities, particularly following the COVID -19 pandemic.  
WT/COMTD/SE/W/45  
 
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  5.3.  The COVID -19 pandemic represented a real shock to  the global economy, which made 
it more inflationary than earlier economic crises.  Pandemic -related restrictions disrupted 
production and transport of commodities and manufactures around the world, leading to shipping 
backlogs and shortages that contribute d to rising prices. Meanwhile, the outbreak of war in Ukraine 
reduced global supplies of food and energy, further boosting inflationary pressures, including in 
SVEs.  
5.4.  High commodity prices in the aftermath of the pandemic have benefitted SVEs that 
are net e xporters of natural resources while net importers were hurt.   However, gains to 
net exporters may be unsustainable over the medium -to-long term. Surging commodity prices may 
contribute to decreased participation of SVEs in global supply chains as countries  may look to secure 
their energy and food supplies and reshore production. This further puts both integration of SVEs in 
global trade and sustainability of SVE growth from higher export revenues at risk.  
5.5.  While the promotion of extractive industry is crucia l to many SVEs, they need to ensure that 
these resources are not over -exploited. Furthermore, the small size of many SVEs means that there 
is competition for resources among different sectors and the overdevelopment of any one sector 
could come at the cost  of another. Thus, it is important that SVEs ensure that resources are 
well distributed among the various industries and attracting investment to boost 
economic development does not cause long -term harm to the environment.   
5.6.  The pandemic and the conflict in  Ukraine have exposed the fragility of the global food 
system, which has been particularly strongly felt in SVEs given their reliance on imported 
food.  McKinsey estimates that the grain harvest in Ukraine in 2022 -23 will be 30 million tons less 
than norma l due to less acreage planted and reduced availability of inputs such as fertilizers.51 
Restrictions on food exports in other countries could also endanger food security in SVEs by reducing 
supplies available for purchase. Climate change could further exacerbate these vulnerabilities as it 
will increase the frequency of acute weather events such as drought, heatwaves, floods, etc.  
5.7.  The real factors that have contributed to recent spikes in inflation are exogenous to 
SVEs , therefore the use of monetary policy, while necessary, might not be sufficient to counteract 
price pressures. Higher infla tion can alter the expectations of households and firms triggering 
increasing wage demands, which could cause a wage -price spiral that would see inflation becoming 
more entrenched. As a result, monitoring labour market developments is important to understa nd 
inflationary dynamics in SVEs.  
5.8.  Calibrating the right mix of policy to boost post -pandemic recovery against the 
backdrop of high inflation, limited fiscal space, and a difficult geopolitical context 
represents a challenge to policymakers in SVEs.  The ris ing cost of living demands policies to 
protect the most vulnerable, as low -income households spend a large fraction of their income on 
essential goods such as food and fuels. This would be best addressed by targeted and temporary 
support to those most affe cted.  
5.9.  Digitalization , which was accelerated by the COVID -19 pandemic, helps countries grow and 
integrate in the global economy by facilitating the supply of goods and services and potentially 
lowering prices. Digitalization  can also increase efficiency th rough Big Data analysis on the supply 
side, which allows firms to produce goods and services more adapted to consumers' needs. 
Therefore, in addition to helping economies weather external shocks like COVID -19, 
digitalization  is crucial for maintaining inte rnational competitiveness .  
5.10.  SVEs lag in exports of digitally delivered services. Intermediate services, or services serving 
as inputs to other economic activities as part of the production process of both goods and services, 
are largely delivered digitally  at the international level. Stunted growth in SVEs' digitally 
delivered services exports poses challenges for the integration of SVEs into regional and 
global value chains.  
5.11.  Developing economies including SVEs risk being left behind economically if they ar e unable 
to keep up with the rest of the world in terms of digitalization. In the pre -pandemic era, low labour 
 
51 https://www.mckinsey.com/industries/agriculture/our -insights/a -reflect ion-on-global -food-security -
challenges -amid-the-war-in-ukraine -Impact of war in Ukraine on global food supply (McKinsey)and -the-early-
impact -of-climate -change  WT/COMTD/SE/W/45  
 
- 86 - 
 
  costs allowed SVEs to participate in GVCs, which facilitated technology transfers. Upgrading the 
labour force through investments in human capita l could strengthen the position of SVEs 
within GVCs. However, the advancements of technology could decrease the need for cheap labour 
causing countries to "reshore" production away from SVEs.52 This is especially true in the post -COVID 
era where digitaliza tion accelerated in advanced economies.  
5.12.  Losing out on technological transfers and development through both weak 
integration within GVCs and low investment flows could prove to be damaging for small 
economies.  The role of SVEs in global trade is already min ute, with their share in world merchandise 
and services exports being 0.7 1% and 0.9%, respectively, in 20 21. The increasing gap in digital 
advancement between SVEs and the rest of the world could further erode the competitiveness of 
SVEs, reducing their pa rticipation in trade further, leading to even less digital investment.   
5.13.  As digitalization  continues to advance globally, SVEs need to take steps to ensure 
inclusive digital development within their own countries.  In 2017, men in SVEs were 2.1 
times as likely as women to use a mobile phone to make online purchases. By 2021 they were only 
1.6 times as likely to do so. Despite this improvement, the male -to-female ratio in online purchases 
in SVEs remains considerably higher than the global average of 1:1, highlighting the continued 
inaccessibility of digital technologies for women and other disadv antaged groups.  
5.14.  SVEs could fast track the adoption of frontier technologies, both on the business 
and consumer side, with the goal of making digital access as inclusive as possible.  SVEs 
could diversify their production processes by mastering existing tech nologies and strengthening 
innovation systems.53 Prioritising and investing in digital development could help SVEs reduce their 
technological gaps, encouraging increased trade and investment.  
5.15.  Despite strong positive economic spillovers, digitalization  brings with it new risks 
and challenges related to expanded global linkages and disruption of existing economic 
structures.  These include cyber -attacks, data breaches, and transition costs for both businesses 
and workers.  While moving to a more digital econom y, it is imperative that SVEs implement policies 
to manage these disruptions and ensure that the economic benefits of digitalization are widely 
shared. Enhanced regional cooperation can also minimize economic fallout from the digital 
transition.54 
5.16.  Many of the structural constraints that SVEs face in expanding the production of 
goods and attracting FDI in manufacturing are reduced when it comes to trade in services 
such as tourism, business process outsourcing (BPO), telecommunications, etc.  The rise of 
global supply chains, coupled with opportunities offered by broadband connectivity, has unleashed 
the potential of the ICT industry that was valued at USD 195.2 b illion globally in 2019.55 By investing 
in reliable ICT infrastructure and upgrading the labour fo rce, SVEs could present themselves as 
attractive locations for offshoring. SVEs in the Caribbean , for example,  are perfectly situated to 
attract investment in ICT due to their cultural and geographic proximity to North America as well as 
their young, cost -effective workforce.  
5.17.  An important trend emerging in the outsourcing industry is the move toward 
automation and higher value -added services.  Outsourcing providers and their clients are 
demanding more sophisticated services that require higher levels of tec hnical skill than in the past. 
As a result, the role of service providers is evolving beyond simply executing repetitive tasks. SVEs 
need to invest in education training to make their citizens more capable of performing such tasks to 
take full advantage of  these opportunities. Such investments are also likely to make SVEs more 
attractive destination for foreign investments.  
5.18.  Many SVEs are highly dependent on tourism, both for job creation and to earn 
foreign currency to finance imports.  Smaller island nations suffered greatly from the collapse in 
tourism and associated leisure activities following the COVID -19 pandemic. The easing of travel 
 
52 Digitalization: Curse or Blessing for Developing Economies? - BTI Blog (bti -project.org)  
53 A few developing countries overperform on frontier technologies, but most lag behind – UN Report | 
UNCTAD  
54 Leveraging Digital Technologies Key to Asia’s COVID -19 Recove ry — ADB | Asian Development Bank  
55 The valuation of the industry is based on estimates by Grand View research. 
https://www.fdiintelligence.com/conten t/feature/caribbean -builds -up-bpo-credentials -74563  WT/COMTD/SE/W/45  
 
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  restrictions and the global vaccination drive led to a substantial but incomplete revival of touri st 
arrivals in 2022. As tourism continues to recover, it might be prudent for SVEs to diversify their 
tourism sector  by targeting new types of customers interested in niche activities such as 
eco-tourism, wildlife tourism, etc. and widen their source marke ts. The recent re -opening of 
Chinese borders can be an opportunity.  
5.19.  The COVID -19 pandemic fundamentally changed the way people work, with remote working 
becoming increasingly common. The number of "digital nomads" has increased significantly with the 
rise of the "work from anywhere" movement. These workers are looking to take advantage of flexible 
work arrangements in destinations that provide necessary infrastructure combined with pleasant 
living conditions. If this trend continues, countries including SVE s could move away from attracting 
companies towards attracting talent.56 By improving their digital infrastructure and simplifying 
administrative procedures, SVEs can make  the most of this opportunity by attracting visitors to s tay 
longer. As a side benefi t, doing so could also reduce seasonality of tourism revenue.  
 
56 Tourism intelligence report  2022 – fDi Intelligence . WT/COMTD/SE/W/45  
 
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  ANNEX: SMALL ECONOMIES ECONOMIC AND TRADE PROFILE  
Appendix Table 1: Merchandise exports of small and vulnerable economies, 
2010  and 2021  
(Billion dollars and percentage)  
  Value  Share in world  Share in SVEs  Annual percentage change  
  2010  2021  2010  2021  2010  2021  2020  2021  2010 -
21 
World  15301  22328  100.0%  100.0%  - - -7.2%  26.5%  3.5%  
SVEs  107 158 0.70%  0.71%  100.0%  100.0%  -10.7%  29.6%  3.6%  
Antigua and 
Barbuda  0.05 0.02 0.00%  0.00%  0.04%  0.01%  -41.1%  -13.8%  -7.6%  
Bahamas  0.70 0.56 0.00%  0.00%  0.65%  0.36%  -43.4%  43.6%  -2.0%  
Barbados  0.43 0.35 0.00%  0.00%  0.40%  0.22%  -22.3%  1.4%  -1.8%  
Belize  0.48 0.42 0.00%  0.00%  0.45%  0.27%  -32.1%  46.8%  -1.1%  
Bolivia, 
Plurinational 
State of  6.40 11.03  0.04%  0.05%  5.96%  6.98%  -19.9%  57.2%  5.1%  
Cabo Verde  0.04 0.05 0.00%  0.00%  0.04%  0.03%  -14.6%  2.5%  1.8%  
Cuba 4.91 1.50 0.03%  0.01%  4.57%  0.95%  -17.4%  -12.0%  -
10.2%  
Dominica  0.04 0.02 0.00%  0.00%  0.03%  0.01%  -23.3%  20.6%  -6.7%  
Dominican 
Republic  6.75 12.46  0.04%  0.06%  6.29%  7.88%  -8.0%  21.0%  5.7%  
Ecuador  17.49  26.70  0.11%  0.12%  16.28%  16.89%  -8.8%  31.2%  3.9%  
El Salvador  4.50 6.63 0.03%  0.03%  4.19%  4.19%  -14.8%  31.8%  3.6%  
Fiji 0.84 0.82 0.01%  0.00%  0.78%  0.52%  -20.0%  -1.3%  -0.3%  
Grenada  0.02 0.03 0.00%  0.00%  0.02%  0.02%  -28.7%  32.3%  1.5%  
Guatemala  8.46 13.75  0.06%  0.06%  7.88%  8.70%  3.1%  19.4%  4.5%  
Guyana  0.88 4.36 0.01%  0.02%  0.82%  2.76%  65.3%  68.2%  15.7%  
Honduras  6.26 10.22  0.04%  0.05%  5.83%  6.46%  -12.6%  33.0%  4.5%  
Jamaica  1.33 1.44 0.01%  0.01%  1.24%  0.91%  -26.2%  18.2%  0.7%  
Maldives  0.20 0.29 0.00%  0.00%  0.18%  0.18%  -20.8%  -0.1%  3.4%  
Mauritania  2.07 4.34 0.01%  0.02%  1.93%  2.75%  24.8%  53.5%  7.0%  
Mauritius  2.26 1.96 0.01%  0.01%  2.11%  1.24%  -19.5%  9.8%  -1.3%  
Mongolia  2.90 9.25 0.02%  0.04%  2.70%  5.85%  -0.6%  22.1%  11.1%  
Nicaragua  3.25 6.50 0.02%  0.03%  3.03%  4.11%  -3.5%  27.7%  6.5%  
Panama  10.99  13.16  0.07%  0.06%  10.23%  8.32%  -16.2%  38.8%  1.7%  
Papua New 
Guinea  5.74 10.43  0.04%  0.05%  5.35%  6.60%  -18.5%  12.3%  5.6%  
Saint Kitts and 
Nevis  0.03 0.05 0.00%  0.00%  0.03%  0.03%  -9.6%  -5.0%  4.0%  
Saint Lucia  0.21 0.06 0.00%  0.00%  0.20%  0.04%  -32.7%  7.0%  -
11.1%  
Saint Vincent 
and the 
Grenadines  0.04 0.03 0.00%  0.00%  0.04%  0.02%  39.8%  -37.8%  -1.7%  
Samoa  0.07 0.03 0.00%  0.00%  0.07%  0.02%  -24.4%  -22.6%  -7.8%  
Seychelles  0.40 0.46 0.00%  0.00%  0.37%  0.29%  -16.7%  7.5%  1.3%  
Sri Lanka  8.60 12.50  0.06%  0.06%  8.01%  7.91%  -15.9%  24.4%  3.5%  
Tonga  0.01 0.02 0.00%  0.00%  0.01%  0.01%  -23.8%  5.9%  6.4%  WT/COMTD/SE/W/45  
 
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    Value  Share in world  Share in SVEs  Annual percentage change  
  2010  2021  2010  2021  2010  2021  2020  2021  2010 -
21 
Trinidad and 
Tobago  10.98  8.62 0.07%  0.04%  10.22%  5.45%  -23.3%  56.2%  -2.2%  
Vanuatu  0.05 0.05 0.00%  0.00%  0.05%  0.03%  -17.3%  16.7%  0.9%  
- Not applicable.  
Source:  Secretariat estimates for SVEs based on WTO-UNCTAD.  
  WT/COMTD/SE/W/45  
 
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  Appendix Table 2: Merchandise imports of small and vulnerable economies , 
2010  and 2021  
(Billion dollars and percentage)  
  Value  Share in world  Share in SVEs  Annual percentage change  
  2010  2021  2010  2021  2010  2021  2020  2021  2010 -
21 
World  15440  22587  100.0%  100.0%  - - -7.5%  26.3%  3.5%  
SVEs  158 226 1.02%  1.00%  100.0%  100.0%  -20.3%  36.9%  3.3%  
Antigua and Barbuda  0.73 0.60 0.00%  0.00%  0.32%  0.26%  -28.9%  19.6%  1.6%  
Bahamas  2.51 3.20 0.02%  0.01%  1.64%  1.41%  -32.7%  58.2%  1.9%  
Barbados  21.62  1.67 0.01%  0.01%  0.99%  0.74%  -5.3%  11.7%  0.6%  
Belize  0.49 1.06 0.00%  0.00%  0.45%  0.47%  -20.2%  34.7%  3.8%  
Bolivia, Plurinational 
State of  20.94  9.56 0.04%  0.04%  3.53%  4.22%  -27.6%  35.0%  5.0%  
Cabo Verde  0.01 0.80 0.00%  0.00%  0.47%  0.35%  -9.5%  11.2%  0.7%  
Cuba 0.02 8.49 0.07%  0.04%  7.27%  3.75%  -27.0%  17.4%  -2.7%  
Dominica  54.88  0.23 0.00%  0.00%  0.14%  0.10%  -33.2%  8.4%  0.3%  
Dominican Republic  0.10 24.14  0.10%  0.11%  9.79%  10.66%  -15.6%  41.1%  4.1%  
Ecuador  0.35 25.69  0.13%  0.11%  13.02%  11.35%  -20.6%  43.4%  2.0%  
El Salvador  14.07  15.08  0.05%  0.07%  5.32%  6.66%  -11.7%  47.1%  5.4%  
Fiji 33.61  2.12 0.01%  0.01%  1.14%  0.93%  -36.7%  22.3%  1.4%  
Grenada  0.35 0.45 0.00%  0.00%  0.20%  0.20%  -17.2%  14.5%  3.2%  
Guatemala  0.29 26.61  0.09%  0.12%  8.75%  11.75%  -8.4%  46.2%  6.1%  
Guyana  2.32 4.38 0.01%  0.02%  0.88%  1.93%  -44.3%  94.5%  10.9%  
Honduras  0.65 15.04  0.06%  0.07%  5.63%  6.64%  -15.7%  46.9%  4.9%  
Jamaica  7.02 5.98 0.03%  0.03%  3.30%  2.64%  -26.5%  27.2%  1.2%  
Maldives  0.00 2.57 0.01%  0.01%  0.69%  1.14%  -36.4%  40.1%  8.1%  
Mauritania  6.15 3.56 0.01%  0.02%  1.22%  1.57%  -22.0%  29.9%  5.7%  
Mauritius  4.26 5.14 0.03%  0.02%  2.77%  2.27%  -24.6%  21.8%  1.5%  
Mongolia  209.88  6.85 0.02%  0.03%  2.07%  3.02%  -13.5%  29.2%  6.9%  
Nicaragua  6.61 9.83 0.03%  0.04%  3.03%  4.34%  -6.3%  50.1%  6.7%  
Panama  4.37 20.60  0.11%  0.09%  10.58%  9.10%  -31.4%  39.7%  1.9%  
Papua New Guinea  0.16 3.02 0.02%  0.01%  2.23%  1.34%  -16.4%  -8.1%  -1.4%  
Saint Kitts and Nevis  0.05 0.26 0.00%  0.00%  0.17%  0.11%  -19.7%  -4.3%  -0.3%  
Saint Lucia  17.22  0.60 0.00%  0.00%  0.42%  0.27%  -15.7%  19.2%  -0.9%  
Saint Vincent and the 
Grenadines  3.38 0.37 0.00%  0.00%  0.21%  0.16%  -4.2%  16.1%  0.9%  
Samoa  0.02 0.37 0.00%  0.00%  0.20%  0.16%  -20.2%  18.2%  1.6%  
Seychelles  0.13 1.13 0.01%  0.01%  0.62%  0.50%  -14.0%  12.9%  1.3%  
Sri Lanka  2.62 20.64  0.09%  0.09%  8.54%  9.12%  -19.5%  28.5%  3.9%  
Tonga  73.49  0.28 0.00%  0.00%  0.10%  0.12%  -3.8%  20.6%  5.2%  
Trinidad and Tobago  2590.22  5.76 0.04%  0.03%  4.10%  2.55%  -23.1%  18.2%  -1.1%  
Vanuatu  31.01  0.34 0.00%  0.00%  0.18%  0.15%  -15.7%  12.9%  1.6%  
- Not applicable.  
Source:  Secretariat estimates for SVEs based on WTO-UNCTAD.  
  WT/COMTD/SE/W/45  
 
- 91 - 
 
  Appendix Table 3: Top 10 SVE merchandise trade exporters and importers  
by product group, 2021  
(Billion dollars and percentage)  
Agricultural products  
Rank  Exporters  Value  Share 
in 
worlda Share in 
SVEs  2019 -
21b Rank  Importers  Value  Share 
in 
worlda Share in 
SVEs  2019 -
21b 
1 Ecuador  14.1 0.65 33.2 19 1 Guatemala  4.6 0.21 13.1 34 
2 Guatemala  6.7 0.31 15.9 17 2 Dominican 
Republic  4.4 0.20 12.5 24 
3 Sri Lanka  3.5 0.16 8.3 14 3 Ecuador  3.4 0.16 9.7 33 
4 Honduras  3.1 0.15 7.4 40 4 Sri Lanka  3.2 0.14 9.0 20 
5 Nicaragua  3.0 0.14 7.1 23 5 El Salvador  3.0 0.13 8.4 23 
6 Dominican 
Republic  2.8 0.13 6.5 6 6 Honduras  2.4 0.11 7.0 35 
7 Bolivia, 
Plurinational 
State of  2.2 0.10 5.2 69 7 Panama  2.2 0.10 6.4 -5 
8 El Salvador  1.3 0.06 3.1 13 8 Nicaragua  1.5 0.07 4.3 37 
9 Panama  0.9 0.04 2.1 -9 9 Jamaica  1.3 0.06 3.7 7 
10 Mauritania  0.8 0.04 2.0 -26 10 Mauritius  1.2 0.05 3.4 -6 
Manufactures  
Rank  Exporters  Value  Share 
in 
worlda Share in 
SVEs  2019 -
21b Rank  Importers  Value  Share 
in 
worlda Share in 
SVEs  2019 -
21b 
1 Panama  10.5 0.07 18.9 12 1 Guatemala  17.6 0.11 12.8 37 
2 Sri Lanka  8.5 0.06 15.3 3 2 Ecuador  16.7 0.11 12.1 11 
3 Dominican 
Republic  6.7 0.05 12.1 6 3 Dominican 
Republic  15.1 0.10 11.0 20 
4 Guatemala  6.4 0.04 11.6 34 4 Panama  14.1 0.09 10.2 -15 
5 Trinidad and 
Tobago  5.7 0.04 10.3 55 5 Sri Lanka  13.4 0.09 9.7 2 
6 Honduras  5.6 0.04 10.1 15 6 El Salvador  9.9 0.06 7.2 35 
7 El Salvador  5.0 0.03 9.0 12 7 Honduras  9.7 0.06 7.0 23 
8 Nicaragua  2.5 0.02 4.5 10 8 Nicaragua  6.5 0.04 4.7 33 
9 Ecuador  1.6 0.01 2.9 30 9 Bolivia, 
Plurinational 
State of  6.4 0.04 4.6 -12 
10 Mauritius  1.0 0.01 1.8 -11 10 Mongolia  4.5 0.03 3.3 10 
Fuels and mining products  
Rank  Exporters  Value  Share 
in 
worlda Share in 
SVEs  2019 -
21b Rank  Importers  Value  Share 
in 
worlda Share in 
SVEs  2019 -
21b 
1 Ecuador  10.4 0.28 29.7 15 1 Ecuador  5.3 0.14 14.9 14 
2 Mongolia  7.6 0.21 21.8 18 2 Dominican 
Republic  4.6 0.12 13.1 11 
3 Bolivia, 
Plurinational 
State of  5.7 0.16 16.4 7 3 Guatemala  4.4 0.11 12.3 24 
4 Guyana  3.0 0.08 8.7 1974 4 Sri Lanka  3.6 0.09 10.0 -4 
5 Trinidad and 
Tobago  2.4 0.07 6.9 -20 5 Bolivia, 
Plurinational 
State of  2.3 0.06 6.6 40 
6 Mauritania  2.1 0.06 5.9 88 6 El Salvador  2.2 0.06 6.1 19 
7 Jamaica  0.8 0.02 2.4 -26 7 Nicaragua  1.8 0.05 5.1 83 
8 Panama  0.7 0.02 1.9 825 8 Honduras  1.7 0.04 4.8 3 
9 Guatemala  0.6 0.02 1.6 -7 9 Panama  1.5 0.04 4.3 -38 
10 Dominican 
Republic  0.4 0.01 1.1 -45 10 Mongolia  1.4 0.04 3.8 -2 
a Excluding re -exports of Hong Kong, China.  
b 2019-21: statistics on  % change refer to the difference between 2019 and 2021 in  % terms rather 
than the average annual  % change.  
Source:  WTO estimates.  
  WT/COMTD/SE/W/45  
 
- 92 - 
 
  Appendix Table 4: Changes in Export Prices of Primary Commodities, 2010 -2022  
(Annual percentage change, in USD terms)  
  2010 -
2019  2019  2020  2021  Q1 2022  Q2 2022  Q3 2022  
Energy  -2.7 -12.4 -32.7 81.0 82.4 87.9 66.6 
Food and 
beverages  -2.0 -3.9 5.1 24.2 20.6 21.4 8.5 
Beverages  -3.0 -3.7 5.6 16.3 30.9 23.5 12.3 
Food -1.5 -3.8 7.1 30.8 24.7 26.6 12.2 
Oil & Meals  -2.8 -8.9 15.9 41.6 27.0 27.2 5.1 
Grains  -1.3 0.2 7.2 29.9 18.8 27.6 19.2 
Other Food  -0.3 -1.4 -2.3 18.5 27.3 24.6 15.5 
Raw Materials  -2.7 -4.2 -0.6 9.0 2.1 1.8 -6.8 
Timber  -1.7 -3.0 1.0 4.6 -4.2 -11.4 -15.9 
Other Raw 
Materials  -3.9 -5.6 -2.7 15.0 10.1 18.7 5.5 
Fertilizers  -2.3 -1.4 -10.1 80.5 119.2  113.3  66.7 
Metals and 
Minerals  -2.7 -5.0 1.0 47.1 24.5 3.0 -16.3 
Base Metals 
(ex. iron ore)  -2.2 -9.9 -1.8 46.8 34.5 12.3 -11.8 
Precious Metals  0.6 8.5 26.6 5.0 1.7 -0.4 -6.5 
Source:  World Bank Commodity Price Index Database.  
  WT/COMTD/SE/W/45  
 
- 93 - 
 
  Appendix Table 5: Commercial services exports of small and vulnerable economies, 
2010‑2021  
(Billion dollars and percentage)  
  Value  Share in world  Share in SVEs  Annual percentage change  
  2010  2021  2010  2021  2010  2021  2020  2021  2010 -
21 
World  3908  5994  100.0%  100.0
% - - -
17.8%  17.4%  4.0%  
SVEs  50 58 1.28%  0.97%  100.0%  100.0
% -
47.3%  31.6%  1.4%  
Antigua and Barbuda  0.47 0.71 0.01%  0.01%  0.93%  1.22%  -51.5%  28.2%  3.9%  
Bahamas  2.46 2.95 0.06%  0.05%  4.92%  5.07%  -72.3%  141.6%  1.7%  
Barbados  1.29 1.04 0.03%  0.02%  2.59%  1.78%  -49.2%  38.3%  -2.0%  
Belize  0.33 0.57 0.01%  0.01%  0.65%  0.98%  -40.1%  50.4%  5.2%  
Bolivia, Plurinational 
State of  0.69 0.40 0.02%  0.01%  1.38%  0.68%  -70.4%  -5.7%  -4.9%  
Cabo Verde  0.49 0.25 0.01%  0.00%  0.98%  0.43%  -63.4%  -4.9%  -6.0%  
Cuba 10.55  8.13 0.27%  0.14%  21.13%  13.97%  -31.8%  16.4%  -2.3%  
Dominica  0.13 0.08 0.00%  0.00%  0.26%  0.14%  -59.5%  9.0%  -4.0%  
Dominican Republic  5.10 7.73 0.13%  0.13%  10.22%  13.28%  -52.5%  80.9%  3.9%  
Ecuador  1.38 2.00 0.04%  0.03%  2.76%  3.44%  -47.2%  18.4%  3.5%  
El Salvador  1.47 2.98 0.04%  0.05%  2.94%  5.12%  -36.0%  45.3%  6.7%  
Fiji 0.92 0.17 0.02%  0.00%  1.85%  0.29%  -77.4%  -50.2%  -
14.3%  
Grenada  0.15 0.34 0.00%  0.01%  0.30%  0.59%  -36.1%  -12.0%  7.8%  
Guatemala  2.30 2.82 0.06%  0.05%  4.61%  4.85%  -31.1%  13.8%  1.9%  
Guyana  0.25 0.22 0.01%  0.00%  0.50%  0.37%  -10.5%  7.3%  -1.2%  
Honduras  2.08 2.50 0.05%  0.04%  4.16%  4.29%  -34.6%  30.7%  1.7%  
Jamaica  2.60 2.96 0.07%  0.05%  5.21%  5.08%  -52.1%  43.4%  1.2%  
Maldives  1.80 3.66 0.05%  0.06%  3.61%  6.28%  -54.9%  140.5%  6.6%  
Mauritania  0.10 0.11 0.00%  0.00%  0.21%  0.19%  -9.8%  0.0%  0.6%  
Mauritius  2.66 1.23 0.07%  0.02%  5.32%  2.12%  -57.2%  -5.1%  -6.7%  
Mongolia  0.48 0.72 0.01%  0.01%  0.97%  1.23%  -47.0%  9.9%  3.6%  
Nicaragua  0.73 0.98 0.02%  0.02%  1.47%  1.68%  -30.1%  10.6%  2.7%  
Panama  6.35 10.68  0.16%  0.18%  12.72%  18.35%  -38.6%  25.4%  4.8%  
Papua New Guinea  0.28 0.10 0.01%  0.00%  0.56%  0.17%  -68.1%  -3.7%  -9.0%  
Saint Kitts and Nevis  0.13 0.18 0.00%  0.00%  0.26%  0.30%  -37.8%  -30.9%  2.8%  
Saint Lucia 0.37 0.82 0.01%  0.01%  0.74%  1.41%  -65.6%  115.0%  7.6%  
Saint Vincent and the 
Grenadines  0.14 0.09 0.00%  0.00%  0.27%  0.15%  -54.1%  -33.4%  -4.1%  
Samoa  0.18 0.07 0.00%  0.00%  0.36%  0.12%  -72.7%  -12.1%  -8.4%  
Seychelles  0.44 0.88 0.01%  0.01%  0.88%  1.51%  -40.2%  32.3%  6.5%  
Sri Lanka  2.45 2.46 0.06%  0.04%  4.91%  4.22%  -59.6%  -18.4%  0.0%  
Tonga  0.03 0.04 0.00%  0.00%  0.06%  0.07%  -16.5%  -49.3%  2.8%  
Trinidad and Tobago  0.87 0.33 0.02%  0.01%  1.74%  0.56%  -46.4%  -22.0%  -8.5%  
Vanuatu  0.27 0.03 0.01%  0.00%  0.54%  0.05%  -70.9%  -68.2%  -
17.9%  
- Not applicable.  
Source:  WTO-UNCTAD estimates.  WT/COMTD/SE/W/45  
 
- 94 - 
 
  Appendix Table 6: Commercial services imports of small and vulnerable economies, 
2010‑2021  
(Billion dollars and percentage)  
  Value  Share in world  Share in SVEs  Annual percentage change  
  2010  2021  2010  2021  2010  2021  2020  2021  2010 -
21 
World  3768  5539  100.0%  100.0
% 0.00%  0.00%  -
18.8%  15.0%  3.6%  
SVEs  34 48 0.89%  0.87%  100.0%  100.0
% -
30.7%  26.6%  3.3%  
Antigua and Barbuda  0.21 0.34 0.01%  0.01%  0.64%  0.70%  -45.5%  11.9%  4.2%  
Bahamas  1.10 1.54 0.03%  0.03%  3.27%  3.20%  -29.1%  31.5%  3.1%  
Barbados  0.65 0.46 0.02%  0.01%  1.93%  0.96%  -51.7%  70.8%  -3.1%  
Belize  0.15 0.28 0.00%  0.01%  0.46%  0.58%  -29.2%  79.1%  5.5%  
Bolivia, Plurinational 
State of  1.13 1.97 0.03%  0.04%  3.34%  4.11%  -39.6%  15.2%  5.2%  
Cabo Verde  0.30 0.21 0.01%  0.00%  0.88%  0.44%  -39.9%  1.8%  -3.2%  
Cuba 1.92 2.01 0.05%  0.04%  5.71%  4.18%  -24.2%  30.6%  0.4%  
Dominica  0.07 0.10 0.00%  0.00%  0.19%  0.21%  -31.8%  8.2%  3.8%  
Dominican Republic  2.46 4.27 0.07%  0.08%  7.29%  8.90%  -25.2%  39.8%  5.2%  
Ecuador  2.94 4.47 0.08%  0.08%  8.73%  9.31%  -33.2%  65.0%  3.9%  
El Salvador  1.05 2.12 0.03%  0.04%  3.13%  4.41%  -27.0%  46.1%  6.5%  
Fiji 0.44 0.50 0.01%  0.01%  1.32%  1.04%  -37.7%  3.1%  1.1%  
Grenada  0.09 0.24 0.00%  0.00%  0.26%  0.50%  -22.2%  1.3%  9.5%  
Guatemala  2.40 4.13 0.06%  0.07%  7.13%  8.60%  -22.1%  49.3%  5.1%  
Guyana  0.34 2.90 0.01%  0.05%  1.02%  6.05%  27.5%  61.4%  21.4%  
Honduras  1.14 2.54 0.03%  0.05%  3.39%  5.29%  -25.1%  42.0%  7.5%  
Jamaica  1.77 2.47 0.05%  0.04%  5.24%  5.14%  -35.8%  49.6%  3.1%  
Maldives  0.45 1.10 0.01%  0.02%  1.32%  2.28%  -45.2%  50.6%  8.5%  
Mauritania  0.64 0.71 0.02%  0.01%  1.89%  1.49%  -2.0%  -1.7%  1.0%  
Mauritius  1.95 1.43 0.05%  0.03%  5.79%  2.98%  -36.9%  9.4%  -2.8%  
Mongolia  0.77 2.03 0.02%  0.04%  2.28%  4.22%  -34.9%  -2.7%  9.2%  
Nicaragua  0.69 0.84 0.02%  0.02%  2.06%  1.76%  -26.7%  42.3%  1.8%  
Panama  2.71 4.20 0.07%  0.08%  8.04%  8.75%  -42.4%  39.5%  4.1%  
Papua New Guinea  2.74 0.93 0.07%  0.02%  8.13%  1.95%  -15.4%  -32.2%  -9.3%  
Saint Kitts and Nevis  0.11 0.16 0.00%  0.00%  0.32%  0.34%  -44.1%  15.1%  3.9%  
Saint Lucia  0.20 0.32 0.01%  0.01%  0.59%  0.66%  -48.2%  38.6%  4.3%  
Saint Vincent and the 
Grenadines  0.09 0.09 0.00%  0.00%  0.25%  0.18%  -30.8%  -3.1%  0.0%  
Samoa  0.11 0.09 0.00%  0.00%  0.31%  0.19%  -12.1%  3.6%  -1.5%  
Seychelles  0.26 0.45 0.01%  0.01%  0.77%  0.94%  -29.0%  -6.4%  5.1%  
Sri Lanka  4.29 2.90 0.11%  0.05%  12.72%  6.03%  -42.7%  -22.8%  -3.5%  
Tonga  0.04 0.06 0.00%  0.00%  0.13%  0.13%  -4.6%  -31.4%  3.5%  
Trinidad and Tobago  0.37 2.04 0.01%  0.04%  1.10%  4.25%  -9.1%  19.1%  16.8%  
Vanuatu  0.12 0.12 0.00%  0.00%  0.37%  0.25%  -17.1%  1.3%  -0.3%  
- Not applicable.  
Source:  WTO-UNCTAD estimates.  
 
  WT/COMTD/SE/W/45  
 
- 95 - 
 
  Appendix Table 7: Top 10 SVE commercial services trade  
Exporters and importers by sector , 2021  
(Billion dollars and percentage)  
Transport Services  
Rank  Exporters  Value  Share 
in 
world  Share in 
SVEs  2019 -
21a  Rank  Importers  Value  Share 
in 
world  Share in 
SVEs  2019 -
21a  
1 Panama  6.5 0.56 56.8 -8 1 Guatemala  2.3 0.17 10.8 46 
2 Ecuador  0.6 0.05 5.5 2 2 Panama  2.2 0.16 10.5 15 
3 Sri Lanka  0.6 0.05 5.3 -74 3 Dominican 
Republic  2.2 0.16 10.4 29 
4 Dominican 
Republic  0.6 0.05 5.0 -14 4 Sri Lanka  2.1 0.15 10.0 -40 
5 Guatemala  0.5 0.04 4.4 4 5 Ecuador  2.0 0.15 9.6 25 
6 Mongolia  0.5 0.04 4.2 24 6 Honduras  1.5 0.11 7.2 28 
7 El Salvador  0.4 0.04 3.9 -16 7 Cuba 1.1 0.08 5.3 14 
8 Jamaica  0.4 0.03 3.2 58 8 Jamaica  1.1 0.08 5.2 18 
9 Bolivia, 
Plurinational 
State of  0.2 0.02 1.7 -57 9 El Salvador  1.0 0.07 4.6 35 
10 Maldives  0.1 0.01 1.2 -9 10 Bolivia, 
Plurinational 
State of  0.8 0.06 3.9 8 
Travel  
Rank  Exporters  Value  Share 
in 
world  Share in 
SVEs  2019 -
21a  Rank  Importers  Value  Share 
in 
world  Share in 
SVEs  2019 -
21a  
1 Dominican 
Republic  5.7 0.93 23.2 -24 1 Ecuador  1.2 0.20 19.7 2 
2 Maldives  3.5 0.57 14.2 10 2 Dominican 
Republic  0.7 0.11 11.1 11 
3 Bahamas  2.7 0.44 11.1 -34 3 Panama  0.7 0.11 11.0 -51 
4 Panama  2.3 0.37 9.4 -49 4 Mongolia  0.6 0.09 8.8 -40 
5 Cuba 1.5 0.24 6.1 -43 5 Guatemala  0.5 0.08 7.6 -41 
6 Jamaica  1.5 0.24 6.0 -59 6 Honduras  0.3 0.05 4.6 -42 
7 Ecuador  1.1 0.17 4.3 -54 7 Cuba 0.3 0.05 4.5 -8 
8 El Salvador  1.0 0.16 4.1 -24 8 El Salvador  0.3 0.05 4.5 -41 
9 Barbados  0.8 0.14 3.4 -34 9 Bolivia, 
Plurinational 
State of  0.3 0.04 4.0 -73 
10 Saint Lucia  0.8 0.13 3.2 -27 10 Sri Lanka  0.2 0.04 3.8 -85 
Other Commercial Services  
Rank  Exporters  Value  Share 
in 
world  Share in 
SVEs  2019 -
21a  Rank  Importers  Value  Share 
in 
world  Share in 
SVEs  2019 -
21a  
1 Cuba 6.6 0.17 35.7 -13 1 Guyana  2.4 0.07 12.3 162 
2 Panama  1.9 0.05 10.2 -17 2 Dominican 
Republic  1.4 0.04 6.9 -21 
3 Guatemala  1.4 0.04 7.7 14 3 Trinidad and 
Tobago  1.4 0.04 6.9 16 
4 Dominican 
Republic  1.4 0.04 7.7 77 4 Guatemala  1.4 0.04 6.8 17 
5 Sri Lanka  1.3 0.03 7.2 -11 5 Panama  1.3 0.04 6.4 -31 
6 Jamaica  1.1 0.03 6.1 138 6 Jamaica  1.2 0.04 6.1 -10 
7 Mauritius  0.8 0.02 4.2 -8 7 Ecuador  1.2 0.04 6.0 -1 
8 El Salvador  0.6 0.01 3.2 17 8 Bahamas  1.1 0.03 5.3 22 
9 Seychelles  0.4 0.01 2.4 23 9 Mongolia  1.0 0.03 5.0 -23 
10 Honduras  0.3 0.01 1.9 -21 10 Mauritius  0.8 0.02 3.9 -3 
a 2019-21: statistics on  % change refer to the difference between 2019 and 2021 in  % terms rather 
than the average annua l % change.  
Source:  WTO estimates.  
  WT/COMTD/SE/W/45  
 
- 96 - 
 
  Appendix Table 8: Inflation  
(Year -on-year percentage change)  
 2016  2017  2018  2019  2020  2021  Oct-
20222 
SVEs1 1.8 3.1 2.5 2.0 1.3 7.2 8.1 
Antigua and Barbuda  -1.1 2.4 1.7 0.7 2.8 1.2 7.7 
Bahamas, The  1 1.6 2.0 1.4 1.2 5.5 6.5 
Barbados  3.8 6.6 0.6 7.2 1.3 5 8.2 
Belize  1.1 1 -0.1 0.2 0.4 4.9 6.7 
Bolivia, Plurinational 
State of  4 2.7 1.5 1.5 0.7 0.9 2.9 
Cabo Verde  -0.3 0.3 1 1.9 -0.9 5.4 8.2 
Cuba 4.5 5.5 6.9 5.6 4.2 77.3 39.73  
Dominica  0.7 -1.5 4 0.1 -0.7 3.82 1.8 
Dominican Republic  1.7 4.2 1.2 3.7 5.6 8.5 8.2 
Ecuador  1.1 -0.2 0.3 -0.1 -0.9 1.9 4.0 
El Salvador  -0.9 2 0.4 0 -0.1 6.1 7.5 
Fiji 3.9 2.8 4.8 -0.9 -2.8 3 5.4 
Grenada  0.9 0.5 1.4 0.1 -0.8 1.9 0.9 
Guatemala  4.2 5.7 2.3 3.4 4.8 3.1 9.7 
Guyana  1.5 1.5 1.6 2.1 0.9 5.7 6.5 
Honduras  3.3 4.7 4.2 4.1 4 5.3 10.2 
Jamaica  1.7 5.2 2.4 6.2 5.2 7.3 9.9 
Maldives  1.8 2.2 0.5 1.7 -2 0.2 2.9 
Mauritania  2.8 1.2 3.2 2.7 1.8 5.7 12.7 
Mauritius  2.3 4.3 1.8 0.9 2.7 6.8 11.9 
Mongolia  1.3 6.3 8.2 5.2 2.3 13.5 14.5 
Nicaragua  3.1 5.7 3.9 6.1 2.9 7.2 12.2 
Panama  1.5 0.5 0.2 -0.1 -1.6 2.6 1.7 
Papua New Guinea  6.6 4.7 4.8 2.7 5.1 5.7 5.5 
St. Kitts and Nevis  0 0.8 -0.7 -0.8 -1.2 1.9 0.3 
St. Lucia  -2.8 2 2.2 -0.7 -0.4 4.1 1.6 
St. Vincent and the 
Grenadines  1 3 1.4 0.5 -1 3.4 7.5 
Samoa  2.3 1 5.8 -0.1 -3.3 4.1 12.4 
Seychelles  -0.2 3.5 3.4 1.7 3.8 7.9 2.9 
Sri Lanka  4.5 7.1 2.8 4.8 4.2 14.1 70.6 
Tonga  0.2 9.8 6.7 -0.1 -1.4 6.9 12.9 
Trinidad and Tobago  3.1 1.3 1 0.4 0.8 3.5 8.6 
Vanuatu  2.1 3.3 1.9 3.5 6.6 3.2 2.7 
1 Average inflation in consumer prices. Due to lack of data for October 2022, not all countries are 
included in the calculation.  
2 For Dominica, Grenada, Saint Kitts and Nevis, Saint Lucia, and Vanuatu (March 2022), 
Papua  New Guinea (June 2022) and the Bahamas (September 2022), the last available data is 
reported.  
Source:  IMF and national sources.  
 
  WT/COMTD/SE/W/45  
 
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  Appendix Table 9: FDI inflows to SVE S, 201 6-2021  
(Million dollars)  
 2016  2017  2018  2019  2020  2021  
World  2045423.6  1632638.5  1448276.2  1480626.0  963138.5  1582309.8  
SVEs  13583.8  20780.1  22732.9  20916.8  13308.8  19115.8  
Antigua and Barbuda  97.4 151.3  204.8  127.8  73.5 104.3  
Bahamas, The  1259.5  901.4  947.4  611.0  896.8  359.6  
Barbados  269.3  206.2  241.6  215.4  262.1  238.7  
Belize  44.0 24.5 118.3  93.9 76.2 127.8  
Bolivia, Plurinational 
State of  335.4  712.5  302.4  -216.6  -1129.5  594.1  
Cabo Verde  126.0  111.1  112.3  103.2  73.7 117.5  
Dominica  42.3 22.7 78.3 63.0 22.0 44.0 
Dominican Republic  2406.7  3570.7  2535.3  3021.0  2559.6  3102.1  
Ecuador  764.1  629.5  1388.7  974.5  1104.2  620.6  
El Salvador  347.4  889.1  826.0  636.2  279.9  314.2  
Fiji 389.8  386.2  471.0  321.0  240.5  401.0  
Grenada  109.9  155.7  184.0  199.0  148.8  144.2  
Guatemala  1174.4  1130.0  980.7  976.1  931.8  3471.7  
Guyana  58.0 212.2  1231.1  1695.3  1833.9  1161.7  
Honduras  1139.4  1175.8  961.3  498.1  418.6  700.2  
Jamaica  928.0  888.8  774.6  665.4  265.1  320.5  
Maldives  456.6  457.8  575.7  956.2  348.3  443.5  
Mauritania  271.2  587.2  772.9  886.9  927.9  22.2 
Mauritius  378.8  480.0  460.5  444.1  224.7  253.2  
Mongolia  -4156.4  1494.3  2173.7  2443.3  1719.1  2139.7  
Nicaragua  989.1  1035.4  837.6  503.0  746.5  1220.1  
Panama  4745.4  4281.8  5019.4  4062.9  606.7  1843.8  
Papua New Guinea  -39.8 -180.2  305.7  335.2  111.8  86.8 
St. Kitts and Nevis  121.4  48.0 40.1 47.9 13.9 40.0 
St. Lucia  161.6  89.9 45.5 72.9 35.1 46.7 
St. Vincent and the 
Grenadines  80.2 163.3  41.6 74.4 30.9 65.3 
Samoa  2.5 9.1 16.7 -2.2 4.3 8.8 
Seychelles  155.2  191.9  119.5  143.7  122.3  156.9  
Sri Lanka  897.0  1372.7  1614.0  743.5  434.1  597.5  
Tonga  8.8 13.8 15.0 1.7 4.2 1.7 
Trinidad and Tobago  -23.6 -470.9  -700.2  184.0  -102.8  341.6  
Vanuatu  43.9 38.2 37.5 35.1 24.6 25.7 
Note:  World estimates excludes the offshore financial centres in the Caribbean.  
Source:  UNCTAD.  
  WT/COMTD/SE/W/45  
 
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  Appendix Table 10: FDI Stocks by SVE economy, 201 6-2021  
(Million dollars)  
 2016  2017  2018  2019  2020  2021  
World  28430126  33099585  32842774  36529518  41727577  45448812  
SVEs  275917  297083  311175  330749  342704  364462  
Antigua and Barbuda  929.8  1040.7  1234.7  1360.1  1410.2  1515.8  
Bahamas, The  22715.9  23617.4  24564.8  25175.7  26072.5  26351.8  
Barbados  7179.7  7385.9  7627.5  7842.8  8104.9  8343.7  
Belize  2094.6  2119.1  2237.4  2331.3  2407.5  2535.3  
Bolivia  11564.5  12241.5  11835.2  11710.3  10350.7  10733.6  
Cabo Verde  6710.2  8171.8  2118.4  2172.6  2464.1  2452.8  
Dominica  319.7  343.0  401.0  460.1  482.0  526.0  
Dominican Republic  32952.9  36501.5  39105.5  42126.7  44680.9  47791.9  
Ecuador  16670.5  17300.0  18688.7  19663.2  20767.4  21388.0  
El Salvador  9046.7  9384.1  9665.6  9980.8  10158.8  10378.3  
Fiji 4080.4  4625.1  4889.2  5206.2  5730.3  5908.5  
Grenada  953.1  1108.7  1324.7  1535.9  1696.6  1840.9  
Guatemala  13850.5  15098.8  15587.3  16669.9  17570.5  21423.4  
Guyana  2973.0  3185.2  4416.2  6111.5  7945.4  9107.1  
Honduras  13843.8  15019.6  15981.4  16479.4  16898.0  17598.2  
Jamaica  15086.7  15839.0  16566.7  17232.1  17497.2  17814.2  
Maldives  3214.5  3672.3  4247.9  5204.1  5552.4  5995.9  
Mauritania  6749.6  7336.8  8109.7  8995.0  9972.7  9994.9  
Mauritius  4616.5  5221.6  5489.8  5780.4  5630.4  5355.4  
Mongolia  16277.5  18019.9  20223.0  22555.7  24206.7  26346.4  
Nicaragua  7934.6  8620.2  9056.4  9239.5  9986.0  11206.1  
Panama  44009.9  48291.7  53311.2  57374.0  57980.8  59824.6  
Papua New Guinea  4462.0  4414.7  4565.5  4843.4  3800.0  3886.8  
St. Kitts and Nevis  1461.1  1496.6  1578.4  1602.5  1596.3  1636.3  
St. Lucia  1395.8  1483.3  1524.0  1597.0  1638.4  1685.1  
St. Vincent and the 
Grenadines  1035.9  1198.3  1239.8  1315.8  1346.6  1411.9  
Samoa  292.9  310.3  313.7  311.1  327.8  326.8  
Seychelles  3162.8  3193.0  3220.5  3244.3  3285.1  3335.1  
Sri Lanka  9844.6  10754.9  12575.2  13065.4  13655.1  17890.5  
Tonga  423.7  437.5  452.5  465.1  469.3  471.1  
Trinidad and Tobago  9545.2  9082.9  8452.4  8455.3  8352.5  8694.1  
Vanuatu  518.4  568.5  570.0  641.5  666.1  691.8  
Note:  World estimates excludes the offshore financial centres in the Caribbean.  
Source:  UNCTAD.  
 
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