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INSULARITY, REMOTENESS, MOUNTAINS AND ARCHIPELAGOS: A COMBINATION OF CHALLENGES FACING SMALL STATES? Paper for Europe at the Margins: EU Regional Policy, Peripherality and Rurality Regional Studies Association Conference

2 The European Union (EU) has in recent years developed special policies designed to assist in the economic development of a number of 'Outermost Regions' (ORs) or 'Ultraperipheral Regions', namely the Canary Islands, Guadeloupe, French Guyana, Martinique, Réunion, the Azores and Madeira. With the advent of the enlargement of the EU to incorporate a further ten central and eastern European countries in May 2004, it is likely that significant reductions in Structural Funds budgets for disadvantaged regions of western Europe will occur once the current budget periods ends in 2006. Since the ORs have been major beneficiaries from EU Structural Funds, their financial assistance from the EU is under imminent threat. It is likely that from 2007 onwards only those disadvantaged regions within western Europe which can make a convincing special case will be likely to retain the coveted Objective 1 status from the Structural Funds. The European Commission has recently undertaken research on the economic challenges facing island regions (together with their adjacent littoral mainland seaboard regions) and it is possible that some of these may become one of the special status categories for the post-2007 Structural Funds. The ORs are all, with the exception of French Guyana, island regions. To date, however, the justification for their special policy status within the EU has been justified in terms of remoteness rather than insularity, as the names 'outermost regions' and 'ultraperipheral' suggest. As part of the ongoing debate within the EU, it has been suggested that the ORs are actually confronted with a set of no fewer than four interlocking challenges – insularity, remoteness, being archipelagos (in many cases) and being highly mountainous entities. Interestingly, this same argument can be applied to many of the world's very small states as well as to the EU's outermost regions. This paper examines the nature of the challenges posed by these four key characteristics and seeks to produce some empirical evidence of how difficult to overcome these challenges have been. The focus of the paper is on 126 very small states, dependent territories and highly autonomous regions drawn from all parts of the global economy. The position of the EU's seven OR's within the results for the wider set of small states is considered.