Economic Research Forum (ERF)

The Sustainable Development Goals as a framework for policy in MENA

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ERF’s annual conference has become the premier regional event for economists of the Middle East and North Africa (MENA). This column previews the 2020 conference, which was due to take place in Luxor, Egypt, in March but has been postponed until later in the year. The central focus will be on the Sustainable Development Goals (SDGs) as a framework for MENA’s development policy.

In a nutshell

The Sustainable Development Goals constitute ‘a universal call to action to end poverty, protect the planet and ensure that all people enjoy peace and prosperity.’

Achieving the SDGs requires new integrated and coherent development models where all targets are tackled simultaneously, taking account of each country’s context and institutional arrangements.

Particular challenges for achievement of the SDGs in the MENA region include inequality, informality, increasing population, low levels of growth and governance failure.

This year’s ERF annual conference will be focused on the Sustainable Development Goals (SDGs) as a framework for development policy in the Middle East and North Africa (MENA).

Conference theme

Global trends are defined as large-scale and long-lasting transformative patterns of change that have a significant impact on the planet and its inhabitants. These trends include, but are not limited to, demographic change, climate change, political instability, urbanisation, global protectionism and digitalisation. Thus, linking economic, social and environmental policies is essential for facing such challenges in general and particularly in the MENA region.

This link has been made concrete through the conception and implementation of Sustainable Development Goals (SDGs), which are ‘a universal call to action to end poverty, protect the planet and ensure that all people enjoy peace and prosperity.’

Between 1990 and 2015, the MENA region succeeded in reducing hunger and poverty (the share of people living on less than $3.20 fell from 27% to 16%) and increasing school enrolment (primary school enrolment reached 104.3% in 2017), as well as improvements in indicators of infant mortality, and child and maternal malnutrition.

But in a context of climate change and conflicts, the region faces different challenges in the achievement of the SDGs. Inequality, informality, increasing population, low levels of growth and governance failure all hinder the region’s development.

The SDGs are interlinked and highly correlated. High quality and adequate data are needed to follow progress on the indicators and to achieve a better understanding of the relationship between the different indicators to provide policy-makers with evidence-based research. For example, the region suffers from high spatial, wealth and gender inequality in addition to increasing inequality of opportunity in health and education.

Achieving SDG 5 (gender equality) and SDG 10 (reducing inequality) in the region are necessary conditions to reduce poverty (SDG 1), end hunger (SDG 2), ensure healthy lives (SDG 3) and promote inclusive and equitable education (SDG 4). For example, ensuring equal opportunities for men and women in accessing the labour market could yield a GDP increase of 34% in Egypt and an increase of income per capita by 50% in Morocco.

From a policy perspective, in the current geopolitical and economic context, the region needs new inclusive growth model where no one is left behind. This requires better investment in human capital, new regulations for the labour market and creation of decent jobs, engaging in structural transformation, widening the fiscal space for new social protection policies and implementing institutional reforms to achieve better governance.

Finally, achieving the SDGs requires:

  • First, a partnership of governments, private sector, civil society and citizens to build inclusive and sound strategies in a participatory fashion.
  • Second, a strong data ecosystem is crucial to the success of the SDGs in order to review countries’ performance and determine priority areas for action.
  • Third, the implementation of SDGs will also require mobilising trillions of financial flows to meet the investment needs of these goals.

Against this background, the key challenges to MENA will be addressed during the ERF conference plenaries, featuring keynote presentations and panel discussions by leading international scholars, senior officials from planning ministries, UN and other development institutions as well as senior ERF economists and other social scientists.

 Towards an SDGs-based development framework

As highlighted by UN Secretary-General António Guterres, ‘It is abundantly clear that a much deeper, faster and more ambitious response is needed to unleash the social and economic transformation needed to achieve our 2030 goals.’

To achieve the goals, it is important to have appropriate tools to monitor, evaluate and benchmark the measures implemented by each country. This is why the Stakeholder Forum for a Sustainable Future and partners developed a tool that provides an accountability instrument for stakeholders to use in assessing progress made in designing the SDGs, and with which to hold policy-makers to account for the final outcome. Moreover, at the national level, each country has developed its own strategy for achieving the SDGs.

The first ERF conference plenary will examine two interrelated questions associated to the development framework of SDGs. First, it will analyse the main challenges faced by governments in conceiving and implementing national strategies. Second, it will investigate how, concretely, the SDGs, while being a general framework, can be tailored to each country’s needs.

Climate change, environmental degradation and sustainable development

The socio-economic costs of climate change are more significant in the Global South and lower-income countries. According to the World Bank, climate impacts could push an additional 100 million people into poverty by 2030 if current conditions do not change. And by 2050, around 143 million people across three developing regions could become climate migrants.

The MENA region is one of the regions to be affected by climate change, as it is the most water scarce region in the world, suffering from poverty and increasing population. A FEMISE report predicts ‘a loss of 0.4 to 1.3% of GDP in MENA countries due to climate change effects, which could even rise to 14% if no mitigation and adaptation measures are undertaken’.

The negative impacts of climate change include a decrease in agricultural production, threatening the food security of the region, rural-urban migration putting more pressure on urbanisation and a hit to the tourism sector. In addition to these economic losses, climate impacts may include social and political consequences, as water crisis and shortage of precipitation might reduce the incomes of people in the agricultural sector and drive people to violence.

The second ERF conference plenary will re-examine some of these impacts. It will discuss different socio-economic aspects of climate change in the MENA region and extract policy lessons from experience of other countries. Key questions include:

  • What is the effect of drought on housing prices, residential land prices and housing rents?
  • How large are the effects of climate change on economic activity?
  • What is the impact of episodic heat waves and dry spells on productivity?

 Closing the SDGs gap: views from policy-makers

Policy-makers face several challenges in closing the SDG gap. As the SDG targets are interlinked, policy-makers need to understand these interdependences and how the goals influence each other. Policy-makers cannot continue following the same development model where isolated policies are implemented without considering the trade-off between economic, social and environmental policy objectives.

Achieving the SDGs requires new integrated and coherent development models where all targets are tackled simultaneously and the interdependence between the SDGs is considered, taking account of each country’s context and institutional arrangements.

In addition, policy-makers, especially in low-income countries, face investment and financial challenges. To close the SDGs financial gap, policy-makers need to mobilise more national and international financial resources and to coordinate budgets, policies and planning among the different sectors. This ERF plenary will discuss these challenges and what are the economic, social and environmental transformations needed to leave no one behind. 

Harnessing the evidence revolution to achieve the SDGS

An evidence revolution has taken place over the last 30 years, at the heart of which has been the rise of rigorous impact evaluations. The global evidence gathered so far points to some common factors that make social protection policies work. It also suggests that the impact of interventions such as food subsidies or cash transfer programmes can vary widely depending on the country context. Recommendations going forward are to achieve better institutionalisation of the use of evidence and to share lessons from evaluations as global public goods.

Enhancing government efforts to digitise the Egyptian economy

The world is in the middle of a dynamic digital revolution. This is associated with several opportunities and threats for developing economies and emerging markets, thus, supporting or threatening their economic growth and sustainable development objectives depending on how they adjust, respond and use the new technology. Information and communications technology (ICT) is at the heart of this change and is receiving a lot of attention from the Egyptian government in a serious attempt to shift to a digital economy.

In this context, the Egyptian Center for Economic Studies is supporting government efforts in its digitisation journey by exploring all relevant aspects through a number of events and research papers. Against this background, two research papers are presented in this session. The first examines the governance of the ICT sector with a special focus on information processing and security. The second analyses the readiness of physical infrastructure (soft and hard) in Egypt.

Dealing with MENA’s looming macroeconomic crises

MENA countries have undertaken two categories of reforms in recent years to restore macroeconomic imbalances. On the one hand, most of the reforms implemented were of a stabilisation nature, such as fiscal, exchange rate and monetary policies. On the other hand, other reforms were aimed at improving the structural characteristics of the economy in the countries where they were undertaken.

Yet despite several internal reforms and structural adjustment programmes, development goals have not been achieved. This ERF session will examine how macroeconomic policy-making can be improved in the MENA region so as to contribute to the 2030 SDG agenda, namely more inclusive, gender-sensitive and environment friendly policies. It will also shed light on the significant constraints of macroeconomic policy-making.

Positioning MENA financial systems to foster inclusive regional development

Over the years, the main focus of research in finance has been on market behaviour, comparative efficiency and regulatory policies. In the meantime, finance has experienced significant changes whether in terms of idiosyncratic methods and technology or in terms of its perceived distributive impact in its various dimensions (for example, gender, income, wealth, regional, environmental). At the same time, Islamic finance has expanded tremendously and provided alternative approaches for responding to the concerns of large segments of population.

This panel, in the context of the SDGs, has three objectives:

  • First, it will highlight the role of finance in contributing to equitable broad-based development in the context of the region. In other words, it will focus on the role of the financial system in supporting a vibrant inclusive economy that does not sacrifice financial stability.
  • Second, it will examine how Islamic finance can provide alternative approaches to address prevailing issues of inclusion and sustainability, notably in resource mobilisation and expansion of access to financial services in the region.
  • Third, it will cover the dramatic upheaval that ‘fintech’ is causing in global financial services. It will highlight its current and expected contributions in terms of transforming the financial industry, its efficiency and stability and inclusiveness.

 

 

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