Why the Arab States Are Falling Behind in Implementing the SDGs?
Post-COVID-19, a new economic order will emerge and the world will witness the rise of new economies and the collapse of others. The Arab region is not immune to these changes, in addition to the effect of COVID-19, the area is home to some of the worst humanitarian crises worldwide, conflict, high youth unemployment, poor economic performance, gender inequality, migration, brain drain, water scarcity, climate change, and above all weak governance. With so many problems, it is difficult to know where to begin to address them and what roles domestic actors should play to bring the change that the region desperately needs. Although the array of challenges and barriers facing Arab countries are manifesting across the region to varying degrees, it is difficult to see an end in sight and the prospects for reform seem remote.
In 2015, world leaders adopted the Sustainable Development Goals (SDGs). At that time, they were considered by many, including Arab leaders as a blueprint for prosperity. However, the initial commitment to the SDGs has lost its resonance as countries failed to implement policies to address the urgent needs of the region’s inhabitants. While there is no consensus on the root causes of the region’s economic and social woes, three issues loom particularly large – good governance, corruption, and the rentier system. Given the ramifications of these three challenges, experts perceive their resolution as key for Arab countries to move forward in achieving the 2030 Agenda.
- Rentier System
For decades a contract has been established between Arab governments and their citizens to trade social services, public jobs, and benefits that stem from oil revenues for political acquiescence. This state of affairs has created a specific rentier mentality and evolved into a culture of state reliance that severely thwarts the development of institutions. As a result, only a few are engaged in the generation of rent (wealth), while a majority are involved in the distribution or utilization of it.
How sustainable are the rentier economies in the Arab region? A closer look shows an exponentially decaying trend in most countries where rents are used to subsidize goods and services and generate jobs in the public sector, especially when oil prices are high. However, once oil prices drop, it leads to a government budget deficit, requiring either an increase in taxes or government spending cuts. This unstable tendency has rendered the system unsustainable, put Arab societies under severe strain, and made it difficult to address genuine grievances.
Furthermore, oil reserves, which serve as the only source of revenue in some countries, have declined dramatically in many Arab countries making the already-challenging political and economic status quo more likely to fall. Even oil-importing economies like Egypt, Jordan, and Sudan, are tied to the economies of the oil exporters in the region in terms of remittances, external assistance, and labor markets for their citizens. In addition, economic development hasn’t kept pace with population growth as state institutions struggle with the rising demands of citizens. Over the past decades, Arab populations have grown from 222.7 million in 1990 to 436.4 million inhabitants in 2020. As a result, population growth has depressed living standards in most states exerting a significant negative effect on per capita income growth. Thereby, vulnerable populations continue to be at risk of being left behind which constitutes a potential threat to political and economic stability in the long run.
Amid strong and increasingly intractable dilemmas, Arab governments need to usher in a transformative shift in development by replacing the rentier state paradigm with a new structure that is based on merit, work reward, innovation, and initiative. By the same token, any effort at economic diversification must confront the imbalances inside the rentier system by strengthening the role of the private sector, ending the domination of the public sector over the private sector, and replacing subsidies with targeted programs. To do so, will require challenging the political institutions as well as social and cultural practices within the society that have evolved over decades around them.
2. Good Governance
In order for Arab states to improve their capacity to govern, they need to develop new capabilities to grow sustainably and inclusively. Reform initiatives must gradually shift from centralized decision-making to implementing specific policies and programs that align with the SDG goals and targets. More importantly, functional states require functional institutions. However, functional institutions require a modus operandi that is based on five modesEditSign of government: governance through hierarchy, persuasion, markets and contracts, community engagement, and network associations. These modes deserve considerable attention because they are fundamentals to strengthen state institutions and make them more efficient.
Meanwhile, the policy orientation, organization, and management stage of reforms should be marked by three major tasks. A wider institutional upgrading, developing closer ties with non-government sectors, and improving levels of political participation that harness “the power of citizens” to steer economic progress in the right direction. In this regard, the first test is to regain the political will to initiate change and to move in a new policy direction. Due to the fact that the responsibility for reshaping the region rests primarily with governments and their people, Arab leaders and citizens are invited to develop a new social contract based on more sustainable political and socio-economic models. Otherwise, all forms of good governance will be eroded, and attempts to achieve the SDGs are likely to fail.
Furthermore, for change to be transformative, regaining the eroded trust between governments and their citizens is key. Too many Arab leaders treat their citizens with caution and consider them as threats to be managed rather than as resources to be nurtured. Thus, laying the foundations of a new social contract between governments and their citizens as a starting point is necessary for the region to succeed. However, the need to move beyond abstract concepts of the social contract requires mobilizing the potential of human and non-human resources at their maximum capacity. Meanwhile, it entails a high level of engagement while taking into account national realities, capacities, and levels of development in each country in order to accelerate the pace of implementation of the SDGs. Finally, aligning national priorities with the SDGs and changing the institutional setup for its implementation will bolster confidence in the overall system architecture of the region and boost its socio-economic development.
3. Fighting Corruption
There’s a recognition among scholars that high levels of corruption result from low levels of social trust increasing the potential for internal disorder and conflict. Unfortunately for the Arab states, the ability of people and societies to come together and effect change is impeded by the corruption that is engrained in institutions whether they are political or legal. What’s more, gaps in most countries’ legal systems sustain corrupt practices. Highly personalized institutions controlled by ruling elites further create setbacks in combating corruption. This has turned legal and institutional anti-corruption agencies into more lip service rather than real independent judiciaries that hold corrupt people accountable for their actions.
Furthermore, in the absence of any transparent legal institutions and accountability mechanisms, the role of certain patronage networks with their entrenched economic interests has become a handicap for development. Most of these patronage networks dominate different aspects of Arab economies, operate with minimal scrutiny, and benefit from weak regulations and lax enforcement. Additionally, part of what enables these networks is the administrative loopholes within laws that give leeway for total impunity. Allowing corruption to become rife with little accountability. Weak enforcement mechanisms with a limited number of corruption prosecutions and condemnations, make the region a safe haven for corrupt people.
In order for the region to build a prosperous society, Arab governments must establish new standards of accountability, both within state institutions and between them. Without strong, independent, and efficient legal institutions, corruption will continue to flourish, further exacerbating the socioeconomic fragility of the region, and nurturing public distrust of the government.
The Way Forward
Five years into the 2030 Agenda, the Arab region is falling behind on the global stage and all indicators point to a delay in achieving the SDGs. These indicators, however, only tell part of the story, the area is the least integrated region in the world in terms of trade, despite its tremendous resources and capabilities.
There are no quick remedies to any of the above-mentioned socio-economic challenges but the region can work together and implement an integrated policy approach to achieve the SDGs by 2030. In light of this, there is no single answer on how SDG priorities should be approached in a post-COVID-19 environment. However, the starting point for implementation must focus on goal 16 because economic development efforts are unlikely to succeed without peaceful and inclusive societies. Moreover, there is an increasing recognition, among governments and citizens across the region, that more effort needs to be made in fighting corruption, fostering a culture of accountability, and promoting the rule of law. What’s more, Arab decision-makers should know that economic prosperity is not measured by hydrocarbons or natural resources but by the real wealth that resides in the region’s youthful and dynamic population. Thus, as they voice for change and pave the way for reform, they should consider investing in human capital and embrace a policy of work reward, innovation, and initiative.
Pockets of hope remain as long as the voice for change continues to exist. However, the plans for SDGs achievement in 2030 must go hand-in-hand with a transformative shift in development. By aligning and integrating planning and budgeting within a fully nationalized SDG monitoring framework, the SDGs will provide Arab countries with a framework for a safer economy. A robust policy design must highlight obstacles, assess them, and mobilize internal and external resources to ensure sustainable economic solutions.