Economic, Social and Environmental Pillars of Sustainable Development: Integrating the Economic, Social and Environmental Pillars of Sustainable Development: Perspectives from the ESCWA region Roula Majdalani Director, Sustainable Development and Productivity Division UN-ESCWA

The ‘Arab Spring’ Uprisings across the region demand Freedom, Dignity and Social Justice for Inclusive and Sustainable Development Integration of the Economic, Social and Environmental Pillars of Sustainable Development needs Governance to provide a solid foundation The events of the Arab Uprisings have added a political dimension to existing socio-economic and environmental problems. Arabs are longing for a transition to more democratic governance system and inclusive development paradigm. They seek their voices to be heard, they seek respect and social justice. Many have predicted various scenarios, trying to anticipate the outlook and the New Middle East, but the reality is that the Arab region never ceases to amaze and thus the outcome of uprisings are hard to envisage. One thing is certain: Arab people are ready for change and are no longer accepting old political structures and heavy regimes that disrupt SD. Hence, this new Arab Era will not only have as a challenge integration of economic, social and environmental pillars, but also integration of political dimensions that are crucial for establishments of the bases, such as: strong institutional settings, legislative, parliamentary, constitutional and administrative foundation with credible judiciary systems and fair legal provisions.

ESCWA Countries regularly outperform Global Growth Rates (real GDP growth, annual percentage change) The Arab Spring has shown in no unequivocal terms how vulnerable the traditional Development Paradigm pursued in the region was. Just to give you an idea, the following have become now some of the stylized facts on the performance of the region in the past decade: The region was one of the fastest growing regions in the world over the past decade; as a matter of fact, it grew above the world average during the same period (as shown in the figure).   Countries like Tunisia and Egypt were being hailed as nascent economic tigers in the region. Egypt in particular was ranked among the top reformers for four consecutive years in the ‘doing business report’ of the WB for improving its business climate and managed to increase FDI from a mere 500 Million USD in 2004 to 13 Billion USD in 2008 ……Clearly these countries were doing well economically. On the social side, in particular with respect to social security and protection policies that serve as effective social (and economic) stabilizers, helping to alleviate the negative consequences of adjustments, the estimated effective coverage pension schemes in a country like Egypt was 58% of the total working population reaching up to 80% in Tunisia and Libya. …..Again social spending was relatively high. …… So what went wrong with the Model then?

Unemployment Remains a Challenge in the Current Development Paradigm Perhaps the most pressing social challenge is unemployment, particularly youth unemployment (19.97% of the region’s population is between 15 and 24 year old) which remains constant at higher-than-world-average unemployment rates (of 10-12% and 20-30%, respectively). Employment ratios in the region have remained at lower-than-average levels. (MENA6 represents the average of the 6 countries plotted on the graph.)

Persisting Challenges & Regional Priorities Water Security – Water scarcity and water stress characteristic of nearly all Arab countries Food Security – reorientation of policy framework from food self-sufficiency to food security Energy Security – implications for energy importing and exporting countries Environmental Security due to Climate Change and Extreme Weather Events – exacerbating other threats to regional security & increasing uncertainty Governance and Weak Institutions – implications for participatory, inclusive and accountable governance Financing for development – skewed financial resource availability between countries, sectors and stakeholders. On the environmental side, the region is widely known for its scarcity of water and limited fertile resources. With widely differing climatic regimes ranging from humid to hyper-arid, and considerable variation in temperature, there is a high vulnerability to draught in the region. ESCWA region lives below the critical water scarcity level of 500 m3 Agricultural sector strongly affected especially in Sudan, Egypt and Syria with significant contribution of agriculture to GDP. Uncontrolled urbanization processes characterized by poor housing conditions, inefficient public transportation and congested/polluted cities.

Need to Reinforce & Integrate the Three Pillars of Sustainable Development & its Foundation Alternative diagram

Integrated Sustainable Development Planning and Programming at ESCWA

ESCWA Strategic Framework (2012–2015) aims to address the 3 pillars of Sustainable Development + Governance as a continuum Youth and Employment Gender & ESCWA Center for Women Inclusive and sustainable growth Social justice, Equity and good governance Regional Integration Knowledge and Innovation Resilience and response to crisis and conflict Agriculture Industry SMEs Democracy and Development Shared Water Resources Statistics At ESCWA, our approach aims at embracing the three pillars of sustainable development & governance in a continuum, rather than in isolation or as trade-offs between the different pillar. In this context, ESCWA has undertaken a challenge of rethinking its strategic objectives for the coming years (for its Work Programme through 2012-2015). We have identified 5 key priority areas for our work that we believe are critical in addressing SD challenges in its intierty (4 pillars). These priorities are: Trade Transport Energy ESCWA Technology Center Financing for Development

ESCWA’s Role in Promoting Integrated Sustainable Development ESCWA as UN Regional Commission promotes an integrated approach to sustainable development through its various roles and functions Convening Role Multi-Sector Platform Knowledge Broker Inter-Governmental Forum Regional Coordination Role Civil Society/ Stakeholder Platform Those priorities, we believe, can be advanced in the region given the unique advantages that ESCWA ESCWA, as the regional arm of the UN, has. ESCWA can assume a number of roles: Convening role which makes it possible to bring key policy makers together for policy dialogue. e.g. regional process in the prep for Rio+20 and the development of the legal framework for management of shared water resources in the Arab region. "Think tank" role to facilitate analysis based on solid statistics, knowledge sharing, networking and peer learning within the region. e.g. Modeling exercises that link the different pillars together to provide alternative scenarios and policy options for policy-makers in the region. Advocacy role. The convening power and analytical capability underpin the ability to build consensus and to have a strong advocacy role in key policy areas. Regional coordination. The need to strengthen sub regional and regional coordination is important but often still too weak. Regional Consultation Mechanism (RCM). The role of knowledge broker where we build partnerships between governments, think tanks and policy research institutions. e.g. Technology Center. Inter-Agency Coordination Advocacy Role Think Tank Role Regional Advisory Services

Example: Macro-Economic Modeling The ESCWA Regional Macro-Econometric Model aims to: Simulate impacts of budgetary and monetary policies. Introduce Shock Indicators to project the effects of shocks on the economy and basic development parameters. Model considers the following parameters: Financial flows, balance of payments (intra-regional/inter-regional) Trade flows (goods and services) Labor and unemployment (population, gender) Energy sector Water constraints Agricultural production, etc. Model considers two sub-regional groupings: Oil Exporters (the GCCs along with Algeria and Libya) & Oil Importers. Model excludes Comoros, Djibouti, Iraq, Somalia; Iraq will be modeled separately. Outputs will support ESCWA’s: Arab World 2025 Report Arab Integration Report Climate Change Vulnerability Assessment & other in-house assessments

Regional Initiative on Climate Change Regional Initiative for the Assessment of the Impact of Climate Change on Water Resources and Socio-Economic Vulnerability in the Arab Region Objectives Assesses the impact of climate change on water resources in the Arab Region through a science-based consultative and integrated approach (regional climate modeling) Identifies socio-economic & environmental vulnerabilities caused by climate change impacts (trade, employment, migration, health, etc.) Provides a common & informed regional platform to address climate change impacts on the Arab region & support regional dialogue, priority setting and policy formulation on climate change adaptation and the formulation of negotiation positions at the regional level. Inter-Agency initiative led by ESCWA involving LAS, UNEP, UNISDR, UNESCO, UNU, WMO & Arab Governments, SMHI & LAS Organizations

Regional Initiative Components Baseline Review and Knowledge Management Integrated Assessment Climate Change Impact Assessment Socio-Economic Vulnerability Assessment Capacity Building & Institutional Strengthening Water Ministries, Meteorological Organizations, Arab Research Centers Awareness Raising and Information Dissemination Water Ministries, Meteorological Organizations, Arab Research Centers

Trade, Transport & Sustainable Development Integrated Transport System in the Arab Mashreq (ITSAM) Agreement on International Roads Agreement on International Railways Inter-linked, cross-sectoral activities on: Trade facilitation National Trade Facilitation Committees National Trade and Environment Committees Movement of people and goods Sustainable Transport Food Security, Food Self-Sufficiency & Food Imports Financing for Development

Inter-Governmental Coordination on Regional SD Priorities ESCWA Committees Ministerial Councils Water Resources Energy Transport Women Social Development Trade Facilitation Statistics ESCWA Technical Committee ESCWA Ministerial Session Arab Ministerial Water Council (AMWC)* Arab Water Security Strategy Council of Arab Ministers Responsible for the Environment (CAMRE)* Arab Sustainable Development Initiative Arab Climate Change Action Plan Arab Disaster Risk Reduction Strategy *Includes support to their LAS Technical Committees

Inter-Agency Coordination TWG on Climate Change TWG on Food Security Regional Coordination Mechanism (RCM) TWG on MDGs TWG on Statistics Civil Society Advisory Board RCM Members: ESCWA (Coordinator), UNAIDS, UNCTAD, UNDP, UNDOCO, UNEP, UNESCO, FAO, UNFPA, UNHABITAT, UNHCR, UNIC, UNICEF, UNIDO, UNIFEM, UNOHCHR, UNODC, UNOPS, UNRWA, UNU, ICAO, IFAD, ITU, ILO, IOM, IMF, LAS, OCHA, UPU, WFP, WHO, World Bank

Regional Preparations for Rio+20 ESCWA led & coordinated a Consultative & Multi-Sectoral Process aimed at Integrating Sustainable Development in the Arab Region Trade & Environment (Beirut) Green Finance Green Industry Civil Society (Dubai, Beirut) Private Sector (Beirut) Water (Zaragoza) Energy & SCP (Cairo) Green Jobs (Syria) Regional Institutions for SD (Jeddah) UN Regional Organizations (RCM-Beirut) National Consultations (KSA, Syria, Jordan) Arab Regional Preparatory Meeting for Rio+20 (Cairo, 16-17 Oct)

Conclusions The integration of the 3 pillars of Sustainable Development, improved Governance and increased Financing allows for progress towards sustainable development goals. Sustainable Development requires the engagement of a range of multi-sector, public and private stakeholders. Participation, transparency & accountability are essential components of governance for sustainable development. Arab Regional Preparations for Rio+20 have engaged a wide range of stakeholders through a variety of platforms to foster an integrated vision and renewed commitment for sustainable development in the Arab region. ESCWA as a United Nations Regional Commission is uniquely positioned to support Governments & Civil Society achieve Sustainable Development in the region. It is clear that a new development model is needed for the region and it is critical that that model should respond to the aspirations of the people. The new model should be more holistic, integrating the economic, social and environmental spheres of sustainable development, providing strong institutions and ensuring the active participation of all stakeholders in the decision-making process.  

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