Abstract

Small Island Developing States (SIDS) are subjected to many challenges of economic vulnerability and climate risks due to their small size, geographical isolation, and dependence on a small range of exports. This narrative review explores strategies that incorporate export diversification and climate resilience to cater to these vulnerabilities while also ensuring sustainable development pathways. By evaluating successful diversification models, such as those in Mauritius and Singapore, and determining the role of trade agreements, technology, and institutional capacity, the study provides implementable insights for SIDS. Moreover, the paper demonstrates the necessity of incorporating climate resilience into sectors like tourism, fisheries, and agriculture, showing the potential of renewable energy and climate-smart practices. Even though opportunities for economic growth through diversification exist, barriers such as inadequate infrastructure, skill shortages, and high transportation costs remain significant. The paper also explores financial innovations, including debt-for-climate swaps, and the potential of regional cooperation to overcome scale constraints. Despite barriers like inadequate infrastructure and skill shortages, a unified, adaptive strategy can help SIDS achieve sustainable economic growth and climate adaptation. This review offers a policy framework for building resilient, diversified economies in the face of global challenges.

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