ANSD : Financing development based on human dignity

THU 21 - 11 - 2024

Date: Nov 8, 2018
Source: The Daily Star

Financing development based on human dignity

Najib Saab

Over the past 10 years, the Arab Forum for Environment and Development (AFED) reports have identified the state of Arab environment in all its aspects and proposed solutions that have contributed to endorsing numerous environmental policies in the region.

The adoption of sustainable development goals and the ratification of the Paris Climate Agreement in 2015 marked a turning point in international development action. For the first time, a time frame was set for achieving 17 goals that combine economic, social and environmental dimensions into an integrated package. The Paris Agreement laid out a road map to face climate change, most notably by transitioning to a carbon-free economy by 2050.

Achieving the development goals and engaging in international efforts to protect the environment and face the impact of climate change first require appropriate policies and plans. However, implementation ultimately calls for appropriate funding sources. This is what the new AFED report on “Financing Sustainable Development in Arab Countries” tries to address.

AFED has always called in its reports and recommendations for a development model rooted in a green economy, based on balance among economic development, social justice and environmental sustainability. Meeting these three objectives provides a sound basis for addressing the shortcomings of Arab economies, from alleviating poverty and unemployment, to achieving food, water and energy security, leading to a fairer distribution of income. In addition, green economy focuses on the equitable use and distribution of natural assets to diversify the economy, which provides immunity from the global fluctuations and upheavals.

Tensions caused by current Arab development models can be understood by examining some indicators. 100 million people in Arab countries are predominantly poor. Economic insecurity is compounded by a worrying rise in unemployment rates amounting to over 15 percent of the population, and reaching 30 percent among young people. Under their current structure, Arab economies will not be able to create the 50 million new jobs expected to be required by 2020.

What are the most important environmental challenges in the Arab world, and how can the necessary programs be funded?

Water is facing a severe crisis in most Arab countries, often driven by bad management and policies that encourage overconsumption and allow for excessive exploitation of a scarce resource. Currently, over 45 million Arabs lack access to clean water and safe sanitation, accounting for about 10 percent of the population.

Food security poses another major threat, mainly driven by the neglect and underdevelopment of the agricultural sector, leading to poor productivity, low irrigation efficiency and degradation of productive land. The Arab food gap has reached about $40 billion a year, with the situation worsening due to the effects of climate change, wars and conflicts.

Some 60 million people in Arab countries lack modern energy services, limiting the chances to improve their living standards. Several Arab economies are among the least efficient and most polluting around the world in the energy sector.

Transportation policies in Arab countries have focused on creating more roads rather than mass public transport systems, as well as urban planning that combines housing, work, education and recreation, reducing the need for travelling long distances. The absence of effective policies in the transportation sector led to congestive traffic jams in urban centers, poor air quality in many cities and land degradation.

The transition to a green economy requires a review and redesign of government policies to stimulate shifts in production, consumption and investment patterns. The shift to sustainable agricultural practices is expected to yield savings in Arab countries of around 5 percent to 6 percent of the GDP, or about $100 billion annually, as a result of increased water productivity, improved public health and better protection of resources. Arab countries should focus on policies that monitor and regulate access to water, enhance irrigation efficiency and prevent pollution. The percentage of treated wastewater should be increased from 60 percent currently to 90-100 percent, and the percentage of treated wastewater re-use should be increased from 20 percent now to 100 percent. New desalination technologies of seawater must be developed locally, especially using solar energy.

In the energy sector, sustainable investments in efficiency and renewable energy sources are needed through a combination of regulatory measures and economic incentives. If the annual per capita consumption of electricity in Arab countries falls to the global average through energy efficiency measures, this will generate electricity savings estimated at $73 billion annually. If energy price subsidies are cut by 25 percent, this will free up more than $100 billion over a three year period, an amount that could be diverted to finance the transition to clean energy.

Achieving these results requires huge investments. Fulfilling the environmental content of the sustainable development goals in Arab countries requires $230 billion annually. AFED report on financing sustainable development has found that the funding gap in Arab countries with deficit is $100 billion annually. Where from can the funding come? Not all requirements come from fresh money. Much of it comes from putting an end to corruption, and diverting part of the traditional financial commitments in current budgets into projects that support sustainable development goals. However, this is not enough, as there remains a need for new large sums.

Governments alone cannot secure the trillions needed to finance sustainable development. It is therefore necessary to attract contributions from Arab and international development funds and the private sector.

This requires policies and regulatory measures based on transparency and legislative stability, capable of creating the right grounds for attracting investments. Encouraging the banking sector to finance sustainable development projects, which may carry higher risks and require longer repayment of their debt, requires incentives from governments, central banks and international institutions involved in finance and development. This can be done through risk sharing and offering facilities to commercial banks, especially in the areas of financing projects in the water, food and renewable energy sectors.

Creating an environment conducive to investment and providing confidence in national development plans and mechanisms, under the banner of law, justice and political stability, are two necessary conditions to achieve the sustainable development goals as set forth in the 2030 Agenda.

Ultimately, for development to be sustainable, it has to invest in people and foster integration of human rights, including the principles of genuine public participation, accountability and transparency, into the development agenda. The best financed development plans, in countries that do not respect human dignity, are no more than facelifts which perpetuate a state of backwardness.

_{Najib Saab is secretary-general of the Arab Forum for Environment and Development. He is editor of the report on Financing Sustainable Development, which will be released at AFED’s 11th annual conference in Beirut on Nov. 8 (www.afedonline.org).

A version of this article appeared in the print edition of The Daily Star on November 07, 2018, on page 6.}

The views and opinions of authors expressed herein do not necessarily state or reflect those of the Arab Network for the Study of Democracy

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