The publication notes that the FfD outlook for the Arab region remains turbulent because of a strained socioeconomic fabric that risks being frayed by the biases of the status quo.
It finds that three years after the adoption of the Addis Ababa Action Agenda (AAAA) on FfD, the Arab financing gap continues to rise, with trillions needed in quality investments of all kinds.
In recent years, for every US$1 gained/mobilized through prime cross-border FfD channels, the has region lost/returned US$2.5 to other regions, including high-income bracket economies.
November 2018: The UN Economic and Social Commission for Western Asia (ESCWA) published its first assessment of the state of financing for development in the Arab region. According to the authors, the ability of Arab societies to withstand, adapt and recover from cascading global and regional crises “is withering.”
The report was published in advance of the International Conference on ‘Financing Sustainable Development – Curbing Illicit Financial Flows (IFFs),’ which took place from 28-29 November 2018, in Beirut, Lebanon. The conference aimed to crystalize the Arab region’s input to the 2019 High-level Dialogue on Financing for Development (FfD) and the UN High-level Political Forum on Sustainable Development (HLPF).
The publication notes that the FfD outlook for the Arab region “remains turbulent,” primarily because of a strained socioeconomic fabric that risks being frayed by the biases of the status quo. The report finds that three years after the adoption of the Addis Ababa Action Agenda (AAAA) on FfD, the Arab financing gap continues to rise, with trillions needed in quality investments of all kinds. The report stresses that FfD is neither happening at the pace nor magnitude that can turn conflicts, poverty, inequality and other socio-economic hardships into “an issue of the past,” let alone realize sustainable development. The cost of conflict and the region’s post-conflict reconstruction add to the challenge, and divert attention away from the 2030 Agenda.
A finding drawn from the analysis of direct and indirect FfD exposures revealed that between 2011 and 2016, for every US$1 gained/mobilized through prime cross-border FfD channels, the region lost/returned US$2.5 to other regions, including high-income bracket economies. The situation, the report notes, challenges the dominating development narrative, as the region appears to be witnessing “an FfD reflux”: substantial resources are flowing out of rather than into the region, constituting a leakage and opportunity lost to finance the region’s own reconstruction and sustainable development imperatives.
The Arab region is also facing the largest crisis of forced displacement since World War II. The rising death toll, the publication emphasizes, constitutes a more critical concern to reconciliation, given that no price tag can be placed on the loss of life that remains largely unaccounted for in empirical assessments. The authors note that another challenge is the looming “lost generation” of Arab youth: more than 92 million decent jobs need to be created by 2030, at a time when inequalities are set to become more acute within the different segments of Arab societies, with oil-rich Arab economies investing almost US$3 trillion in sovereign wealth funds outside the region, financing this way the public debt of many developed economies.
The report warns that the resources mobilized domestically may fall short of achieving the SDGs if the informal sector remains unintegrated in the formal economy and insulated from the overall planning and implementation of the SDG reform agenda. The prospects of the region to achieve the SDGs are further undermined by the fact that the protracted delivery of the 0.7% target for official development assistance (ODA) is undermining the global FfD framework as large portions of aid budgets (11% of Donor Assistance Committee [DAC] allocations) are diverted to cover in-donor refugee costs. [Publication: The State of Financing Development for the Arab Region] [Report summary]