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Financial Crises, Poverty and Environmental Sustainability: Challenges in The Context of The Sdgs and Covid-19 Recovery
Financial Crises, Poverty and Environmental Sustainability: Challenges in The Context of The Sdgs and Covid-19 Recovery
Financial Crises, Poverty and Environmental Sustainability: Challenges in The Context of The Sdgs and Covid-19 Recovery
Andreas Antoniades
Alexander S. Antonarakis
Isabell Kempf Editors
Isabell Kempf
United Nations Research Institute for
Social Development (UNRISD)
Bonn, Germany
© The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature
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For the kids
who dream, create and pave the way
for a just and sustainable world
in this little peddle of our cosmos
that we call earth
Foreword
vii
Foreword
ix
x Foreword
There have been many books, over many centuries, written about financial
crises, enough to likely fill a small library. Likewise, a large literature is dedi-
cated to different aspects of poverty and to the topics of nature and environ-
mental quality. So perhaps there is no great urgency for another book on
either finance, poverty or the environment. But there is a great urgency for
one that links all three.
In the day-to-day world, linkages of all kinds are profound but largely
invisible; they are there, but have to be sought out to be seen. A whole field of
inquiry—systems science—has been devoted to making linkages visible and
understandable. We have developed systems tools, such as econometrics for
economists, causal diagrams for social scientists, numerical models for cli-
mate scientists, to uncover and comprehend these ubiquitous
interconnections.
As this book shows, the linkages among financial crises, poverty and the
environment are also widespread and important. National financial crises
have spinoffs such as curtailed investment in education, which in turn is
linked to the poor being unemployable, which in turn is linked to deplorable
ongoing poverty. The same financial crises have links to worsening air and
water quality, which then causes illnesses especially among the poor—and,
again, miserable ongoing poverty and so on. This book expounds upon these
and many other interconnections that hamper the well-being of people and
the integrity of the rest of nature, all intensified by the pandemic.
But it also reports on linkages that lead to virtuous results. If nations could
manage to avert financial crises, and if power and wealth could be shared
more equitably, then these positive developments would set up new links:
from new opportunities for the poor, to stronger support for protecting the
environment, to a more secure financial basis for communities and countries.
Perhaps the sustainable development goals can help realise these positive
connections internationally.
xi
xii Foreword
This book is welcome because it raises our awareness about the important
interconnections among a nation’s financial crisis, its impact on poverty and
its damaging effects on people and environment. But it also shows how link-
ages can be finessed to produce solutions—debt forgiveness, wealth redistri-
bution and actions to advance climate and environmental justice. It makes
visible the interconnections we have to grasp in order to find durable solu-
tions to ending poverty.
Andreas Antoniades
Alexander S. Antonarakis
Jonathan Gilman
Isabell Kempf
xiii
Contents
xv
xvi Contents
Index���������������������������������������������������������������������������������������������������������� 187
About the Editors
xvii
Contributors
xix
xx Contributors
Jeet Singh Rajiv Gandhi Institute for Contemporary Studies, New Delhi,
India
Mitelo Subakanya Indaba Agricultural Policy Research Institute (IAPRI),
Lusaka, Zambia
Ly Thim Mekong River Commission (MRC) Secretariat, Vientiane, Lao
PDR
Minh Thu To Institute for Foreign Policy and Strategic Studies (IFPSS), the
Diplomatic Academy of Vietnam (DAV), Hanoi, Vietnam
The Crises-Poverty-Sustainability
Nexus in the Context 1
of the Sustainable Development
Goals and Covid-19
8
2021
6
0
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
-2
-4
Source: International Monetary Fund, World Economic Outlook Database, April 2021
Other familiar crisis patterns (Antoniades and and Rosado et al. this volume; Shepherd et al. this
Antonarakis this volume) were also visible in 2020. volume). Furthermore, pandemic-related restric-
For instance, there have been reports for increases tions and the corresponding economic crisis has led
in illegal logging and illegal resource extraction to the collapse of a wide range of environmental
linked to loss of rural livelihoods and reduced moni- monitoring and protection activities, including pro-
toring and enforcement capacity (IUCN 2020). tected area management, restoration programmes
Similarly, the large number of unemployed people and wildfire fire management (IUCN 2020).
migrating from urban centres back to villages con- There is also the danger that the historically
tribute to subsistence-related illegal activities such unprecedented economic support programmes
as logging and agricultural encroachment, and add that countries have utilised to support livelihoods
new pressures on biodiversity, for instance via wild- and industries, in ‘express mode’, may (also)
life poaching or intensified nearshore fishing (ibid; have adverse effects on global transition to sus-
4 A. Antoniades et al.
35 000 1500
1000
30 000
500
25 000
0
20 000
-500
15 000
-1000
10 000
-1500
5 000 -2000
- -2500
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
Source: Authors’ compilation based on IEA data
tainability. This may happen by locking in or pro- There is also evidence of a pandemic-triggered
longing unsustainable and environmentally vicious cycle between lower growth, inequality
destructive practices and industries that existed and social unrest (Saadi Sedik and Xu 2020). The
before the pandemic, by enhancing greenwash- fact that the Covid-19 pandemic broke out at a
ing rather than a green recovery, or by creating a moment when poverty reduction, food security
new generation of ‘zombie’, debt-trapped corpo- and debt servicing in developing economies were
rations, households, countries (see next section). already moving fast into the wrong direction
In regard to the current crisis, it is also it is indicates the magnitude of the challenge.
also worth keeping in mind, that, according to Figure 1.4 brings together several vicious cycles
historical experience, epidemics/pandemics lead that could conflate in the post-pandemic era.
to significant and persistent increases in inequal- Financial crises impact negatively on poverty
ity within and across countries (Furceri et al. and inequality dynamics, which in turn can increase
2020). This evidence on past epidemics is in line the likelihood for another financial crisis. At the
with our recent research on the adverse impact of same time increased poverty and inequality may
financial crises on multidimensional poverty lead to changes in consumption, production and
indicators, e.g. on education, which is a critical investment patterns that have a negative environ-
route for escaping poverty and reducing inequal- mental outcome. To avoid a crisis-poverty vicious
ity (Antoniades et al. 2020). The magnitude of cycle, governments (and the private sector) priori-
the current crisis however is unprecedented. As tise growth rates above all other policy targets. In
Berkhout et al. (2021) note ‘the coronavirus pan- this manner, the recovery period is, at least partly,
demic has the potential to lead to an increase in fuelled by unsustainable growth that is based on
inequality in almost every country at once, the practices that are negatively affecting social devel-
first time this has happened since records began’. opment and environmental outcomes. This impacts
1 The Crises-Poverty-Sustainability Nexus in the Context of the Sustainable Development Goals… 5
Financial
Crisis
poverty /
slower growth inequality
increase
livelihood-
increasing triggered
social unrest environmental
degradaon
increased
borrowing costs -
decreased unsustainable
market access - growth
descreased
less fiscal space social and
environmental
resilience
negatively on social (e.g. inequality, health) and leave the Covid-19 crisis morph into a vicious
environmental (e.g. ecosystem services capacity, cycle. Our transition to sustainability depends on
ecosystem dynamics, climate change) resilience, the way we will respond to the current crisis and
exacerbating the overall crisis negative impact and our ability to create a new socio-environmental
vulnerabilities (see also Diwakar and Lacroix model that breaks away from the above
2021). Increasing vulnerabilities lead to credit rat- crises-poverty-sustainability nexus. The remain-
ing downgrades, increases in borrowing costs, can ing sections turn on to these issues.
lock countries out of global debt markets, and can
lead to debt sustainability problems, leading to new
financial crises (see also Beirne et al. 2021). In this 1 reen Aspects of Covid-19
G
context, governments have less resources to deal Support and Recovery
with the sources and adverse dynamics that created Strategies: Building Back
the problem in the first place, let alone investing in Better?
needed climate adaptation measures and transition
to sustainability. This impacts negatively on growth Provisional evidence and data on Covid-19 sup-
rates, decreases social well-being and increases the port measures are alarming. The Global Recovery
possibility of social unrest. This creates another Observatory (GRO) that is supported by UNEP
vicious cycle, where increased social unrest leads offers the most comprehensive analysis of
to credit downgrades, slower growth, and more COVID-19-related fiscal rescue and recovery
socio-political instability, that reduces further efforts in 50 leading economies. Figure 1.5 pres-
socio-environmental resilience. ents the latest GRO data, as of 03 December
Breaking away from these vicious cycles 2021, which indicate that out of a total US$16.97tr
requires decisive policy actions both domestically rescue and recovery spending only 4.4% went to
and globally (see Mahajan and Singh this vol- ‘green projects’. Out of this US$16.97tr, $13.5tr
ume; Newell this volume). We cannot afford to went to immediate rescue efforts to manage the
6 A. Antoniades et al.
Fig. 1.5 Global government recovery spending per sec- investments are indicated in dark green colour. Source:
tor during the COVID-19 crisis. Note: Data as of 3 Authors’ compilation based on Global Recovery
December 2021, based on a sample of 50 countries. Green Observatory (GRO) data
short-term effects of the pandemic, while $3.5tr were largely concentrated in two countries,
was devoted to longer term recovery measures. Spain and Germany);
Still, green investment is only 21% of this longer- –– $86.1bn for green transport (electric vehicle
term recovery spending. To contextualise this transfers and subsidies, investments in public
further, in 2020, only $368bn of $14.6tn COVID- transport, cycling and walking
induced spending (rescue and recovery) was infrastructure);
green (2.5%), including (GRO 2021): –– $35.2bn for green building upgrades (mostly
through retrofits, notably in France and the
–– $66.1bn invested in low carbon energy (mostly UK);
renewable energy projects and hydrogen and –– $56.3bn for natural capital or Nature based
infrastructure investments, although these Solutions (NbS)—ecosystem regeneration
initiatives and reforestation (two-fifths was
1 The Crises-Poverty-Sustainability Nexus in the Context of the Sustainable Development Goals… 7
directed towards public parks and counter pol- ronmental standards’, even if this was temporary,
lution measures, notably in the US and China); and in 16 out of 24 economies some of the bailout
–– $28.9bn in green R&D (renewable energy packages that were used had no environmentally-
technologies, technologies for decarbonising related conditionality. As countries move from
sectors such as aviation, plastics, and agricul- rescue to recovery packages, there seems to be
ture, and carbon sequestration). some momentum towards greener support pro-
grammes (ibid.), but damage has already been
Respective data and trends are reported by other done.
monitoring initiatives too. According to the The GSI findings are confirmed by the G20
OECD (2021) Green Recovery Database (GRD) Energy Policy Tracker (EPT), published by a
that monitors the Covid-19 stimulus and recovery large number of institutions, led by the
packages of 43 countries, as of 19 April 2021 the International Institute for Sustainable
amount of money invested in measures with Development (IISD). According to EPT, as of 5
likely positive environmental impact was almost May 2021, G20 countries have committed at least
the same compared to the amount invested in $646.43 billion in energy-related pandemic sup-
measures that are expected to have mixed or neg- port. Of this, US$291.10 billion supported fossil
ative environmental impacts (U$336 and 334 bil- fuel energy, as opposed to US$245.91 billion that
lion respectively). Mixed or negative measures supported clean energy. Furthermore, 83.2% of
included rolling back regulations with regard to the G20 fossil fuel support was unconditional.
water quality, air pollution and single-use plas- Indicative measures here include expansion in oil
tics; reductions in environmentally-related taxes and gas refinery capacity and distribution net-
and fees for polluting activities; unconditional works, new mining projects, new emission-
bailouts to emission-intensive industries such as intensive projects especially in the transport
airlines and fossil-fuel companies; and subsidies sector such as new roads, cancellation of lease
for fossil-fuel intensive infrastructure (OECD payments for airport facilities, reduction in car-
2020a). Furthermore, the OECD estimates that bon energy prices for industries, introduction of
the environmentally positive measures account floor prices for carbon allowances at auction in
for barely more than 2% of all Covid-19 rescue emissions trading schemes, extension of dead-
and recovery funding combined (OECD, 2021: lines for pollution data requirements by indus-
5). tries, etc.
The ‘Greenness of Stimulus Index’ (GSI) pub- Clearly there is a misfit between the focus of
lished by Vidideconomics (2021) points to a sim- the Covid-19 support programmes on fossil-fuels
ilar picture. Focusing on G20 and selected other (both in terms of directly increasing emissions,
advanced and emerging economies GSI finds that and locking in patterns and practices that increase
out of a committed aggregate US$4.6 trillion emissions) on the one hand, and the need for a
environmentally relevant stimulus worldwide, rapid decarbonisation and energy transition in the
cutting across the sectors of agriculture, industry, global economy on the other.
waste, energy, transport, only US$1.8 trillion (or Yet, the contrast between ‘green’ and ‘not
40.1%) could be considered ‘green’. Put differ- green’ Covid-19 recovery projects does not
ently a large part of the first wave of stimuli pack- exhaust the complexity of the challenge at hand.
ages will have a negative impact on the As many chapters in this volume make clear (e.g.
environment, e.g. direct investments in fossil-fuel Pichdara et al. this volume; Shepherd et al. this
energy, investments in high emissions infrastruc- volume; Osakede and Adeleke this volume),
ture, and waiving of environment/emissions improving basic infrastructure, such as roads, is a
related fees. Of course, this is only in terms of the critical aspect for increasing resilience, and
quantifiable impact. According to GSI, 22 out of securing and ameliorating the livelihoods of mil-
the 24 economies under examination have also lions of rural communities across developing
implemented some form of ‘deregulation of envi- countries, which, in turn, can have positive envi-
8 A. Antoniades et al.
ronmental and social outcomes. Therefore, (US$29.2b). Furthermore, the rescue and recov-
improving this needed infrastructure is an inte- ery spending and its decision-making structure
gral part of making the recovery from Covid-19 are characterised by gender imbalances that may
inclusive. If our ‘building-back-better’ locks out reproduce structures of exclusion and inequality
and excludes these precarious livelihoods and that undermine the needed just and inclusive
communities then it is bound to fail, leading to transition to sustainability (UN Women-ILO
patterns, practices and activities that exacerbate 2021; UNDP 2021; UN Women 2020). Equally
the existing environmental crisis. important, at-risk populations in vulnerable set-
Similarly, ‘green’ does not have just one tings such as refugees living in camps, internally
shade. What is included in the green recovery displaced persons, and indigenous communities
national strategies and how it impacts on the mul- risk being left behind in the adopted recovery
tiple environmental challenges ahead of us mat- strategies (UN Women 2020; see also Aslany and
ters a great deal. For instance, addressing climate Brincat 2021; Hujo 2021).
change is a necessary but not a sufficient condi- Therefore, a ‘green’ vs. ‘not green’ dichotomy
tion to avoid a catastrophic environmental col- in the recovery from Covid-19 strategies and pol-
lapse. Biodiversity loss is an existential threat of icies is not well-placed to capture the complexity
equal proportion. With one fourth of all plants of the challenge we face and guide us in the trans-
and animals currently threatened by extinction, formation required to achieve socio-
and 30% reduction in global terrestrial habitat environmental sustainability (see also
integrity caused by habitat loss and deterioration Phoumin et al. this volume). For the later, we
(UN 2019) the ecosystem on which our health need also to open-up and where needed problem-
and existence depend is under unprecedented atise, rethink or expand what we (need to) count
stress. Of course, climate change and biodiversity as ‘green’. To do this, we may need to recast
loss are not independent from each other—they some of the underlying assumptions and param-
act as accelerators for each other both in periods eters that have determined the economy-
of deterioration and amelioration. It is also worth environment interaction in our modern societies,
keeping in mind that ‘green investments’ may as echoed by the trade unions in the World
have their own adverse environmental implica- Economic Forum meeting in 2021: ‘The choices
tions (e.g. increase in CO2 emissions, land-use made by world leaders and by business in 2021
conversion, biodiversity loss) (Phoumin et al. this will either heed the call of workers and civil soci-
volume). ety to reform the economic model and help create
Beyond shades of green, the social dimension a just and sustainable future, or maintain business
of the rescue and recovery programmes is critical as usual and see a model of corporate greed
for the environment and the transition to sustain- entrench inequality, exclusion and despair per-
ability. As shown by Kempf and Dutta (2021) petuating instability for our communities and our
countries with effective health and social protec- planet’ (ITUC 2021).
tion systems in place to provide universal cover-
age were better prepared for the Covid-19 crisis
and its socio-economic impacts. They had insti- 2 ethinking our Approach:
R
tutional capacities to scale these systems and tar- From ‘Net Zero’ to ‘Do no
get vulnerable groups faster. This is key to avoid Harm’
the vicious cycles that link financial crises, the
environment and sustainability, as we described Mainstreaming the environment in global and
above. Yet, as evident in Fig. 1.5, overall, only a national policy-making has been a prolonged and
very small amount of the US$15.2tr rescue and difficult battle that is far from over. In most cases,
recovery spending went directly to the social the key messages and environmental issues have
dimension, e.g. worker retraining and job cre- had to be formulated in a way that is comprehen-
ation (US$80.2b) and targeted cash transfers sible to policy actors, institutions and stakehold-
1 The Crises-Poverty-Sustainability Nexus in the Context of the Sustainable Development Goals… 9
ers. The impact of the Stern Review on the worldwide as a matter of urgency (considering
Economics of Climate Change (2006) is indica- 20–25% of our greenhouse gas emissions come
tive in this regard. The report caused global shock from land cover change), and nature-based solu-
by quantifying the potential disastrous economic tions with ecosystem regeneration in mind need
costs of climate change, i.e. a 5–20% annual to be brought to the forefront of this ‘do no harm’
decrease of global GDP indefinitely, if no action policy p rinciple. It is simply not enough to advo-
was taken. Along similar lines, the estimated total cate for environmental improvement as a coun-
value to society of biodiversity and ecosystems ter-balancing measure using the ‘net zero’
services is more than US$140 trillion per year paradigm. This is all the more important consid-
(estimate for 2011), close to two times of global ering the vital functions ecosystems and access
GDP (in 2011) (Costanza et al. 2014; quoted in to natural resources such as forests, land and
OECD 2020b). The contributions of such studies water play for the livelihoods of a large part of
in policy mainstreaming the social and environ- the global population, in particular in the Global
mental emergency of our times, and clearly com- South (see also Mahajan and Singh this volume;
municating its implications to key actors such as Phoumin et al. this volume; Pichdara et al this
governments, financial institutions, businesses volume; Shepherd et al. this volume; Rosado
and households, is invaluable. et al. this volume; Scharlemann et al. 2020).
Yet, a price-tag approach to nature has not Today we have both the knowledge and resources
helped us in dealing with the actual environmen- to sustain such a shift in the global policy frame-
tal crisis in the past, and to a great extent has been work. The proposal for a global ‘fossil fuel non-
co-opted by wider financialization of nature prac- proliferation treaty’ (Newell and Simms 2020;
tices and dynamics that reproduce and/or exacer- Fossil Fuel Treaty 2021) paves the way for this
bate the environmental crisis. Considering the new thinking and approach.
near impossibility of keeping an increase to This leads us to our second point. The current
global warming below 1.5C by 2030, the mass economic system deals with development, pov-
extinction that is happening in front of our eyes, erty reduction and the environment as a ‘trade-
and the increase in frequency and intensity of off’. The dominant rationale is as follows: lifting
extreme natural events (climate or health related), people out of poverty requires high economic
we may be past the point that monetary represen- growth rates, while high economic growth rates
tations of projected natural catastrophes are the are environmentally damaging. In such a reading,
right approach to adopt. poverty and the environment stand at opposite
We need a new approach that moves away ends as policy objectives. In this context, devel-
from financialisation and market-based logics oping countries defend their ‘right to develop-
that allow and reproduce the ‘trading’ and/or ment’ against what they see as new forms of
‘dis/re-locating’ of environmental damage (see (green) imperialism and colonisation led by the
also Newell this volume). We need an approach global North. These are clearly fault lines pro-
that is not guided anymore by a ‘net zero’ duced by sedimented global structures of power,
approach to nature, i.e. that environmental dam- (under)development, and exploitation that have
age can go on in some areas or domains so long formed the world and its environmental crisis as
as this damage is counterbalanced by actions we experienced today (see also Bhambra 2021;
take in other areas or domains (see Duke et al. Hinds this volume). Reaching sustainability
2021). These approaches have allowed ‘business requires to address these fault lines. The destruc-
as usual’ that has been damaging the climate and tion of the environment for improving human
ecosystems on which our existence depends livelihoods is not a necessary ‘trade-off’, it is
upon to continue. It is time to replace ‘net zero’ itself a form of poverty and creates new forms of
with ‘do no harm’ as a guiding policy principle poverty by destroying sustainable livelihoods
in global environmental governance. embedded in the natural environment and through
Environmental destruction needs to be halted the loss of biodiversity and access to natural
10 A. Antoniades et al.
resources that are vital for human survival and Today we have an opportunity to build forward
well-being. The current coincidence of huge better. The wide range of national and interna-
global wealth, income and wealth disparities and tional financial support programmes currently
a looming environmental catastrophe call for a activated, and those that are to be activated in the
change in thinking and practice. In the context of near future, should this time be used as ‘sustain-
an inclusive and just transition to sustainability,ability adjustment’ programmes, i.e. as
we need to mobilise resources globally aiming to programmes that explicitly aim to implement on
create and support sustainable pathways out of the ground the transition to a global sustainable
poverty. socio-environmental system that we urgently
need. To ensure socio-environmental resilience
and sustainability, the protection of livelihoods
3 From ‘Structural Adjustment’ and the environment should be the starting point
to ‘Sustainability and driving parameter of these programmes.
Adjustment’: Towards a New UNRISD (2016) has underlined the transforma-
Eco-Social Contract tive power of integrated policies. For example,
when climate change is treated as a social and
In 2015, the international development commu- political issue, and not only as a technical eco-
nity agreed on an ambitious agenda to “transform logical one, policies can simultaneously address
our world”, with an unprecedented broad and distributional aspects and climate justice. We
transformative development vision enshrined in should then aim to promote sustainable social
the 2030 Agenda for Sustainable Development. development by reducing inequalities, promoting
The Agenda is a response to a challenging global gender equality, and investing in much needed
context—one marked by disparate progress in public services such as health and education for
reducing poverty; high and rising levels of wealth all. In this context, the evolving financial support
and income inequality; the persistence of other programmes should come to define the new eco-
multidimensional inequalities, including gen- social contract that will lead the way to a sustain-
dered forms; climate change and environmental able socio-environmental model in a participatory,
destruction; insecurity and conflict; migration; inclusive and just way (see Kempf and Hujo this
precarious work; as well as accelerating demo- volume).
graphic and technological change—all of which We conclude this section with three policy-
challenge the capacity of policy makers to steer related observations that emerge from the above
the course of development to the benefit of peo- analysis (see also UNEP 2020). First, policies for
ple and planet (see Kempf and Hujo this a sustained economic recovery amount to much
volume). more than just short-term fiscal stimuli of
In this context, the unprecedented socio- 1–2 years. Instead, transitioning from fossil fuels
economic shock of the Covid-19 crisis is a criti- to a low-carbon, greener economy will require
cal conjuncture. Almost half of the UN member long-term commitments (5–10 years) of public
states (86 out of 193) have formally requested spending and pricing reforms. As a consequence,
some form of financial support from the IMF, the policies chosen for short-term (1–2 years) fis-
while more are expected to do so in the looming cal measures differ from the policies for a
post-Covid-19 domino of financial crises, espe- medium to long-term (5–10 years) green eco-
cially in developing countries (Ocampo 2021; nomic recovery and transition.
Unicef 2021; Haughton and Keane 2021). In the Second, public spending, pricing reforms,
past, International Financial Institutions such as phasing out fossil fuel subsidies, and tax-
responded to such financial support requests with ing carbon and environmental damages are nec-
‘structural adjustment’ programmes that often essary, but alone cannot create a sustainable
exacerbated the socio-economic problems they socio-environmental model for the needed rapid
aimed to tackle (see also Onyeiwu this volume). transition to sustainability. We need an approach
1 The Crises-Poverty-Sustainability Nexus in the Context of the Sustainable Development Goals… 11
exploitation and mode of integration in the global undermine the income potential of future genera-
economy that has determined the model of eco- tions and state capacity for debt repayment.
nomic development of the Caribbean states, and These findings are very important in the Covid-19
we need a significant rebuild of the global econ- context of increasing external borrowing.
omy that recognises and deals in a just way with The remaining five chapters aim to advance
these legacies to bring an end to this model. our understanding of the financial crises, poverty
Han Phoumin, To Minh Thu, and Thim Ly use and environmental sustainability nexus in the
an innovative scenario impact assessment context of the SDGs through detailed country
approach to investigate larger-scale transbound- case studies. Vijay Mahajan and Jeet Singh inves-
ary synergies and trade-offs between economic tigate the challenges for achieving the SDGs in
development and poverty alleviation along the India. Most people in India are traditionally
Lower Mekong Basin. To do this they use a dependent on natural resources for their liveli-
Sustainability Index that includes more than 30 hoods bringing ecological knowledge and under-
economic, social and environmental indicators standing, but at the same time this dependency
based on SDGs. Their results illustrate that results in overexploitation of resources. To deal
Mekong basin environment and communities with this conundrum the authors suggest a twin
will face diverse stresses depending on location investment strategy, where the regeneration of
and livelihood diversification strategies. For natural capital must go hand in hand with mass
instance, one of the scenarios that includes all job creation and promotion of sustainable
planned mainstream dams estimates the net eco- resource-based livelihoods. This will create a vir-
nomic benefits for the hydropower sector at US$ tuous sustainability cycle. Reduced financial dis-
32.8 billion, although unevenly distributed tress in the population will reduce the stress on
amongst the riparian countries. Yet, this is accom- the environment; and regenerating the degraded
panied by significant ecological changes, severe natural resources will improve resilience and
loss of biodiversity, and adverse impact on liveli- livelihoods, accelerating further the positive
hoods (e.g. up to 1.2 million people in Cambodia environmental impact. The authors conclude by
and VietNam would be put at risk, over and above identifying funding pathways to achieve these
the ‘baseline’ scenario). The authors present rec- synergies, including increasing public expendi-
ommendations for creating and managing syner- ture towards disadvantaged groups, rendering
gies between economic and socio-environmental public expenditure more efficient and outcome-
sustainability. oriented, and diversifying the funding base
Uche Osakede and Oluwayemisi Adeleke beyond the state.
examine the effects of external government bor- Steve Onyeiwu looks at the case of Ethiopia
rowing on infrastructure and human development and assesses if the implementation of the Structural
in Africa. The authors use data from 49 African Adjustment Program (SAP) in the 1990s has
countries for the period 1990–2019. Using a helped to achieve social and environmental sus-
panel threshold test, they find a lack of threshold tainability. The Ethiopian structural adjustment
effects of external debt on infrastructure and was centred on eliminating financial repression,
human development. Using a linear fixed effects developing the private sector, and promoting mac-
model they find an insignificant effect of external roeconomic stability, with limited understanding
debt on infrastructure and a significant negative on its impact on sustainable development. The
effect on human development. They also find the author uses a Triple-Bottom-Line analytical
existence of a threshold effect of external debt on framework to evaluate the impact of the SAP on
GDP. Osakede and Adeleke’s results suggest that economic, equity and environmental sustainabil-
borrowed funds are not productively channelled ity. Onyeiwu finds that the SAP in Ethiopia has
towards growth-enhancing investments in areas been a failure for sustainability. It has been inef-
related to infrastructure and human development. fective both in eliminating chronic poverty and
As a result, the use of external funding may preventing environmental degradation, with prob-
1 The Crises-Poverty-Sustainability Nexus in the Context of the Sustainable Development Goals… 13
lems such as over-grazing, over-fishing, deforesta- Lonn Pichdara and colleagues tackle the issue
tion, and biodiversity loss persisting. of climate change resilience and vulnerability in
Andrew Shepherd and colleagues do an analy- rural communities in Cambodia. The authors
sis of the poverty-environment-disaster manage- observe that although climate change interven-
ment nexus in Zambia, and identify policy tion programs have increased, there is limited
priorities to move people out of poverty in a sus- evidence on the impact of these programs on the
tainable way. There is a number of overlapping climate-poverty resilience of the targeted com-
challenges. The political economy of Zambia munities on the ground. To address this gap, they
leaves women and rural populations behind. The study a pilot project in Kampong Svay district in
high dependence on maize has led to income vol- Cambodia that aimed to address interacting
atility in small-holder farms and to soil degrada- water-sanitation-food challenges, by developing
tion. Assets among poor households, especially climate-resilient infrastructure (e.g. construction
women-headed households, are scarce, including of wells, water collection tanks, latrines, home
fertilizer, transport, and mechanisation. gardens). The authors identify weaknesses related
Investment into resource conservation, such as to the local targeting of the project, the lack of
fisheries, soil and water sustainability are lack- financial and technical support, and broader
ing. Disaster risk management especially with infrastructural issues (e.g. water and road acces-
droughts has been poor. Policy priorities would sibility) that constrained the impact of the inter-
need to include stabilising farm incomes, increase vention, and offer recommendations on how
household asset with particular focus on women- these weaknesses can be addressed and avoided
headed households, focus on land and water con- in future programs.
servation practices, and build a more confident Isabell Kempf and Katja Hujo conclude the
disaster response. volume by providing a sobering analysis on the
Christopher Rosado, Eveline Kurniati, and need to finally move past the social contract of the
Mika Peck use the current Covid-19 pandemic to twentieth century that was centred around balanc-
examine the determinants of community resilience ing the economic imperatives of growth and pro-
in small-scale fisheries in North Bali, Indonesia. ductivity, with the social imperatives of
They define community resilience as the ability of redistribution and social protection. Failing to
a community to adapt, survive and potentially account for natural planetary boundaries, this
thrive despite stressors such as economic and envi- social contract proved unable to stem environmen-
ronmental disasters. They develop a comprehen- tal destruction, climatic changes, and extreme
sive analytical framework to assess this resilience events such as the current pandemic. It has also
based on ten vulnerability and resilience indica- failed to be fully inclusive of marginalized groups
tors, related to health, economics, and environ- such as women, indigenous peoples, informal
ment. The authors find that fisher community workers or migrants. The authors show why
resilience was materialized from job diversifica- responding to this crisis and getting SDG imple-
tion, local financial support systems, social net- mentation back on track demand a new contract fit
works, and existing networks with knowledge of for a new era – an eco-social contract. This new
conservation concepts. However, Covid-19 contract needs to be based on the inclusion of mar-
impacted community medical infrastructure, ginalised views, and progressive alliances with
affected the control of supply chains and fish regu- previously excluded groups. It needs to seek har-
lations, and has led to increases in more unsustain- mony and protect nature and the common goods,
able reef fishing. Finally, they outline key policy transform economies to deal with environmental
recommendations suggesting urgent action to destruction and social exclusion and inequality,
strengthen fisher networks and socio-economic and include a progressive fiscal contract for cli-
and environmental sustainability. mate action and SDG implementation.
14 A. Antoniades et al.
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Adjustment, Economic Growth and Sustainability: Sustainable Development Goals: the role of
A Case Study of Ethiopia, in: Antoniades et al environment–human linkages. Sustainability Science
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and Covid-19 Recovery. New York: Springer. ing poverty reduction: an analysis of Zambian poverty
Osakede, U.A. & Adeleke, O.K. (this volume) dynamics and policy implications, in: Antoniades et al
Government Borrowing, Infrastructure and Human (eds), Financial Crises, Poverty and Environmental
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Resource Development in the Lower Mekong Basin: responsive recovery, New York: UN Woman.
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Finance for the Common Good:
Re-Thinking the Relationship 2
between Finance, Poverty
and Sustainability
Peter Newell
ticular, I argue the need to foreground questions neglected. It is almost as if mobilising the finance
of who (which social groups) and what finance is is an end in itself. Lack of access to credit, inabil-
for (which specific goals) and which governance ity to afford connection charges and distance
mechanisms we might need to ensure that it con- from electricity infrastructures as barriers which
tributes to, rather than undermines, the achieve- inhibit poor people’s access to electricity hardly
ment of the SDGs. feature at all in the rush to accommodate the pref-
To raise these questions is not to negate the erences and needs of private capital to find new
obvious importance of finance to achieving the outlets for investment (Newell 2021). Challenging
SDGS. Estimates vary of course, but some sug- financialisation and the fetishization of finance as
gestions are that $220–260 billion in interna- an end itself means repositioning finance as a
tional public finance will be required to meet the means to achieving broader social and environ-
SDGs with incremental financing needs of $1.4 mental ends which need to be articulated and
trillion in low- and lower-middle-income coun- guide decision-making.
tries (Schmidt-Traub 2016). Much of this will Any discussion of the relationship between
need to lever additional private finance towards finance, poverty and sustainability also needs to
this ambitious agenda. But we also need to chal- be cognisant of growing concerns about the
lenge dominant narratives about ‘de-risking’ financialisation and commodification of nature
finance and the misallocation of risk between which complicates and undermines the task of
public and private actors where the former is protecting the environment written into the SDGs
expected to absorb risks to enable the private by reducing the value of environments to assets
accumulation of profits by the latter. We also and capital which can bought and sold. Experience
need to distinguish between different types of to date suggests that luring private capital towards
finance (Spratt 2015) to assess their role in sup- the goal of sustainability by financialising eco-
porting just and sustainable transitions where system services runs the risk of further impover-
longer-term and more patient forms of capital ishing resource dependent poorer communities
will be of far greater value than short term and without the purchasing power and supportive
speculative investments with high demands for a ownership regimes to safeguard their ‘natural
short term return. capital’. Land grabs and green grabs and prob-
Currently, the drive to mobilise capital is often lematic carbon trading projects have shown what
disconnected from an understanding of where can result from attempts to ‘sell nature to save it’
and for whom and even for what that capital is (McAfee 1999; Fairhead et al. 2012; Bumpus and
needed. A major task for the SDGS and the gov- Liverman 2008; Leach and Scoones 2015).
ernments expected to implement them is to steer Finance wields enormous power, especially at
that finance to where it is most needed, as well as this historical juncture, what academics some-
redirect away from forms of destructive develop- times refer to a finance-led regime of accumula-
ment which are incompatible with those SDGs tion (Arrighi 2010). The question, an open one, is
which more obviously address sustainability whether this power can be directed towards more
around climate change, water, oceans, land and sustainable and inclusive forms of development.
biodiversity. As I have argued elsewhere, well Historically, finance has played disruptive and
intentioned initiatives such as the Africa key roles in unsettling incumbency (Perez 2002)
Renewable Energy Initiative (AREI) which aim and supporting key technological revolutions
to build at least additional renewable energy gen- from the industrial revolution to Fordism and the
eration capacity of 300 GW by 2030 have IT revolution. Restless capital has unleashed
focussed on calls by mainstream development ‘creative destruction’, pulling capital from one
actors to ‘de-risk’ private finance, while ques- set of technologies and infrastructures and mov-
tions about what the finance was needed for, ing it to another where higher rates of return are
whose energy needs would be met, and even how anticipated. The hope is that it could do so again
we would know what those needs were, remained as we seek to decarbonise the global economy
2 Finance for the Common Good: Re-Thinking the Relationship between Finance, Poverty… 19
and accelerate the decline of the fossil fuelled inclusive and sustainable development path,
global economy as part of a clean energy revolu- since in theory economic and human develop-
tion. Potentially, amid fossil fuel divestment, sov- ment goals can no longer be pursued at the
ereign wealth funds shedding investments in expense of social and environmental ones, nor
fossil fuels and the falling price of renewable addressed by displacing problems and responsi-
energy, we are seeing this dynamic at work again bility elsewhere, since the goals are universal and
(Newell 2015). For it to fulfil that potential we apply equally to richer countries. Yet the global
need to address the politics and governance of the goals disguise many tensions between SDGs.
SDGs. Governance here refers not just to national Above all, growth is set up as an SDG in its own
level Green New Deals or global mechanisms of right whose pursuit in a conventional sense may
coordination and steering of finance to where it is well undermine the achievement of many of the
most needed, but also and less popularly, ques- other goals. To take just one example, achieving
tions of regulation, divestment from unsustain- the goals of the Paris agreement is almost impos-
able development and ultimately the sible through the pursuit of conventional eco-
re-embedding of finance in frameworks of social nomic growth (Simms 2015) and unless the
control to ensure it serves the common good. climate crisis is adequately addressed, goals
The SDGs provide one set of goals and indica- around improved food security and nutrition,
tors by which to steer and measure the positive access to water or even reducing conflict are
potential of finance to enhance collective well- almost certainly put out of reach.
being. Agreed in 2015 and covering key aspects A more radical reading of the Sustainable
of planetary survival from life on the land to life Development Goals (SDGs) would suggest that
below water, energy, climate and of course pov- for developing countries to expand levels of
erty and gender discrimination, they are universal production and consumption to achieve these
in their appeal and comprehensive in their nature, goals will require that richer countries need to
driven by an elusive quest for development for all free up ecological space for growth in the global
that ‘leaves no one behind’. At the same time, the South to meet basic needs. As Daly suggests,
development community involved in the SDGs ‘The usual objection to limiting growth, made
has been surprisingly silent about the causes of in the name of the poor…. Defends growth as
poverty and unsustainability and therefore the an alternative to sharing which is unrealistic if
means by which the SDGs will address them. not inconceivable’ (1977: 107). Below I discuss
Without critical attention to the ways in which the the politics of redistribution that flow from this
global economic model is implicated in exacer- vision through proposals for a universal basic
bating these issues, there is little prospect that the income scheme, ecological taxation, global
SDGs will be any more successful than the MDG ‘Robin hood taxes’ and the like. But proposals
Millennium Developmental Goals that preceded such as these have implications for a financial
them. If this prior conversation about the sustain- sector geared towards serving the needs of
ability of the global economy itself, including the elites, despite efforts to support micro-finance
role of finance, is bracketed, progressive change as well as more pernicious efforts to extend
is unlikely. On the United Nations 75th anniver- credit to poorer families on unpayable terms
sary, (some) people around the world were asked resulting in spiralling indebtedness. If creating
to share their vision of ‘The World We Want’. new sites of accumulation as an end in itself
But the ‘we’ was poorly defined and it seemed and fuelling mass consumerism are no longer
only some versions were up for grabs and certain tenable in a world seeking to live within limits
answers to that question, those incompatible with rather than push against and beyond them, we
liberal capitalism, were off limits. need to rethink the role of finance and the insti-
Nevertheless, the universal and interrelated tutions which oversee it such as banks, pension
nature of the SDGs in many ways provides a funds and investment firms, as well as multilat-
potential opportunity to advance a more globally eral development banks.
20 P. Newell
Including the need for reform of core principles the role of finance specifically, the work of UNEP
such as ‘limited liability’ which protects direc- and others on ‘The financial system we need’
tors from the consequences of their investment which looks at the full range of levers and tools to
decisions on society and the environment, and use in moving towards a more sustainability
changes to incentive systems. For example, 90% economy offers a useful starting point (UNEP
of companies directly reward executives for pro- 2015).
duction or reserves increases in some shape or Social control of finance for the common good
form, a figure virtually unchanged since 2017. implies shifts in the purposes and timeframes
These targets encourage a focus on size over within which finance operates. This would imply
shareholder value, exacerbating stranding risks, a greater role for ‘patient capital’ that secures a
whereas we need to replace direct production tar- return over a longer time frame. There are pro-
gets with value-focused metrics (Carbon Tracker posals for a Green Investment Bank and Green
2020). investment bonds going beyond the limited ver-
Thirdly and most ambitiously, it demands a sions of these that have existed to date. Finance
greater degree of ‘re-commoning’. This implies for the common good also includes green lending
not just bringing back the state into the regulation along the lines of proposals for a Green New
of finance for the common good, as argued above, Deal proposed by Greens in 2008 (GND 2008) in
but also more profoundly strengthening commu- light of the financial crisis and given new life in
nity control over resources through new models 2019. As originally conceived, this had two main
of ownership and profit-sharing (Newell 2019). components. First, it outlines a structural trans-
This includes re-commoning through public and formation of the regulation of national and inter-
community ownership and social and solidarity national financial systems, and major changes to
economies (Amin 2009) that have flourished dur- taxation systems. And, second, it calls for a sus-
ing the Covid pandemic oriented as they are to tained programme to invest in and deploy energy
meeting social needs rather than wealth concen- conservation and renewable energies, coupled
tration. Finance for the common good establishes with effective demand management (GND 2008).
parameters and aligns and re-socialises finance The UN Secretary-General and the then Executive
by redirecting it towards the goals of a transition Director of the United Nations Environment
to a just and sustainable economy. There are Programme (UNEP), Achim Steiner (currently
many proposals about what the overall model administrator of UNDP) and a further twenty-one
might look like from doughnut economics UN organisations have also recently endorsed
(Raworth 2017), to sustainable consumption cor- this call.
ridors (Di Guilio and Fuchs 2014) and proposals Within countries, finance can be raised and
specific to tackling climate change such as ‘con- redistributed through a variety of means includ-
traction and convergence’ (GCI 2018) or the ing limits on maximum income, a Universal
‘greenhouse rights development framework’ Basic Income scheme and efforts to close tax
(GDR 2018). Taking the first of these, building loop holes and tax evasion strategies that con-
on the idea of ‘planetary boundaries’ Kate tinue to deny poorer states urgently needed
Raworth (2017) proposes ‘doughnut economics’ finance to address a range of development chal-
as a way of describing the safe social operating lenges. In the case of the former, the basic income
space for humanity. A new economic model scheme, long supported by Greens, has gained
needs to address the ‘doughnut’, with a ‘hole’ of support from a range of political quarters in
critical human deprivation in the middle below a recent years (Andersson 2009; Standing 2008;
social foundation representing the minimum Raventos 2005). Its ambition is to enable a per-
amount of well-being for humanity, an ecological manent rather than temporary exit from poverty
ceiling in an outer ring representing planetary and social exclusion. It implies an overhaul of the
resource limits, and between both of these is a current benefits system whereby every woman,
safe and just space for humanity. With respect to man and child would receive a weekly payment
22 P. Newell
as of right that is not means-tested and sufficient economies and support a just transition to a low-
to cover basic needs. There are many versions of carbon economy. But as well as relief of current
this. But in essence a Citizen’s Basic Income is debts to free up expenditure for post-Covid
an unconditional, automatic and non-recovery and social protection, there is also the
withdrawable payment to each individual as a issue of historical debts. Environmentalists often
right of citizenship (CIT 2017; Torry 2013; van refer to ecological debt incurred by richer coun-
Parijs 2004). It is aimed at encouraging flexible tries overusing their share of the global commons
working patterns (across forms of paid, unpaid, through colonialism, extractivism and institu-
voluntary and domestic work), providing finan- tionalised unequal exchange within the global
cial independence and reducing poverty and economy (Simms 2005). More specifically in the
unemployment. Though wealthier citizens would climate change context, there is ever more
be entitled to the scheme, they would pay more emphasis on loss and damage and compensation
into it in the first place through tax. It also helps for vulnerable countries in the frontline of cli-
to reduce personal indebtedness which unscrupu- mate impacts but who have contributed very little
lous financial actors such as pay-day loan compa- to the problem (Roberts and Huq 2015; Roberts
nies and sub-prime lenders thrive on. and Pelling 2019). This means not just enabling
Proposals to address tax meanwhile might sustainability through redeploying finance, but
include closing tax havens, tax loops and adopt- also paying off accumulated debts. For many
ing common global measures for country by poorer and postcolonial countries in the global
country reporting and collecting tax to avoid eva- South, this will have to be part of any new global
sion and avoidance. According to the Tax Justice deal on finance for sustainable development.
Network, tax havens are estimated to shelter $12
or $13 trillion in private deposits, depriving gov-
ernments of $250 billion a year in revenues. This 3 Conclusions
must include measures to address transfer pricing
which result in developing countries losing In this chapter I have suggested the SDGs pro-
$160 in tax revenues each year (Jenkins and vide potential levers to redirect finance towards
Newell 2013), as well support for ‘publish what the imperative of sustainability. For example,
you pay’ initiatives such as the Extractive goals 17.1 on improving domestic revenue col-
Industries Transparency Initiative which encour- lection and taxation and 17.3 on mobilising
age the full disclosure of profits made from financial resources underscore the need to raise,
resource exploitation. Progressive taxation on the redirect and govern finance more effectively. But
other hand would target pollution and not labour. there also needs to be a power shift in who con-
Ecological taxation follows the logic of taxing trols finance and the purposes for which it is
more what you want less of (pollution) and tax- deployed for the goals to realise this potential,
ing less what you want more of (labour). In many combined with a clearer vision of the appropriate
cases this would imply higher levels of corporate relationship between finance and sustainability.
taxation, but also preferential tax rates for local The Covid-19 pandemic has shown that when the
businesses and social enterprises. Micro-credit will is there, governments can use their power to
schemes and other forms of affordable finance mobilise vast amounts of capital for the welfare
for micro and small-scale enterprise are other of their citizens, re-purpose industries through
elements that can help to build a sustainable industrial conversation and intervene to protect
economy. the most vulnerable groups in society. Though
Then there is the question of debt and its we need to be cautious about whether state power
relief. Volz et al. (2020) propose the ‘Debt Relief could be used in this way to address the climate
for Green and Inclusive Recovery Initiative’ on a and ecological crisis, the experience of the pan-
global scale to free up resources to support recov- demic has shown what activist and intervention-
eries in a sustainable way, boost the resilience of ist states are capable of and demonstrated that
2 Finance for the Common Good: Re-Thinking the Relationship between Finance, Poverty… 23
there is strong public support to prioritise societal Daly, H. (1977) ‘The Steady-State Economy: What, Why
and How?’, in D. Pirages, (ed.), The Sustainable
(and by extension environmental) wellbeing over Society: Implications for Limited Growth, New York
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economy needs to recognise then that the real Consequences for the Global Environment,
Cambridge, MA: MIT Press.
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24 P. Newell
A. S. Antonarakis
Department of Geography & Sussex Sustainability Financial crises · Great Stagnation ·
Research Programme, University of Sussex, Environmental sustainability · Air pollution ·
Falmer, Brighton, UK Biodiversity · Forests
e-mail: A.Antonarakis@sussex.ac.uk
Dauvergne (1999) pointed to the fact that the cri- In contrast to the Asian Crisis, the epicentre of
sis triggered simultaneously both negative and the Global Financial Crisis of 2008/09 was in
positive environmental impacts. Air and lead pol- advanced economies in the very core of the global
lution decreased as there was a significant economy. Studying the impact of this crisis on
decrease in industrial production and vehicle use, CO2 emissions, Peters et al. (2012) found that the
yet an increase in untreated factories waste reduction in emissions was more short-lived than
impacted negatively on water quality. In general, in any other financial crisis in recent economic
the crisis slowed investments in newer and history. The 5.9% rebound in CO2 emissions,
cleaner technologies and firms prioritised cost from fossil-fuel combustion and cement produc-
reduction over health and environmental stan- tion, in 2010, not only offset the 1.4% decrease in
dards. Furthermore, the need to increase exports 2009 but it was also the highest total annual
to address the balance of payment crisis led to an growth ever recorded. The drivers for this rapid
environmentally detrimental expansion in agri- CO2 emissions rebound included the quick return
culture and fisheries, and a strong push for the of strong growth in emerging economies (see,
development of large plantations (e.g. palm tree), Antoniades 2017), a quick return to emissions
a significant deforestation driver in the region. growth in developed economies as a result of the
Furthermore, higher diesel prices and urban to unprecedented quantitative easing monetary poli-
rural migration led to different fishing practices cies, and an increase in the fossil-fuel intensity of
that added further pressures on local fish supplies the world economy, partly due to the rapid easing
(see also Rosado et al., this volume), and eco- of energy prices that relieved pressure on energy
nomic hardship increased the pressures on endan- consumption (Peters et al. 2012).
gered animals and national parks. Botetzagias et al. (2018) have assessed the
Siddiqi (2000) also analysed the significant impact of the Global Financial Crisis in Europe
slowdown in the automotive, construction, manu- on a wide range of environmental quality (GHG
facturing, metal production and transportation sec- emissions, ozone pollution exposure, waste gen-
tors, with resulting decrease in CO2 emissions. Yet, erated, recycling, energy intensity, renewable
these benefits were counter-balanced by deferment energy, forested area) and environmental policy
of needed clean energy investments. He also points (change in infringement cases, environmental
to a negative impact of the crisis on forests mostly expenditure, environmental taxes) indicators.
due to pressures for firewood, timber, and agricul- They found no evidence that the economic crisis
tural land. This analysis is confirmed by Elliott had a detrimental effect on either environmental
(2011), who studied the effect of both the 1997 quality or environmental policies. Rather they
and 2008 financial crises in East Asia. She found observed a rather positive effect for Eurozone
that any positive impacts from the crises were countries and a non-significant one for non-
short-lived, while negative impacts endured. The Eurozone countries. As the authors note this may
latter include pressures for ‘further deforestation, indicate that in the case of countries ‘where pub-
agricultural expansion at the expense of water and lic environmental concern and national policy
soil quality, and lax enforcement of pollution regu- making are more and better established, there is
lations’ (ibid. 179). Moreover, the priority for both less room for watering down environmental per-
government and the private sector in the post-crisis formance and protection in the face of an eco-
environment was investments that would generate nomic downturn’ (ibid., 44). Yet, combining the
‘quick returns to compensate for losses rather than impact of the crisis with the impact of a Troika
pursuing longer-term environmental and financial Programme (TP) (i.e. a conditionality-based
sustainability’ (ibid. 180). In contrast, Kasa and financial support programme by the IMF, ECB,
Næss (2005) illustrate the critical role that non- European Commission) leads to different results.
governmental organisations can play in favour of Eurozone countries with no TP experience an
environmental protections in conditions of finan- increase in environmental spending and taxes,
cial crises. while countries in TP experience a decrease.
3 Financial Crises, Environment and Transition 29
Similarly, in non-Eurozone EU countries they Yet, it is indicative that to reach the Paris tar-
observe a rather better environmental quality yet gets, decreases of similar magnitudes (1–2
more environmental-law infringement cases, GtCO2) should continue to take place annually
while in non-Eurozone countries in TP the crisis throughout the 2020s; an indication of the magni-
loses its positive effect on environmental quality, tude of the challenge that we currently face (Le
and results in less environmental spending & Quéré et al. 2021; see also IEA 2020). At the
taxes. These results point to the detrimental effect same time, based on past experience, this fall in
that excessive austerity can have on environmen- air pollutant emissions should be expected to be
tal quality and policies, even in advanced econo- short-lived and may be overshadowed by a post-
mies. Case-studies on specific European countries crisis bounce-back of emissions. Furthermore, as
came to confirm some of these conclusions, and discussed above, the resulting increased eco-
to reaffirm the short vs. long implications dis- nomic hardship and inequality should be expected
cussed in the context of the Asian Crisis (see for to trigger environmentally adverse practices and
instance, Lekakis and Kousis 2013; Monteiro impacts (e.g. on forests, biodiversity, agriculture,
et al. 2018; Putkuri et al. 2014). consumer preferences, environmental protec-
Anbumozhi and Bauer (2010) have examined tion). If these risks will be mediated by a just and
the environmental impact of the Global Financial inclusive global green new deal remains to be
Crisis in Asia. Their findings point to similar seen. Currently, as of March 2021, 86 countries
dynamics to those observed in the Asian Crisis have sought Covid-19 related financial support
too. A fall in (global) demand and trade led to a from the International Monetary Fund (IMF), an
fall in energy use that on its turn led to short term historically unprecedented number of countries
reductions in air pollution and pressure on water in such a short period of time. This adverse eco-
resources. Yet, at the same time investments in nomic impact of the crisis in developing coun-
energy and environment were slowed (which, for tries could morph into new poverty, education
instance, impacts negatively on the contamina- and inequality ‘traps’ (Antoniades and
tion of rivers and water quality) and both firms Antonarakis 2020; World Bank 2020), that could
and households spent less on energy efficiency exacerbate environmental degradation dynamics
measures, green technology and equipment (for globally. Current international spending on
shifts in consumption patterns see also Jalles recovery from the Covid-19 pandemic is falling
2020). Furthermore, changes in land use put new short on environmental sustainability, with only
pressure on forests for firewood, timber, or agri- $341 bn or 18% of rescue and recovery funding
culture purposes (see also Elliott 2011). in the largest 50 economies considered ‘green’,
With regard to the environmental impact of including investments in infrastructure, transport,
the Covid-19 triggered economic crisis, it is still renewables, R&D, ecosystem regeneration and
early to draw any firm conclusions (recent litera- reforestation (O’Callaghan and Murdock 2021).
ture reviews include: Shakil et al. 2020; Rume, To conclude, the relationship between finan-
2020, EEA 2020). The government-imposed cial crises and the environment is not clear cut.
lockdowns and shut down of economic activity Financial crises give raise to diverse and many
led to a historically unprecedented fall in energy times opposing dynamics. For instance, the
use and greenhouse gas emissions—airplanes reduction of economic activity may ease the pres-
grounded, transportation frozen, trade slowed sure on available water resources with potential
down, many firms and factories closed. Led by beneficial effects for water environment, but at
the reductions to ground transport, power require- the same time the adverse change in economic
ments, industry and aviation (Le Quéré et al. conditions for firms and households may result in
2020), the decrease in global fossil CO2 emis- more untreated waste dumped in rivers and seas,
sions in 2020 is estimated at 2.6 GtCO2, an annual with exactly the opposite results. Similarly,
decrease that has never been observed before (see reverse migration from urban centres to rural
Le Quéré et al. 2021; Lenzen et al., 2020). areas may alleviate some of the multiple unsus-
30 A. Antoniades and A. S. Antonarakis
tainable patterns and implications related to the environmental impact of the crises is materi-
excessive urbanisation. Yet, at the same time, alised across a large number of environment-
these movements may have negative conse- related domains such as air, water, forests,
quences related to agriculture expansion, log- biodiversity, agriculture, energy use, climate-
ging, forestry, or fishing (e.g. see Dauvergne change, environmental investment and R&D, and
1999; Elliott 2011; Rosado et al., this volume; environmental protection. Capturing and analys-
Shepherd et al., this volume). ing the interaction and knock-on effects between
these domains is challenging (and in many cases
data are scarce, outdated, or non-existent). For
2.3 he Dynamic Relationship
T instance, air pollution (especially Sulphur
between Financial Crises Dioxide and Nitrogen Oxides emissions) contrib-
and Environment utes to acid deposition and eutrophication that
impact negative on soil and water quality, with a
Building on the above findings we present the wide range of pervasive negative effects ‘on
key dimensions determining the environmental aquatic ecosystems in rivers and lakes and dam-
impact dynamics of financial crises in the flow age to forests, crops and other vegetation’, as
chart in Fig. 3.1. Financial crises can be sover- well as subsequent decreases in biodiversity and
eign debt, monetary, or banking crises (Laeven ‘changes in species composition and dominance,
and Valencia 2018), and can be local, regional or and toxicity effects’ (EEA 2018; see Weiskopf
global in scale. The context in which each crisis et al. 2020). This diverse temporality of effects
takes place also varies, and this can exacerbate or and consequences across different environmental
soften the impact of the crisis. In environmental domains and actors is a key characteristic of the
terms, financial crises have both positive and neg- environmental effects of crises. Relatedly, exist-
ative effects, and these effects extend and vary ing case-study evidence suggests that any benefi-
across different environmental domains, eco- cial environmental impacts (especially on air and
nomic sectors and industries. Furthermore, the water quality) are short-lived. The main reason is
effects could be immediate and only last during the gradual return of economic activity after the
the years of crisis (or part of it), but could also be break-out of the crisis. But other reasons, such as
lagged and last beyond the end of the crisis. environmentally adverse shifts in firm and house-
Financial crises solicit responses by governments hold practices may also play an important role.
(e.g. shifting of priorities, policy and resources) That is why, in many crisis episodes, emissions
that directly feed into the impact of the crises and return to their pre-crises levels well before the
their environmental effects. end of the crisis period, and many times despite
Figure 3.1 makes clear that the interplay the fact that the involved economies are growing
between financial crises and environment is a at a slower pace (Pacca et al. 2020).
complex one. Beyond triggering opposing Furthermore, the nature of domestic struc-
dynamics, each financial crisis episode is charac- tures, institutional arrangements and available
terised by a large number of idiosyncratic vari- resources is an important intervening variable in
ables, including the nature of the financial crisis, the environmental impact of financial crises. For
its socio-political and ecological contexts and the instance, countries with stronger environmental
global politico-economic environment in which protection legislation, and better and well-
it takes place. The degree of resilience built in the resourced environmental protection mechanisms
affected economic, social and environmental sys- are in better place to reduce, neutralise or reverse
tems is also an important contextual variable (e.g. the adverse environmental implications of crises.
existence of automatic fiscal stabilisers, liquidity Reversely, the adverse environmental effects of
requirements in the banking sector, environmen- crises are exacerbated by the weak state capacity
tal legislation and enforcement, disaster pre- and limited resources in many low- and middle-
paredness, ecosystem resilience). Furthermore, income countries. In a similar manner, excessive
3 Financial Crises, Environment and Transition 31
CONTEXT
Global/regional economic condions
Environmental condions/constaints
Degree of in-build resilience
IMPACT
Posive Negave
POLICY RESPONSE
Fig. 3.1 Flow Chart illustrating the dynamics between impacts, the temporal effects of these environmental
financial crises and environmental impacts, including the impacts, the resources available to tackle the shock, and
spatial scale and type of crisis, the types of environmental finally the policy response
economic hardship and austerity policies linkedboundaries. This have given rise to a new post-
to international economic adjustment pro- growth research paradigm (e.g. Jackson, 2016;
grammes, may not only prolong the economic Kallis 2018). Despite the diversity of approaches,
crisis and the post-crisis socio-economic scar, but
common ground here is that if we are to reach a
can also exacerbate the environmental impact ofsustainable path on the planet, economic growth
the crises, locking countries into lower environ-
rates (and the corresponding energy and finite
mental paths or even in environmental traps. resources use and waste generation) should slow
down. The experience from financial crises tell us
that not all modes of economic slowdown lead to
2.4 From Financial Crises environmental improvements. Yet, financial cri-
to the Great Stagnation ses, as ‘shock events’, may not be well-placed to
map and understand the complex economy-
The intensification of climate change and its environment-poverty interaction that will emerge
impact over the last decades have thrown into from a slower-growth economic regime (see for
sharp relief the urgent need to move away from instance the critique on this in Hickel 2020). A
an economic model that is based on ever- number of macroeconomic modelling and simu-
increased growth rates, respecting planetary lation studies have attempted to fill this gap (see
32 A. Antoniades and A. S. Antonarakis
Victor 2011; Jackson and Victor, 2015; Hardt and it is the closest to a real world ‘experiment’ that
O’Neill 2017; Barrett 2018). Yet, although these we can get.
studies avoid a ‘shock bias’, they are limited in In the next section we shift our focus on
their capacity to model a complex, multifaceted, empirically assessing the impact of financial cri-
emergent social universe (Cantone et al. 2021). ses and the Great Stagnation on specific environ-
To address these limitations in the existing lit- mental domains. Our analysis and findings draw
erature we use the period of Great Stagnation as from a set of studies that we conducted at the
a real world ‘experiment. Since the Great ‘Financial Crises and Environmental
Financial Crisis of 2008/9 we have witnessed a Sustainability’ (FCES) unit of the Sussex
slow and fragile economic recovery. Growth Sustainability Research Programme.
rates have remained low and below the historical
trend (see Fig. 3.2 below), even with very low
interest rates and unprecedented liquidity support 3 inancial Crises & Great
F
by Central Banks. This below-trend growth has Stagnation: Empirical
come off the back of the Global Financial Crisis, Evidence on Air Quality,
acquiring characteristics of a ‘new normal’ Biodiversity, and Forests
(El-Erian 2009), defined by Mervyn King (2019)
as the period of ‘Great Stagnation’. As Fig. 3.2 Case-study evidence allow us to map, understand
shows, the rupture in GDP trend is observed in and analyse the complex processes that are trig-
both advanced and emerging economies. gered by financial crises locally or regionally.
Therefore, this period of ‘Great Stagnation’ Yet, at the same time it is important to develop a
offers a real-world case-study to examine the more macroscopic perspective on the environ-
impact of prolonged slower growth rates on the mental impact of the crises that would allow us to
natural environment. The use of Great Stagnation examine how this impact may change over differ-
as a case-study is not without its weaknesses, but ent time-periods, to compare the impact of differ-
8 GFC
Shock
4
Real GDP Growth (%)
World
2 G20 Emerging
G7
-2
-4
Fig. 3.2 Real GDP growth (annual percentage change) from 1990–2019 (Cantone et al. 2021). The two regression
lines represent the World GDP growth in periods 1990-2008 and then 2010–2019
3 Financial Crises, Environment and Transition 33
ent crises, to test whether case-study evidence The break-out of financial crises positively
applies to broader contexts, and to map any impact air quality, as indicated by the case-
broader environmental patterns and regularities studies mentioned in the previous sections.
emerging across financial crisis episodes that Furthermore, the intensity of the economic slow-
may add new information on their drivers and down is a key driver of the magnitude of the
determinants. To contribute to this aim, we pres- impact. In particular, the break-out of financial
ent evidence that is based on the statistical analy- crises is associated with reductions in CO2, SO2
sis of a large number of financial crises across the and NOx emissions, while when a crisis is accom-
globe over the period 1970s to 2010s. panied by an output loss (i.e. deviation of actual
Furthermore, as mentioned above, we extend GDP from its trend; see, Laeven and Valencia
our analysis on the environmental impact of 2018), the reduction in the above emissions is
financial crises, by examining what happened to much stronger and extends to particle emissions
key environmental indicators during the Great (PM2.5) that are especially dangerous for human
Stagnation. This is a period when a great number health (Fig. 3.3).
of systemically important economies are growing Yet, the beneficial effect of these crisis-driven
at slower rates in comparison to historical trend economic slowdowns on air pollution is short-
(see Fig. 3.2). Thus, this is not a period of ‘finan- lived. According to our estimates not only the
cial crisis’ as such—it has more enduring charac- beneficial effect fades away by the second year
teristics that point to a ‘new normal’. Examining after the break-out of a crisis, but also in the
environmental dynamics during this period can medium-term appears to increase PM2.5 emis-
add new insights on the potential implications of sions (see Fig. 3.4). In particular, in our model
a slower economic growth regime, and how the the positive impact on CO2 emissions disappear
transition to such a regime should be managed to the year after the breakout of crisis, whereas for
secure sustainability. SO2, NOx and PM2.5 emissions the positive impact
We present our findings below organised into disappears the second year after the break-out of
three categories: atmospheric emissions, forests a crisis. It is worth noticing here that this happens
and deforestation, and biodiversity. regardless of whether the involved countries con-
tinue to be in a financial crisis or not (more than
55% of crises in our dataset have a duration of 3
3.1 Atmospheric Emissions or more years). Thus, in most cases the financial
crises outlive the short-term positive impact that
3.1.1 F inancial Crises during their break-out had on air quality. Equally impor-
the Period 1970–2015 tant, the only pollutant that we find consistent
We have used a panel data approach to explore evidence for a medium-term effect is for PM2.5;
the relationship between financial crises and air but as mentioned above the impact is adverse for
pollutant emissions in 419 financial crisis epi- air quality. We find that 4 years after the break-
sodes (Laeven and Valencia 2018) in more than out of a crisis and up to year 10 there are increases
150 countries over the period 1970–2014 (see in PM2.5 emissions between 0.9 and 1.8%.
Pacca et al. 2020). In particular we examined the We also examined whether the environmen-
relationship between financial crises and Carbon tal impact of financial crises is contingent to the
Dioxide (CO2), Sulphur Dioxide (SO2), Nitrogen countries income-level, using the World Bank
Oxides (NOx) and Particulate Matter (PM2.5). We classification of countries in four groups accord-
used the Generalized Method of Moments ing to the level of their Gross National Income:
(GMM) specification to estimate short-term high-income, upper-middle income, lower-
effects and the Impulse Response Function to middle income and low income. We find that the
estimate medium-term effects (see Pacca et al. impact of economic crises on air pollutant emis-
2020 for details). Our main findings are as sions is contingent on the level of income and
follows: the broader economic structure of each country.
34 A. Antoniades and A. S. Antonarakis
Es
mated short-term impact of financial crises on air
pollutants (percentage points)
Fig. 3.3 Estimated short-term impact of financial crises on air pollutants (percentage points)
Years after the breakout of crisis (estimates for post-crisis 10 year horizon)
0
0 1 2 3 4 5 6 7 8 9 10
-1
-2
-3
-4
CO2 SO2 NOx PM2.5
For instance, while financial crises in high We have also tried to estimate the impact of the
income countries are accompanied by higher- financial crises on atmospheric emissions not in
than-average reductions in CO2, SO2 and NOx terms of changes in physical tonnage but in terms
emissions, we find no impact on any of the pol- of their monetary damage (Antoniades,
lutant emissions in low income countries (see Antonarakis, Widiarto, 2020). In particular, we
Fig. 3.5). have examined the relationship between financial
3 Financial Crises, Environment and Transition 35
High Income Upper Middle Income Lower Middle Income Low Income
crises, and Particulate Emission Damage and pollution. The average impact at global level is
Carbon Dioxide Damage.2 The aim here is to esti- 0.16% of gross national income. Yet, again, this
mate the adverse societal effects of atmospheric effect is different across different income groups.
emissions in periods of financial crises (see also Low-income countries are those most severely
Mohan et al. 2021). For this study we utilised a affected (0.37%), followed by lower-middle
generalized least square panel data econometric income (0.13%) and upper-middle income coun-
modelling, aiming to assess changes for each year tries (0.06%). We find no effect in high-income
of all financial crises during 1980–2015 (ibid.) countries. These findings reveal to some degree
We find that financial crises lead to significant the danger posed on human lives from shifting
increases in particulate emission damage, mea- practices and pollution patterns during times of
sured as foregone labour income due to prema- crises, and their unequal effects across developed
ture death from exposure to particulate matter and developing countries.
Finally, we examined whether the impact of
financial crises on air quality has changed since
The respective definitions according to the World Bank
2
of the globalisation of economic production, income countries. This may relate both to global
increased trade and international shipping, and efforts to increase awareness of the deadly impli-
broader global economic integration. Yet, these cations of this type of air pollution, but also to
findings point also to the difference that con- concerted policy efforts in specific countries, for
certed policy intervention and technological instance in China (Zhang et al. 2019).
advancements can make above and beyond any
economic slowdown effects. For instance, the
fact that at global level, we do not observe any 3.2 Forests and Deforestation
crisis impact on SO2 emissions after the 1990s
must relate at least partially to the significant 3.2.1 F inancial Crises during
decrease in SO2 emissions that was achieved by the Period 1980–2015
policy action on coal and fuel oils in Europe and Existing case studies on the effects of financial
North America, and improved abatement tech- crises on forest cover and deforestation have
nologies such as desulphurization systems. For found contradictory results as stated in Section 2
instance, in the 33 countries that participate in the above. For example, forest protection increased
European Environmental Agency, emissions of and environmentally damaging activities
sulphur oxides (SOX) have decreased by 74% decreased in the Brazilian crises of 1998-2000
between 1990 and 2011 (see EEA 2013; for (Kasa and Næss 2005), while in South East Asia
uneven global trends see Aas et al. 2019). forest management and conservation decreased
with increases in agricultural production
3.1.2 The Great Stagnation (Dauvergne 1999; Siddiqi 2000; Pagiola 2001),
To examine the trend of atmospheric emissions and in Greece illegal logging increased during
during the Great Stagnation we used a dynamic the 2008 crisis (Lekakis and Kousis 2013).
panel data model with a GMM specification, In recent work (Antonarakis et al. in prep) we
using 2010 as the first year of Great Stagnation examine the effects of financial crises on forests
(see Fig. 3.2). We adopt a trend analysis approach and deforestation against the Global Forest Watch
aiming to examine whether there is a change in dataset available from 2001. These datasets were
emission trends in the periods before and after collected at the national scale for over 170 coun-
the Global Financial Crisis. This analysis does tries with the impacts of financial crises tested
not aim to establish causality but empirically to using the Generalized Method of Moments
examine whether the ‘new normal’ in the global (GMM). Here, preliminary results show that at
economy is associated with changes in CO2 and the global level, financial crises are associated
PM2.5 emission trends (Cantone, Antonarakis, with reductions in deforestation rates (36 per-
Antoniades, 2021). We find no statistically signif- centage points). These results support country-
icant evidence for changes in emissions trends at level literature on decreases in deforestation
a global level, yet we observe statistically signifi- during a financial crisis (Dauvergne 1999; Elliott
cant shifts at income-level. With regard to CO2 2011). At income groups, the largest decreases in
emissions, the period of Great Stagnation is asso- deforestation rates occurred in low-income coun-
ciated with increases in low-income countries tries compared to high-income countries (51 p.p.
(6.9%) and decreases in high-income countries vs 18 p.p. respectively). The reasons for this may
(2.5%) that are mostly driven by Europe (1.8%). be related to drivers of deforestation, where in
This is not surprising as the Great Stagnation has higher income countries are dominated by for-
been driven by developments in high-income estry, and in lower income countries are domi-
countries, while low-income countries have been nated by shifting and commodity agriculture
the group least affected, maintaining relatively (Curtis et al. 2018). Therefore, declines in com-
high growth rates before the Covid-19 pandemic. modity crops such as cattle, cocoa, coffee, soy-
On the other hand, the Great Stagnation is asso- bean, and oil palm during financial crises may be
ciated with decreases in PM2.5 in middle-income linked to falling deforestation rates (see
countries, more pronounced in upper-middle Antonarakis et al. in prep).
3 Financial Crises, Environment and Transition 37
We have also examined the effect of financial gets from 2010, is difficult to find annually with
crises from 1980–2014 on two forest related indi- consistent national reporting. We used a general-
cators, forest rents and net forest land CO2 emis- ized least square panel data approach to investi-
sions, using a generalized least square panel data gate the effect of financial crises from 1980-2014
econometric model (see Antoniades et al. 2020). on Terrestrial Protected Areas obtained from the
Forest rents (in % of GDP) are roundwood harvest Environmental Performance Index—Yale
times the product of average prices and a region- (Antoniades et al. 2020). This metric is calcu-
specific rental rate. Net forest land emissions refer lated as the proportion of each biome in a country
to changes in atmospheric GHG emissions attribut- that lies within a protected area, an important
able to forest and land-use change activities. At the indicator related to natural resources exploitation
global level we found no effect between financial and biodiversity protection. We find that financial
crises and these two forest indicators. Financial cri- crises are associated with a reduction in terres-
ses, though, are associated with an increase in net trial protected areas globally (−0.57%). This
forest land CO2 emissions in low- and high-income reduction is pronounced for upper-middle income
countries by 0.818 and 2.479 terragrams, respec- countries, at 1.05%, and low-income countries, at
tively. Reasons for this worsening picture in forest 0.85%, with no effect in high-income countries.
land emissions during financial crises may be due
to an increase in forest product exports from low- 3.3.2 The Great Stagnation
income countries (Mills Busa 2013), to increases in On testing the effects of the Great Stagnation
large scale forestry operations in high-income period on biodiversity, we expanded our indicators
countries. This effect on low-income countries is to include terrestrial protected areas, species pro-
matched by increases (0.8%) in forest rents. tection index, the species habitat index, fish stocks,
and marine protected areas (Cantone et al. 2021;
3.2.2 The Great Stagnation data used are from the Environmental Performance
We tested the effect of the Great Stagnation period Index-Yale). The species protection index mea-
on deforestation from the Global Forest Watch sures protected areas in relation to species distri-
using a panel data model with a GMM specifica- butions; the species habitat index measures
tion. In this case we found no significant global- changes in the suitable habitats of species provid-
level decreases in deforestation during the ing aggregate estimates of potential population
stagnation period, with only effects in upper- losses and extinction risk increases; fish stock sta-
middle income countries (−6.7%) and in Asia tus measures the percentage of a country’s total
(−13%). New initiatives since 2010 are committed catch that come from overexploited or collapsed
to halting deforestation and restore forests, such as taxa; and marine protected areas measures the per-
the Bonn Challenge, the New York Declaration on cent of a country’s Economic Exclusion Zone set
Forests, zero deforestation policies and more. The aside as a marine protected area.
lack of a significant effect on deforestation during Overall, at the global level, the great stagna-
this period suggests that the Great Stagnation may tion is negatively associated with all biodiversity
have delayed these international efforts as nations indicators except species habitat index (see
have increased land cover conversion and forest Fig. 3.6). Terrestrial protected areas decreased by
resources to support their economies. 3.7%, marine protected areas decreased by
22.8%, fish stocks decreased by 8.1%, and spe-
cies protection index decreased by 2.6%. Only
3.3 iodiversity
B the species habitat index saw a small increase
during this period by 0.055%. To better under-
3.3.1 Financial Crises during stand potential drivers behind these findings we
the Period 1980–2015 also examined the impact of Great Stagnation on
Biodiversity data, even though national reporting biodiversity indicators across income-groups and
has been solicited by the Aichi Biodiversity tar- continents.
38 A. Antoniades and A. S. Antonarakis
At income-level groupings, the Great a decrease in species protection index and fish
Stagnation is associated with negative effects on stocks in Africa (−1.8% and − 8.1% respec-
terrestrial protected areas in lower-middle, upper- tively), and a decrease in species protection index
middle- and high-income countries (−3.6%, and marine protected areas in Europe (−1.5%
−1.7%, −2.4% respectively), a negative effect on and − 37.2% respectively). Species habitat index
species protection index for lower-middle, upper- remains with a minor positive effect for all conti-
middle and high-income countries (−2.8%, nental groupings, Americas, Africa, Asia, Europe
−2.4%, −1.3% respectively), a minor but robust (not Oceania).
positive effect on species habitat index for lower- Concerning Terrestrial Protected Areas
middle, upper-middle and high-income countries (Fig. 3.6a), Lewis et al. (2019) also witnessed
(0.05%, 0.08%, 0.04% respectively), no signifi- that from 2010 terrestrial protected areas have
cant effect for fish stocks, and a negative impact not increased and subsequently are not on track
on marine protected areas for high-income coun- to meet the Aichi Biodiversity Target of 17% pro-
tries (−33.1%). tected areas globally. A reason for this has been
At continental-level groupings, the Great the slowing of new protected areas being set out
Stagnation is associated with a decrease in ter- by countries and the rapid removal of protected
restrial protected areas in the Americas (−1.4%), areas. This scaling back of protected areas, called
Fig. 3.6 Great stagnation impact on biodiversity indica- index and species habitat index. Panel B shows marine
tors at the Global level, at income groupings, and at conti- biodiversity indicators: Fish Stock Status and Marine
nental groupings. Panel A shows terrestrial biodiversity Protected Areas
indicators: terrestrial protected areas, species protection
3 Financial Crises, Environment and Transition 39
Protected Area Downgrading, Downsizing and in the way the species habitat index is measured.
Degazettement (or PADDD) is primarily caused Remote sensing is used to calculate the species
by industrial activities, energy projects and local habitat index based on natural growth of vegeta-
land pressures. Our regional groupings show that tion across space, yet any increases may not
the negative impacts are driven by the Americas, translate to effective conservation and protection
where PADD has affected Brazil’s protected area of species.
network (Pack et al. 2016) and with the USA hav-
ing the highest negative footprint in this area
between 2006-2016 (Lewis et al. 2019). 3.4 Summary of Findings
Decreases in terrestrial protected areas may also
be caused by post-GFC austerity policies or 3.4.1 Financial Crises
increasing financial distress which are adversely We have examined the influence of financial
related to environmental protection (Lekakis and crises on the environment for the period 1970 to
Kousis 2013; Botetzagias et al. 2018), or with an 2015. Overall, financial crises have a positive
expansion of commodity driven agriculture in (albeit short term) impact on air pollution,
middle-income countries (Marques et al. 2019). mixed impact on forests and deforestation and
Marine protected areas have seen a large negative impact on biodiversity. On air pollu-
decrease during the Great Stagnation, concen- tion, financial crises have an immediate benefi-
trated in high-income countries in Europe (See cial impact on CO2, SO2 and NOx, with an effect
Fig. 3.6b). This contradicts the UNEP-WCMC that ranges between 1.4 and 6.2 percentage
(2018) and Lewis et al. (2019) report of increases points. The reduction in air pollution is contin-
in marine protection globally from 2010–2017 of gent on the stage of economic development,
around 4% of the world’s oceans. Yet, Lewis with higher income countries experiencing the
et al. (2019) also state that the growth has pla- most comprehensive reductions in CO2, SO2
teaued since 2014, and the growth in marine pro- and NOx emissions. Yet, this beneficial effect
tection has disproportionately been in Asia and fades away within 2 years from the start of the
the Pacific. In Europe, along with a levelling-off crises, giving rise to renewed pollution that
effect after 2010, a reason may be that progress in neutralizes or even reverses positive gains made
designating Natura 2000 marine sites has been in the first years. Furthermore, we find that
much slower than terrestrial sites due to the lack despite the fall in pollutant emissions, there is
of detailed information on habitat and species an increase in the social damage caused by air
distributions that hampers the introduction of pollution during financial crises in developing
appropriate management (European Commission countries (especially low-income). On forests,
2018). On Fish Stocks, the large decreases in we find a beneficial effect of financial crises on
Africa (−8.1%) are matched by reports and evi- deforestation rates at a global level. At income-
dence of large-scale deterioration in the region level, the low-income countries have the largest
(McClanahan 2019; BBC 2018). The impacts of decrease in deforestation rates, but experience
the Great Stagnation on the Species Protection increases in net forest land use emissions and
Index are spread across most income groups and forest rents. On biodiversity, financial crises are
are concentrated in Africa (−1.3%) and Europe associated with a reduction in terrestrial pro-
(−1.5%) (see Fig. 3.6a). The results on the tected areas globally (−0.57%), with effects in
Species Habitat Index are small and positive upper-middle and low-income countries. This
across most income groups (except low-income) shows financial crises do not provide overall
and continents (except Oceania). These results reprieve for forests and biodiversity, with
suggest that species habitat destruction may be already worsening trends in the last decades
levelling off or improving, while protection for made similar or worse by financial crises since
species is decreasing. A reason for this could be the 1970s.
40 A. Antoniades and A. S. Antonarakis
these words,3 crises are critical in the sense that Antoniades, A., Widiarto, I. & Antonarakis, A.S. (2020).
Financial crises and the attainment of the SDGs: an
they are moments of decision. Until today we adjusted multidimensional poverty approach. Sustain
used these moments to impose ‘economic adjust- Sci 15, 1683–1698.
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unsustainability of our socio-environmental Analysed with a Minskyan Model’, Ecological
Economics. Elsevier, 146 (May 2017), pp. 228–239.
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offs between growth and the environment to coastline’. Available at: https://www.bbc.com/news/
focusing on the environment as the most impor- world-africa-46017359.
Botetzagias, I., Tsagkari, M. and Malesios, C. (2018) ‘Is
tant factor for sustainable growth and living. the “Troika” Bad for the Environment? An Analysis of
EU Countries’ Environmental Performance in Times
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input, Bernardo Cantone, Lucia Pacca, Indra Widiarto, mental quality: A spatial hedonic analysis. Regional
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From Crisis to Crisis: Conundrums
of Caribbean Existence 4
in the Global Political Economy
Kristina Hinds
ment measures such as the United Nations (UN) premise that space for Caribbean strategies
Human Development Index (HDI) in which remains limited by disciplinary practices that
most are classified as exhibiting high human lock Caribbean states in the global economy as
development and as upper income by the World sites of extraction, leisure or to be policed for
Bank (see Table 4.1). As a result of these decent their ‘tendencies to illegality’. Thus, the chap-
performances, several have graduated from ter asserts that a notable part of the region’s
access to concessionary financing (ECLAC problem in pursuing the SDGs is the struc-
2011, p. 7). Still, these measures are deceiving ture of the GPE. By the same token the SDGs
as Caribbean countries face deficits in provid- themselves are hamstrung by the structure of
ing equitable and dignified living conditions for the GPE.
their people. They are also heavily indebted,
with several having debt to GDP ratios exceed-
ing the international benchmark of 60% (CDB 2 efining Caribbean States,
D
2020, p. 21; CDB 2019, p. 20). What is more, Territories and SIDS
the region is heavily exposed to and reliant on
conditions in the GPE, leaving the Caribbean The Caribbean is a part of the world to which
vulnerable to external shocks and crises, which people can travel to play, to escape chilly climes,
are compounded by the annual threat of hur- and more recently, to escape COVID 19 lock-
ricanes and other natural disasters. So, despite downs. Pleasure, tropical fruits, rum, the people
faring well in development assessments these are all available for foreign enjoyment. These are
are islands of precarity, as are most Small locations of extraction, whether it is pleasure
Island Developing States (SIDS). that is being extracted or some commodity like
Therefore, despite their relative progress, sugar or oil. On the other side of this playground
the small “islandness” of Caribbean states and is risk and illegality where the region pushes the
territories leaves them with special challenges limits of permissibility. Just as pirates once pil-
within the GPE. These challenges pose prob- laged, today Caribbean people do so too, steal-
lems for them meeting the UN Sustainable ing tax revenues from wealthy states or selling
Development Goals (SDGs). Further, these passports at low cost (Hinds and Lorde 2018).
countries have experienced significant misfor- These alleged tendencies to illegality must be
tunes since the novel coronavirus (COVID 19) managed and disciplined by places of ‘serious-
pandemic destabilised the world. This chap- ness’, ‘organization’, and high-end technologi-
ter examines how existing in precarity and cal innovation. These places responsible for
bouncing from crisis to crisis has affected the managing the world are also the sources of
Caribbean. The chapter presents the contradic- Caribbean tourism.
tions of Caribbean approaches to development These tropes that juxtapose the Caribbean
that leave the region perpetually exposed and with the developed countries often define the
contradict the SDGs. Specifically, the contin- region. However, tropes are not true definitions.
ued focus across the region on tourism driven Although one could assert that all places that
growth and on earning revenue from heavily touch the Caribbean Sea constitute the
policed areas such as the offshore sector or cit- Caribbean, this chapter takes a more limited
izen investor programmes to fund attainment approach. The focus in this piece is on the
of the SDGs can place Caribbean states and islands that are geographically located in the
territories in a sustainability trap. Caribbean Caribbean Sea. The chapter also treats Belize,
countries need growth to fund work towards Guyana and Suriname, as Caribbean SIDS,
the SDGs but face precarious growth situa- despite Belize being located in Central America
tions reliant on sectors that may not align well and Guyana and Suriname in South America,
with the sustainability. The chapter offers the and despite them not being islands. When we
Table 4.1 HDI trends and World Bank income classificationa
HDI rank Human Development World Bank Income
Country 2000 2010 2014 2015 2017 2018 2019 2019 Classification 2019 Classification 2020
Bahamas 0.80 0.81 0.81 0.81 0.81 0.81 0.81 58 Very high High
Barbados 0.77 0.80 0.81 0.81 0.81 0.81 0.81 58 Very high High
Trinidad and Tobago 0.72 0.78 0.79 0.79 0.80 0.80 0.80 67 High High
Cuba 0.69 0.78 0.77 0.77 0.78 0.78 0.78 70 High Upper middle
Grenada .. 0.75 0.77 0.77 0.77 0.77 0.78 74 High Upper middle
Saint Kitts and .. 0.75 0.77 0.77 0.77 0.7 0.78 74 High High
Nevis
Antigua and .. 0.76 0.76 0.76 0.77 0.77 0.78 78 High High
Barbuda
Saint Lucia 0.70 0.73 0.74 0.75 0.76 0.76 0.76 86 High Upper middle
Dominican Republic 0.66 0.71 0.73 0.74 0.75 0.75 0.76 88 High Upper middle
Dominica 0.70 0.74 0.74 0.74 0.74 0.74 0.74 94 High Upper middle
Saint Vincent and 0.68 0.72 0.73 0.73 0.73 0.74 0.74 97 High Upper middle
the Grenadines
Suriname .. 0.71 0.74 0.74 0.73 0.73 0.74 97 High Upper middle
Jamaica 0.68 0.73 0.73 0.73 0.73 0.73 0.73 101 High Upper middle
Belize 0.64 0.70 0.71 0.71 0.71 0.71 0.72 110 High Upper middle
Guyana 0.62 0.65 0.67 0.67 0.68 0.68 0.68 122 Medium Upper middle
Haiti 0.44 0.47 0.49 0.50 0.51 0.51 0.51 170 Low Low
a
Adapted from UNDP (2020); World Bank (2021). This World Bank classification uses GNI per capita thus: low income—$1035 or less; lower middle-income—$1036 to $4045;
4 From Crisis to Crisis: Conundrums of Caribbean Existence in the Global Political Economy
region. For example, Haiti, though having pride environmentally sustainable and socially inclu-
of place for pioneering statehood in the face of sive expectations of the SDGs. Addressing pov-
racialised colonial opposition, remains one of the erty, unemployment, and the provision of social
most impoverished countries in the world. services across the region have all hinged on
Additionally, most Caribbean countries have sig- countries’ abilities to grow economically or to
nificant work to do in addressing poverty, hunger, access loans while manoeuvring crises. In
education, and health. The COVID 19 pandemic essence, the approach to development focuses on
has exacerbated these problems. the expectation of trickle-down effects from eco-
The ILO notes that 38% of businesses in nomic growth, combined with state efforts to
Barbados and 17% in Trinidad and Tobago ceased offer social provisions to address material well-
operations as of May 2020. It continues to note being. Cuba is perhaps the most notable excep-
that unemployment and under-employment tion to the economic growth focus. Nonetheless,
across the region negatively affected households even Cuba has increasingly pursued externally
surviving on less than minimum wage, increasing oriented growth focussed approaches, building a
the number of such households from 19.9% in competitive tourism industry post-Cold War
January 2020 to around 45.5% by April 2020. (Padilla and McElroy 2007).
This pandemic has also shown the severity of The regional obsession with growth and for-
food insecurity and agricultural deficiencies with eign exchange using tourism and other rent seek-
survey data showing that over a third of vulnera- ing activities such as the offshore /international
ble households reported experiencing hunger and business sector or citizen investor programmes
more than half saw harmful declines in their (CIPs) can contradict attainment of the SDGs.
nutrition levels (Garavito, Beuermann & Álvarez, Moreover, the region’s middle/high income pro-
2020 in ILO 2020, pp. 17, 29–30). The COVID file has locked most countries out of access to
19 pandemic has also worsened inequalities in concessionary financing (except for climate
access to education particularly considering financing) that could assist the region in attaining
unevenness in technology provision. Further, the the SDGs. However, these incompatibilities
negative consequences of COVID 19 on the between Caribbean approaches to development
achievement of goal 3, that seeks healthy lives and its difficulties in accessing financing raise
and well-being, cannot be denied in this region larger questions about fit between the SDGs and
plagued by non-communicable diseases. Indeed, the GPE. Although the SDGs offer useful aspira-
CARICOM states have the highest morbidity tions, they run counter to a global capitalist sys-
rates from NCDs in the Americas (Healthy tem that thrives on inequalities, environmental
Caribbean Coalition 2017) and NCDs increase degradation, and predatory competition. The
the morbidity of COVID 19. SDGs avoid the heart of problems in the GPE. In
Notwithstanding sustainable development this connection, the mode of integration of the
commitments, it is clear to any analyst of the Caribbean within the global economy becomes
region that the thrust of Caribbean development important to consider.
has been economic growth. Additionally, much
of the emphasis on growth has revolved around
finding viable ways of earning through the estab- 4 (Post-)Colonial Context
lishment of foreign exchange generating sectors, and Caribbean Integration
since these states need foreign exchange to pay in the Global Political
for imports and to service their external debts. Economy
So, Caribbean states tend to focus on SDG goals
8 (decent work and economic growth) and 9 The colonial history of the region gives texture to
(industry, innovation, and infrastructure). its integration in the global economy. Caribbean
However, the implementation of even these has countries were constructed predominantly on
been thinner than required to meet the broader plantation slave labour systems as locations of
50 K. Hinds
extraction for the metropolitan colonial centres access for their agricultural commodities with the
based on low value mono-crop production. The movement towards reciprocity in trade that
mono-crop nature of these colonies left them accompanied the establishment of the World
heavily reliant on imports and thus, very open to Trade Organisation. In response, Caribbean states
international trade. Little thought was given to have used creative strategies to traverse the global
the humanity of those enslaved across the economy, being unable to produce most products
Caribbean. Similarly, little thought was given to on the scale required for meaningful earnings
environmental implications of exploitative colo- from either agriculture or industrial commodity
nial activities which used the land and sea towards production.
the end of wealth accumulation of plantation If one considers the approaches that Caribbean
owners and their financiers. These colonies were states have pursued to fortify statehood, the
available to be stripped and deforested as needed emphasis on clientelist bargains combined with
for the construction of plantations pursuing com- foreign investment stands out as the dominant
mercial agriculture for export to the world’s met- approach during the twentieth century and loiters
ropolitan sites. into the present. Former British colonies in the
With the end of slavery in the nineteenth cen- region sought to reverse colonial neglect using
tury, the extractive system continued as did the patron-client approaches to provide employment,
neglect of the well-being of the formerly enslaved housing, access to education and contracts. States
majority populations. Only from the twentieth struck up a bargain that balanced labour demands
century did colonial officials across the Caribbean with capitalist profit-oriented agendas, courting
concentrate on the living conditions of the foreign investment in tourism, agriculture and,
region’s people, following a series of uprisings where relevant mining (e.g. Guyana, Trinidad
across the British Caribbean colonies in the and Tobago-oil, Jamaica -bauxite). Until the
1930s. Even the Caribbean states that were inde- 1980s, this system was propped up by preferen-
pendent by the early twentieth century, such as tial market access for Caribbean agricultural
Cuba and the Dominican Republic, faced extrac- products, accompanied by price supports and for-
tion by foreign investors that dominated their eign aid (Constant 2003, pp. 6–7). This snapshot
economies in the early twentieth century. Again, captures several analysts’ assessments of the
social improvements were secondary consider- patron-client relationships that have defined
ations. The history of extraction, limited social Caribbean governance and development strate-
emphasis, neglect of the environment and author- gies (D’Agostino 2003, p. 123; Hinds 2019,
itarianism influences the present. The global sys- pp. 69–70; Marshall 1998, pp. 64–65; Stone
tem of colonial conquest, expansion and 2013, pp. 67–70). This approach, so visible in the
exploitation has been essential to structuring the English-speaking parts of the region, does not
globalized world capitalist system and asymmet- fully hold across the board though. For instance,
rical power relations that enliven it today. the history of Haiti’s overtly authoritarian politi-
Developing countries, including Caribbean cal practices, quite notably under the Duvaliers
SIDS, have been crucial in building out this sys- from 1957 to 1986, directly contradicts the idea
tem and SIDS are among the most open econo- that there was any Haitian “populist-corporatist”
mies in the GPE because of these processes of bargain (Trouillot 2013). Moreover, the country’s
world building. current dependence on foreign aid and non-
Having attained independence, Caribbean governmental organisations that deliver core ser-
states are expected to fend for themselves, but vices, mark the relationship as quite different
they remain predominantly reliant on a single from those that typify the region (Reno 2003,
externally dependent economic sector. Caribbean pp. 443–444; Hinds 2019, p. 41).
states have also lost access to assistance available As for Caribbean territories, though affixed to
to them during the East-West Cold War stand off industrialised states, these entities exercise
and have lost much of the preferential market autonomy and are expected to be generally self-
4 From Crisis to Crisis: Conundrums of Caribbean Existence in the Global Political Economy 51
sustaining. The Puerto Rican model of develop- One analyst describes the strategies of SIDS
ment, important particularly during the as ‘pseudo-development’ approaches in which
mid-twentieth Century, illustrates an effort to they “…scramble to exploit one niche or oppor-
engender economic viability using investment tunity, then another, moving as nimbly as possi-
from the US mainland. This model, as innovated ble from one to the next, or from one crisis to the
by Sir Arthur Lewis’ so-called industrialization next, as one dries up and (hopefully) another
by invitation, was also tried across the Caribbean. presents itself” (Baldacchino 2014, p. para. 3).
The Puerto Rican focus on tourism, despite In essence, Caribbean states and territories tend
accounting for a far smaller share of GDP than to focus keenly on remaining viable within a
characterises most of the region (around 10%), global economy in which they are of limited sig-
also aligns with the wider Caribbean tourism nificance because they have tiny markets and
strategy (Croes and Rivera 2010). Further, the lack economies of scale. Ironically, their pursuit
responses by the US Federal Government to of the SDGs is contingent on their ability to
Puerto Rico during the global financial crisis and remain viable. Hence, these countries pursue the
following hurricane Irma, illustrate that this SDGs, to the extent that this pursuit is compati-
country too must navigate crises similarly to ble with their navigation of the GPE. Human
neighbouring independent states (Cortés 2018; development and income statuses of Caribbean
Bonilla 2020). The development and marketing states then, are not so much linked to sustainable
of tourism in the Netherlands Antilles also development as they are to the coloniality of
reflects the way in which these territories must operating within a global capitalist framework
find ways to support themselves and have pur- which opens specific spaces for them. What is
sued strategies akin to those of independent states more, Caribbean states have seen the costs of
in the region (Vanegas Sr and Croes 2003). We breaking with their placements within the world
can further extend this parallel to the British system. The 1980s US intervention in Grenada,
Virgin Islands, that have gained some notoriety the continued US embargo on Cuba, and the
for the development of their offshore financial Haitian experience after daring to seek indepen-
sectors, again as part of a strategy for viability dence in the highly racialised colonial era are
and for working within the spaces that the GPE among those that discipline Caribbean states.
offers tiny jurisdictions. Like Puerto Rico, these Caribbean states can move beyond their place-
jurisdictions and the US Virgin Islands have also ments as sites of extraction or playgrounds but at
taken advantage of tourism (Bresson and their peril. Therefore, they generally find ways to
Logossah 2011). work through available spaces, playing to their
In brief, Caribbean states and territories tend strengths within the GPE by using ‘pseudo-
to focus their strategies on staying afloat in ways development’ strategies that keep them awk-
that are more influenced by their integration in wardly afloat.
the GPE than they are by the SDGs or other sus-
tainability principles. Tourism has been the life
raft of economic viability drawing on fine weather 5 Caribbean Tourism
and the trope of the region and its people as and the SDGs
exotic. Where countries possess mineral wealth,
they extract this to their benefit. Otherwise, Tourism has been the pillar of most Caribbean
countries focus on ‘clever’ strategies that func- economies but its exposure to external demands,
tion within the gaps of permissibility in the GPE, tastes and shocks causes it to be a somewhat
invoking the trope of illegality (Baldacchino unstable pillar. During the twenty-first century
2014; Hinds and Lorde 2018). Here I refer to off- alone, Caribbean tourism has faced earning
shore/international business sectors and citizen slumps following the 9/11 terror attacks, during
investor programmes (CIPs) as noteworthy the 2008/2009 global financial crisis, and most
examples. dramatically during the COVID 19 pandemic.
52 K. Hinds
Still, the Caribbean is the most tourism intensive their coastal tourism properties with devastating
and tourism dependent region in the world, in economic repercussions, with a 1 m rise in sea
terms of the value of economic contribution that level (Scott et al. 2012, pp. 891, 895). However,
this single sector provides (Cannonier and Burke the guiding focus in Caribbean tourism has been
2019, p. 86; CTO 2020, p. vii). marketability and profitability for the near to
Cannonier and Burke offer that tourism in the medium term.
Caribbean drives economic growth and increases To be fair, there have been region-wide efforts
the money supply (p. 86). Bangwayo-Skeete and to encourage sustainable tourism and to develop
Skeete confirm this, noting that the sector has a Caribbean policy approach. The 2005
built service economies out of previously agrar- Caribbean Sustainable Tourism Policy
ian ones, improves living standards, creates jobs, Framework, refashioned in 2020 under the same
and earns foreign exchange (2020, p. 4). Studying name, is worthy of note in this respect (CTO
fifteen Caribbean states tourism performances 2005; CTO 2020). Moreover, the United Nations
between 1980 and 2015, Cannonier and Burke World Tourism Organisation (UNWTO) has
find that the sector generates employment, sought to provide a global framework to guide
income and indirectly facilitates state investment countries towards realising sustainable tourism
in the health and education sectors. They reveal sectors and products (UNWTO, UNDP 2017).
that a 1% increase in tourism can lead to eco- Yet, across the region’s states and territories, the
nomic growth of between 0.03% and 1%, depend- approach to tourism remains largely focussed on
ing on the country (Cannonier and Burke 2019, commercial imperatives that have not main-
pp. 103–104). Other studies validate the tourism- streamed either sustainability or development in
economic growth connection and thus indicate the sense of the SDGs. Tourism remains a sector
that policy emphasis on tourism for economic which can be both extractive and dirty, thus fail-
development in the Caribbean has its merits ing to address SDG 12 regarding sustainable pat-
(Lorde et al. 2011; Simundic et al. 2016; Vanegas terns of consumption and production. The cruise
Sr and Croes 2003). All the same, the emphasis tourism industry for example is known for posing
on tourism does not necessarily redound to harms via its disposal of waste in the Caribbean
sustainability. Sea (CTO 2020, p. xiv). However, the lucrative
Speaking of the alignment between Caribbean nature of Caribbean tourism within a mono-
tourism and the SDGs, two authors opine that: industry framework allows such practices to
“There are inconsistencies across the Caribbean persist.
in designing new products and services that con- Caribbean states and territories will need to
tribute to sustainable development and support diversify their tourism offerings to adjust to vola-
for the SDGs.” (Nair and Mcleod 2020). Of note tility in tourism demand and to address the poten-
is the fact that the Caribbean tourist industry is tial damages to their conventional tourism
particularly vulnerable to the sea level rise conse- products that climate change may bring. Working
quences of climate change because coastal towards the SDGs makes sense for tourism. The
tourism dominates the region’s tourist offerings COVID 19 pandemic has brought some diversifi-
(Scott et al. 2012, p. 885). Despite studies high- cation, with emphasis being placed on attracting
lighting the implications of beach erosion and sea long stay visitors and digital nomads who can
level rise for coastal tourism dating as far back as work remotely from the region during COVID
the late 1980s, this element of tourism develop- lockdowns (Wyss 2020; Scott 2021).
ment remains dominant in the region, with Scott, Nevertheless, limited diversification of Caribbean
Simpson and Sim recording some 906 coastal economies means that crises such as this pan-
properties across 19 Caribbean states and territo- demic put the region under severe financial stress,
ries in 2012. They project that Anguilla, Belize, the competitive global economy placing further
British Virgin Islands, Saint Kitts and Nevis, and strictures on Caribbean SIDS. Yet, it bears repeat-
Turks and Caicos Islands could lose about half of ing that Caribbean states do exercise agency in
4 From Crisis to Crisis: Conundrums of Caribbean Existence in the Global Political Economy 53
the GPE as their ‘clever’ efforts at carving out exercised their autonomy to benefit from such
rent-seeking sectors that can generate useful rev- opportunities that capitalism presents. As I have
enue show. stated elsewhere “The Caribbean has simply
become a location in which states and territories
use their sovereignty or their offshore character
6 ent Seeking: Offshore,
R (in the case of non-sovereign jurisdictions) to
Citizen Investor Programmes participate in these economic options for their
and the SDGs internal economic viability” (Hinds 2020, p. 131)
.
An IMF study notes that Bahamas was the first Although having autonomy to operate these
location in the Western Hemisphere to house an sectors, the region finds itself continually under
offshore operation beginning with British and surveillance and disciplinary efforts by the
Canadian companies providing services to their wealthy states of the world. This surveillance has
wealthy clients in 1936, after which such opera- been variously linked to money laundering
tions began to develop in Anguilla, Cayman related to the war on drugs, terrorist financing
Islands, the British Virgin islands and then across post 9/11 and continues. The aptly racialised
much of the English-speaking Caribbean from the “blacklisting” that countries have faced at the
1980s onwards (Suss et al. 2002, p. 4). Offshore hands of the OECD, EU, USA and Canada dur-
sectors can comprise activities such as registration ing the late 1990s, and during the twenty-first
of international companies including shipping century is the chief vulnerability that this sector
companies which then fly ‘flags of convenience’; faces. Caribbean countries have attempted com-
facilitating some administrative element of the pliance to keep these sectors alive but continue to
work of multinational corporations; allowing find themselves on these unfavourable listings
firms and wealthy individuals to change their (Saunders 2018; Bartoszewsk and Morriss 2020).
location to avoid the types or levels of regula- The disciplinary work of bringing taxes back on
tion and taxation that they would face elsewhere. shore and rebuking activities offshore, threatens
Legal and accountancy skills facilitate these activ- to close this Caribbean sector. The ability of these
ities and Caribbean states have been able to pro- sectors to meaningfully contribute to the SDGs,
vide such skills to their benefit (Marshall 2007, again outside of goals 8 and 9 (decent work and
p. 931). Companies operating in this sector also economic growth, and industry innovation and
generate spill overs in tourism and the telecom- infrastructure), is unclear unless the hope is that
munications sectors (Suss et al. 2002, p. 6). economic gains will fund other SDG efforts.
The GPE has created a space for these off- To offshore activities that attract international
shore or international business activities which attention and suspicion, one can add CIPs that
are able to generate foreign exchange with rela- exist in five Caribbean states, Antigua and
tively low levels of capital investment, and Barbuda, Dominica, Grenada, Saint Kitts and
Caribbean states and territories capitalise on this Nevis and Saint Lucia. These programmes con-
space. In Vlcek’s evaluation, both British laws in tribute inflows of foreign exchange and avenues
the nineteenth century that facilitated “offshor- out of financial strain. Saint Kitts and Nevis
ing” and the nomadic character of capitalism launched its CIP in 1984 as the world initiator of
facilitated the development of the region’s inter- such programmes (Hinds and Lorde 2018, p. 42).
national business sectors. Notably he observes CIPs accounted for around 10% of Dominica’s
that the capitalist profit motive cleverly encour- GDP in 2017, 40% in Saint Kitts and Nevis
ages its participants to be self-seeking in pursu- between 2014 and 2015 and in Antigua and
ing loopholes that facilitate profit maximization Barbuda, around 25% of GDP in 2015 and 20%
(Vlcek 2009, p. 1468). It is these elements of in 2017 (Hinds and Lorde 2018, p. 40). Unlike
capitalism that facilitate the development of off- offshore/international business though, these
shoring and Caribbean states and territories have CIPs seek investment, in exchange for passports
54 K. Hinds
and citizenship, towards national development or is but one, though to date the most severe, of the
real estate funds. The focus again is on economic crises that Caribbean states and territories must
and infrastructural development (SDG goals 8 find ways to exist through and between. Climatic
and 9). However, the fund in Saint Kitts and shifts, natural disasters, financial booms and
Nevis is at least a Sustainable Growth Fund. CIPs busts, fluctuations in world market prices and
do offer potential for being aligned with SDGs, global health crises are all par for the course for
being paid specifically into development funds. the region’s people and countries’ debt profiles.
In fact, when Antigua and Barbuda, Dominica This is the nature of Caribbean existence and has
and Saint Kitts and Nevis were severely damaged intensified in the present globalized era.
by Hurricane Irma in 2017, they used these funds Caribbean countries have found ways to make
to help finance their recuperation. Nevertheless, it through, generally doing well among develop-
in seeking to attract investment for recovery, ing countries. However, their manoeuvrings for
Antigua and Barbuda dropped its investment survival, keep them ever on the cusp of both
level for a family of four from US$250,000 to improving their fortunes and harming them.
US$125,000, just above the rate of US$100,000 in Their fetishization of economic growth and earn-
Dominica. These CIPs are some of the most ing foreign exchange is driven by their external
affordable in the world and raise fears that they exposure, and trade openness in particular, facets
can be used by nefarious actors laundering of their smallness and colonial legacies of over-
money, evading taxes, or engaged in other unsa- specialization in one economic area. This obses-
voury acts (Hinds and Lorde 2018, pp. 40–41). sion and the strategies and policy options that it
As such the OECD has listed all these Caribbean creates, can contradict some efforts to achieve the
CIPs and even residency programmes in SDGs. Despite repeated commitments, voicings
Barbados, Bahamas and Turks and Caicos of support and the creation of policy documents,
Islands, that are not generally classified as CIPs, Caribbean states and territories seem to respond
as high risk and as encouraging tax evasion mostly to the imperatives of economic viability
(OECD 2021; Garside 2018). Such actions as structurally dictated by their placement in the
threaten the marketability of CIPs. GPE, bobbing and weaving between crises.
Like offshore/international business activities, Moreover, the SDGs themselves require states to
CIPs developed to take advantage of opportuni- swim against the tide, seeking actions and results
ties that the GPE offered, specifically in this case that contradict global capitalist forces. However,
the market for multiple citizenships in a globalis- the COVID 19 pandemic may force some
ing world. The CIP strategy has been a clever one recalibration.
and has assisted these states in weathering both This pandemic offers an opportunity for the
the global financial crisis and the hurricane that Caribbean and for the world to re-order priorities
they faced during 2017. However, CIPs are capri- towards human well-being, as the SDGs require.
cious, contingent on demand and threatened by It is here that Caribbean states and territories can
policing of such activities by outsiders. Hence, activate their agency to review their strategies for
their ability to support the SDGs or even continue existing in the world. Caribbean states and terri-
to feed economic viability remains suspect. tories should move beyond contemplation of dif-
ferent ways of generating growth and maintaining
livelihoods to implementation. COVID 19 has
7 Conclusion revealed the need for countries in the region to
intensify initiatives that generate food security in
The COVID 19 pandemic all but halted global agriculture and to increase other forms of local
travel with deleterious effects on Caribbean tour- production. This domestic production should be
ism. The ripple effects of this shock cannot be linked to foreign exchange earning sectors, espe-
overstated for a region that relies heavily on just cially tourism, to kick start elements of sustain-
one or two sectors. Yet, the COVID 19 pandemic ability. Caribbean countries could also benefit
4 From Crisis to Crisis: Conundrums of Caribbean Existence in the Global Political Economy 55
from taking this moment to be more serious about economy that would accommodate more
the employment of renewable energy resources, socialised or embedded liberal approaches to
which the region possesses in abundance, across operating in the global economy. Whether the
households and in all sectors. Countries in the global partnerships required under SDG 17 can
region cannot hitch their fates to initiatives such bring this, is to be seen.
as CIPs or the offshore sector. This said, there
may be space for these areas once the Caribbean
is treated equitably rather than being over-policed References
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draw on tropes that portray the region as a space Baldacchino, G. (2014). Small Island States: Vulnerable,
Resilient, Doggedly Perseverant or Cleverly
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tourism resilience in small island states: A tale of two
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options such as natural disaster clauses in loan New Tax Colonialism. IFC Review, 17 May.
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Caribbean systems of patron-clientelist gover- Economics, 25(1), pp. 85-108.
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Croes, R. & Rivera, M. A. (2010). Testing the empiri-
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Sustainable Water Resource
Development in the Lower 5
Mekong Basin: Synergies
and Trade-Offs across Borders
and Sectors
In July 2019, the lowest water levels in his- tries. The river has been the source of food (rice,
tory were recorded at all monitoring stations in other crops, fish, etc.) and waterways for its peo-
the mainstream, and the amount of water flow ple. Rice dominates agricultural production, at
dropped by 70–75% from the average of the both the commercial and household levels. The
same period in 2018. Moreover, the flood cycle Lower Mekong countries produced more than
has become irregular, severely affecting fish- 109 million tons of paddy rice in 2017, with Viet
ing, agricultural production, and people’s lives. Nam, Thailand, and Myanmar being the fifth,
Amid these many challenges, there are opportu- sixth, and seventh largest rice producers in the
nities in water resources management through world, respectively. Furthermore, Thailand and
the application of new technology in energy and Viet Nam are the second and third largest export-
agricultural production and better cooperation ers in volume, and Cambodia is the eighth largest
in water management amongst riparian coun- exporter (Statista 2018). Most rice production in
tries. In fact, regional cooperation in the Mekong the region is traditional lowland cultivation, in
basin has become increasingly dynamic in recent which water is the single most important compo-
years with the emergence of a new mechanism nent for production and the Mekong water is
and the reshuffle of existing ones. Cooperation truly a valuable resource.
mechanisms amongst riparian countries and Total catches and production from Mekong
with external partners have provided platforms fisheries (including aquaculture) totalled about
for the discussion of regional issues, including 3.9 million tonnes in 2008, of which about two
water resources management and sustainable million metric tons were from capture fisheries.
development. Fisheries account for nearly 12% of Cambodia’s
This chapter identifies major challenges in gross domestic product (GDP) and contribute
water resources development, using scenarios for more to the country’s economy than rice produc-
foreseeable water resources development and tion. In the Lao PDR, the fisheries value is equiv-
planning, and evaluates the current Integrated alent to 7% of the country’s GDP. Although
Water Resources Management (IWRM) tools proportionally less significant to the national
used in the Mekong and the water resources pro- economy, the Mekong fishery sectors in Thailand
cedures of the Mekong River Commission and Viet Nam add well over $750 million to their
(MRC). The chapter then explores ways to GDP each year. Millions of people rely on sub-
improve coordination amongst riparian countries sistence fisheries for food security, and fisheries
and amongst water use activities in the region. support tens of thousands of businesses—from
shops and food stalls that supply fishing families
to boat builders and fishing gear suppliers.
2 hallenges to Water Security
C Capture fisheries make the largest contribution to
in the Mekong River Basin the Mekong’s fishery sector. In 2008, production
was estimated at about 1.9 million metric tons,
The Mekong River is the world’s 12th longest five times more than in 2000. About 1.6 million
river, at almost 4763 kilometres, flowing from the metric tons originate in the Mekong Delta in Viet
Tibetan Plateau in China at an elevation of about Nam. The production of inland aquaculture in
5000 m. In China, the river runs through Yunnan Cambodia, the Lao PDR, and Thailand is also
Province and is known as the Lancang River. increasing, but remains less important than cap-
After leaving China, it flows through Myanmar, ture fisheries (MRC 2018a).
the Lao People’s Democratic Republic (Lao The Mekong basin has considerable potential
PDR), Thailand, Cambodia, and Viet Nam into for hydropower development, serving both
the sea. In this chapter, we use the name Mekong domestic and export markets. The Upper Mekong
for both the upper and lower parts of the river. Basin in China has estimated hydropower poten-
Throughout history, the river basin has been tial of nearly 30,000 megawatts (MW), equiva-
home to millions of people in its riparian coun- lent to that of all five Lower Mekong Basin
5 Sustainable Water Resource Development in the Lower Mekong Basin: Synergies and Trade-Offs… 61
(LMB) countries (MRC 2010a). Unfortunately, pared with the yearly average – lower than ever
this distinguishing feature is also the source of recorded since measurements began 60 years
complications that have arisen in the past few ago. Besides, floods have worsened the state
decades. In 1986, China started damming the of the basin, putting the livelihoods of tens of
Lancang, its section of the Mekong, with Manwan millions of people living and working along
Dam. Since then, it has completed another 10 the river in jeopardy. Another critical problem
mega-dams on the Lancang. The northernmost of is sediment reduction, which is projected to
the dams is Yunnan’s 990 MW Wunonglong drop by as much as 67% in 2020 and 97% in
Dam, high in the Himalayas of the Diqing Tibetan 2040 in the Mekong Delta (MRC 2018b). The
Autonomous Prefecture, which was completed in sedimental poverty is likely to have detrimental
2019. The southernmost one in Jinghong is near effects on the agricultural productivity, geomor-
the lush forests of Xishuangbanna. Apart from phology, and persistence of the delta landform
China, the Lao PDR possesses two hydropower (MRC 2018b). Under the impact of natural
dams—the Xayaburi Dam and Don Sahong disasters and human exploitation, the basin
Dam—in the mainstream of the Mekong. Thanks is undergoing substantial loss of biodiversity.
to its favourable geographic position, the Lao According to the WWF, the Greater Mekong
PDR has strong hydropower potential and it con- Subregion (GMS) risks losing more than a third
siders earnings from exports of hydroelectricity of its remaining forest cover within the next two
as a means to leapfrog development and reduce decades (WWF 2020). Salinity intrusion in the
poverty. Indeed, hydropower is a lucrative sector, Lower Basin in general and the Mekong Delta
and the governments and media of countries with in particular has occurred earlier and deeper
the potential for dams promote hydropower as a than in the 2015–2016 dry season, the period
source of green and clean energy, superior to dan- of historic salinity which caused $646 million
gerous or polluting coal-based energy (Yoshida of damage to the delta. In fact, saltwater intru-
et al. 2020). However, dams bring various chal- sion has been very high since December 2019
lenges such as deforestation, relocating local and is projected to rise with high tides (Vietnam
residents, designing dams that can facilitate the Disaster Management Authority 2020). It can
flow of fish and sediment, and coordinating be said that the severity is caused and exacer-
operations. bated by both natural phenomena such as cli-
In fact, the Mekong River basin faces a mul- mate change and human activities such as the
titude of problems, such as changes to its natu- construction of dams.
ral flow, severe and more frequent droughts and The operation of upstream hydropower dams
floods, loss of sediment, biodiversity degrada- is seen as a catalyst for dramatic fluctuations in
tion, and saltwater intrusion, which could be river levels and changes in the natural cycle of the
aggravated in the future unless appropriate solu- river (Bainbridge and Vimonsuk 2020). The eco-
tions are applied. Alterations to the natural flow system deterioration is also imputed to hydro-
regimes of the river and streams, with increased power projects, as these dams prevent the
dry season flows and decreased wet season migratory pathways of fish and capture sediment
flows, have been recorded in riparian countries, behind their walls. An empirical study showed
as evidenced at Chiang Saen where the Mekong that more than half of the Mekong’s 165 million
enters the Lower Basin.1 In addition, riparian metric tons sediment load has been trapped by 11
countries have suffered the adverse impacts mega-dams on the mainstream in China (East–
of more acute droughts. To illustrate, the 2019 West Center and The Stimson Center Southeast
drought has brought the Mekong water level Asia Program 2020). This aggravation of the
across the basin to a record low since June, with Mekong spurs the active engagement of relevant
a serious inflow deficit to the Mekong com- stakeholders to ensure sustainable water use
management, for the security and prosperity of
For further details, see Basist and Williams (2020).
1
the whole basin.
62 H. Phoumin et al.
patterns) and trends of exogenous drivers define scenario covers the water resources development
the M1 scenario. that would be in place by 2040 if these plans were
fully implemented. The formulation of the three
3.2.1 E arly Development Scenario main sub-scenarios was considered, building
(2007)—M1 Scenario from the M3 scenario, in response to key policy
The M1 scenario aims to assess the distribution questions arising from the stated objectives and
of the benefits, costs, impacts, and risks of water interest of the riparian states as a result of climate
resources development in the Mekong Basin as change (M3CC), the high level of irrigation
of 2007. The scenario defines the state of water development, and flood protection, in addition to
infrastructure development as it was in 2007 what is assumed under the M3 scenario.
when the flow regime of the Mekong mainstream Given the situation described above, there has
was considered to be still in a natural state, except been increasing pressure from the basin countries
for the influence of Chinese dam impoundments and project developers for the provision of an
in the Upper Mekong or Lancang River. The sce- integrated basin perspective against which
nario includes the infrastructure and land use/ national plans and proposed projects can be
cover changes as of 2007. In addition to model- assessed to ensure an optimal balance between
ling with the decision support framework, the economic, environmental, and social outcomes,
impact assessment of the early development sce- and mutual benefits to the LMB countries.
nario was based on existing observations, studies, Table 5.1 presents the selected priority indicators
and assessments of historical changes in land use, for Cumulative Impact Assessment (CIA) that
development of (irrigated) agriculture, flood con- picked by disciplinary experts in social, environ-
trol structures, wetland areas and biodiversity, mental and economic framework.
capture fisheries, and livelihood and well-being Based on this framework, the scenarios (M1,
indicators. The assessment results allowed the M2, M3, M3CC) were assessed across three
member countries to consider whether the bene- groups of indicators: social, environmental and
fits, impacts, and risks of new water resources economic. The scope of the assessment looks
development are reasonable and equitable. into the impacts on sustainability, cross-sector
effects, and on transboundary effects. The results
3.2.2 D efinite Future Scenario allow a direct comparison of all the main scenar-
(2020)—M2 Scenario ios and sub-scenarios for each of the three
The M2 scenario aims to assess the distribution indicators. The combination of the quantitative
of the benefits, costs, impacts, and risks of water results and the more qualitative synthesis shaped
resources development in the Mekong Basin in a more robust and consistent assessment
2020. The scenario includes all existing infra- approach. The Delphi approach is also deployed
structure development of hydropower to be in for the expert judgment, trying to quantify the
place by 2020. The impacts (positive and nega- impacts based on the knowledge and experience
tive) of this scenario are inevitable (but negative of the experts from the riparian countries of the
impacts can be mitigated). Mekong.
mainstream mainstream
Tab. 5.1 (continued)
Cross-sectoral
synergies
Transboundary balance
Adaptaon to climate
change
comparison
Scenario
Level of informaon
sharing and
parcipaon
situation in 2007) and M2 (planned water infra- ies) for every dollar gained in another sector (e.g.
structure situation for 2020) results in what is hydropower). For example, if the macroeconomic
gained for the hydropower sector through the assessment indicated that the hydropower sector
additional investment defined by the 2020 sce- output increases in the 2020 scenario by $100
nario. This can be calculated for all sectors based million and the fisheries output decreases in the
on the outputs of the macroeconomic assessment same scenario comparison by $50 million, then
approach. Dividing the sectoral value differences the result shows that for every dollar gained in
leads to an important insight: hydropower about 50 cents are lost in fisheries.
Comparing all sectors identifies not only syner-
(Fisheries Sector [M2] – Fisheries Sector [M1])/ gies and trade-offs but also how synergies and
(Hydropower Sector [M2] – Hydropower trade-offs shift as investments gradually increase
Sector [M1]) or shift between sectors. From a wider systems
perspective, these results can guide the manage-
The proportional relationship defines how ment of cross-sector trade-offs and the realisation
much is gained or lost in one sector (e.g. fisher- of conceivable synergies.
66 H. Phoumin et al.
Table 5.2 (continued)
Lower bound Upper bound Priority
Proportion of fish stocks within 0% 100% Medium
biologically sustainable levels
% of land that is degraded over total 20% 0% Medium
land area
Sustainable fisheries as a percentage 0% 5% Medium
of GDP
Investments under an enforced $0 $100 m Low
disaster risk management strategy
Degree of IWRM implementation 0 100 Low
(0–100)
Proportion of transboundary basin 0% 100% Low
area with an operational arrangement
for water cooperation
Coverage of protected areas in relation 0% 100% Low
to coastal areas
Forest area as a proportion of total 10% 70% Low
land area
Source: MRC 2017
16%, in Cambodia with 106,000 ha or 5%, and in duction, if not compensated with fertilizers. Also
Viet Nam by 11,000 ha or 1%. A significant part the discharge of fine sediments and associated
of the reduction of flooded areas comprises valu- nutrients to coastal water will decrease consider-
able wetlands. ably with negative impacts on marine fisheries.
There will be a significant reduction in flood- Notwithstanding the negative impacts on wet-
ing extent around the Tonle Sap: 39,839 ha or lands and fisheries productivity, the scenario will
3.2% in an average year, which will impact on the create a net economic benefit to the LMB coun-
extent of inundated grasslands, forests and flood tries of US$ 11,700 million NPV, mainly from
recession rice and the related livelihood values new hydropower but also reduced flood damages
that these areas support. and increased reservoir fisheries. However, the
One environmental hotspot on the mainstream scenario put the livelihoods of about 887,000 vul-
in Northern Thailand and one hotspot on the nerable people at risk who are dependent on riv-
Lower Sesan in Cambodia will be highly er’s resources: 297,000 in Lao PDR, 46,000 in
impacted by the ongoing developments in this Thailand, 102,000 in Cambodia, and 442,000 in
scenario. Viet Nam.
Capture fisheries, which are particularly rele- The key points of this scenario are that:
vant to rural livelihoods, will be reduced by an
estimated 15% in Lao PDR, 3% in Thailand, 7% • The changes to flow regime are inevitable and
in Cambodia, and by 9% in Viet Nam, as a result irreversible and set in process a range of envi-
of the flow changes (caused mostly by the UMB ronmental and social impacts which will need
dams) and the blockage of fish migration (caused to be recognised and addressed; and
mostly by current tributary dam development in • The new storages provide sufficient flow aug-
the LMB). mentation to meet the consumptive demands
An irreversible process of long term river bed of the Foreseeable Future Scenarios.
incision and bank erosion are induced, whilst
locally significant in some locations in the short 4.1.2 L MB 20-Year Plan Scenario
term, will become more noticeable after 20 years. without Mainstream Dams
Floodplain sedimentation will decrease within a This scenario comprises development of 1.8 Mha
decade with consequences for agricultural pro- of new irrigation within the LMB (with approxi-
Table 5.3 Economic net present value by scenario, sector and country (US$ million) (Source: MRC 2010b)
Definite 20-Year 20-Year 20-Year 20-Year 20-Year 20-Year Long Term Long Term Long Term
Scenario Plan w/o Plan w/o Plan w/o Plan w/o Plan Plan + Devt Dev't + Very High
MS Dams Lower MS Thai MS Cambodia Climate Scenario Climate Dev't
Dams Dams MS Dams Change Change
Hydropower 11,491 17,603 25,002 28,706 30,333 32,823 32,823 37,865 37,865 38,787
Irrigated Agriculture 0 1,659 1,659 1,659 1,659 1,659 1,659 3,423 3,423 11,789
Reservoir Fisheries 91 107 132 202 169 215 215 420 420 473
Aquaculture 1,129 1,261 1,261 1,261 1,261 1,261 1,261 1,892 1,892 2,522
Capture Fisheries Losses -946 -732 -952 -1,914 -1,218 -1,936 -1,936 -1,818 -1,818 -1,801
Wetland Area Reduction -228 -176 -178 -225 -178 -225 101 -260 36 -310
Eco-hotspots/Biodiversity -85 -220 -240 -330 -305 -330 -415 -435 -525 -700
Forests -153 -183 -228 -349 -254 -372 -372 -731 -731 -822
Recession Rice -144 -173 -175 -178 -176 -178 278 -226 185 -274
Flood Mitigation 461 360 360 360 360 377 -273 408 -296 432
Riverbank Erosion 0 n n n n n N n n n
Navigation 64 64 64 64 64 64 64 64 64 64
Total LMB 11,700 19,596 26,729 29,277 31,739 33,386 33,404 40,624 40,514 50,176
Country Comparisons
Lao PDR 6,595 11,688 17,636 18,927 22,632 22,588 22,604 26,235 26,334 28,530
Thailand 1,095 2,750 3,913 3,970 4,223 4,410 4,445 4,644 4,730 5,396
Cambodia 693 1,446 1,351 2,237 1,143 2,237 2,628 5,049 5,216 11,013
Vietnam 3,317 3,711 3,828 4,142 3,741 4,151 3,727 4,697 4,233 5,237
5 Sustainable Water Resource Development in the Lower Mekong Basin: Synergies and Trade-Offs…
Total LMB 11,700 19,596 26,729 29,277 31,739 33,386 33,404 40,624 40,514 50,176
mately 500,000 ha dry season irrigation) and 56 power, irrigation and fisheries (reservoir and
tributary dams either under construction or aquaculture) sectors.
planned to be developed by 2030.
All the water demands for the planned irriga- 4.1.3 L MB 20-Year Plan Scenario
tion over the next 20 years will be met with sur- without Lower
plus flows into the delta over and above the Mainstream Dams
baseline flows. There will be a small further In this scenario, six mainstream dams above
decrease in flooding compared to that achieved in Vientiane are added to the previous scenario.
the Definite Future Scenario with small, but simi- This will not materially change the water quan-
lar, incremental benefits and disbenefits. tity regime and thus the planned irrigation within
The tributary dams will have a negative and the 20 year Scenario can still proceed.
largely local impact on capture fisheries offset The flow regime will be similar to that without
mitigated in yield terms by the opportunity to mainstream dams and only marginally different
increase reservoir fisheries. The tributary dams from the Definite Happening Scenario with on
will create resettlement issues and the reduction average a 12% increase in dry season flows and a
in capture fisheries will have social impacts, par- 3% reduction in wet season flows compared to
ticularly with regard to food security amongst the DHS. However, the conversion of the main-
those living along stretches of the rivers. stream in the Northern part of Lao PDR into
The new irrigation development will cause an series of slow-moving waters between run-of-
increase in nutrients entering the river systems, the-river hydropower schemes would create
which may have local impacts, but the large dilu- localised impacts for people dependent on the
tion effect in the mainstream will negate any sig- river system for their livelihood.
nificant trans-boundary impacts. This scenario would put another five out of 32
Changes in the ecology of the Tonle Sap Lake environmental hotspots under stress, compared
would be as a result of a reduction of nutrients with the Definite Happening Scenario.
entering the system due to a decrease in reverse Capture fisheries production would be further
flow (mainly caused under the Definite Future declined compared to the Definite Future
Scenario), but this may be partly compensated by Scenario (11% in Cambodia, 7% in Viet Nam,
increased loadings from agricultural return flows. 1% in Lao PDR and 2% in Thailand). The impacts
Capture fisheries would further decline com- on the flagship species, the Giant Catfish num-
pared to the Definite Happening Scenario. The bers, are expected to be severe.
decline is significant in Cambodia (8%) but less An additional 1128 million vulnerable
in other countries: Lao PDR (0%), Thailand (1%) resource users would be affected in addition to
and Viet Nam (4%). those impacted by the Definite Future Scenario.
This scenario would put up to 522,000 liveli- The figure is highest in Lao PDR (485,000 peo-
hoods at risk in addition to the 887,000 vulnera- ple), followed by Viet Nam (328,000) and some-
ble resource users that could be affected in the what less in Thailand (155,000 people) and
Definite Happening Scenario. The increase is Cambodia (160,000).
highest in Lao PDR: 404,000 people or 135%. The NPV of LMB benefits will increase to
The increase is less in the other countries: US$ 26,728 million NPV relative to the baseline,
Thailand 0, Cambodia 110,000 people or 108% of which US$ 17,636 million will accrue to Lao
and Viet Nam 10,000 or 2%. PDR.
The NPV of benefits will be US$ 19,596 mil-
lion NPV relative to the baseline (US$ 7896 mil- 4.1.4 L MB 20 Year Plan Scenario
lion compared to the Definite Future Scenario), with all Mainstream Dams
largely from tributary hydropower dams. The This scenario adds the five lower mainstream
scenario would create 1.02 million job opportuni- dams in Lao PDR and Cambodia to the previous
ties in all LMB countries, primarily in the hydro- scenario that included only the dams above
5 Sustainable Water Resource Development in the Lower Mekong Basin: Synergies and Trade-Offs… 71
Vientiane. The net economic benefits of the although arguably less severely. The number of
hydropower sector is large (US$ 32,823 million people at risk of loss of livelihood in Lao PDR is
out of total US$ 33,386 million NPV of the sce- potentially 600,000 and in Thailand some
nario). As in all Foreseeable Future Scenarios, 470,000.
new irrigation contributes US$ 1659 million of The large reduction of capture fisheries pro-
these net benefits (offset partially by losses to duction may be partly offset by increases in aqua-
recession rice). culture (including rice field and reservoir
The benefits are unevenly distributed. Lao fisheries). However, increases in aquaculture are
PDR invests and benefits most: US$ 22,588 mil- unlikely to benefit the poor people, many of
lion NPV) compared with US$ 4410 million whom would lose their wild fishing and who have
NPV of Thailand, US$ 4151 million NPV of Viet no access to land, water and capital to fall back
Nam and US$ 2237 million NPV of Cambodia. on.
The 11 mainstream dams will have little effect
on the flow regime created by the Definite 4.1.5 L MB 20-Year Plan Scenario
Happening Scenario. However, the conversion of without Cambodian
large reaches of the mainstream to a series of Mainstream Dams
slow-moving waters between run-of-the-river This scenario contains nine mainstream dams but
hydropower schemes will create localised excludes the two dams in Cambodia (Stung Treng
impacts for people dependent on the river system and Sambor) from the previous scenario.
for their livelihoods. Fish migration up the Mekong into the 3S
Sixty percent of the ecologically valuable Basin would still be possible and the ecologically
river channel between Kratie and Houei Xai very valuable stretch between Kratie and the
would change to a series of connected impound- Cambodia-Lao border would maintain its natural
ments. Important habitats like deep pools, rapids character. Only one of the four flagship species
and sandbars would be lost largely, resulting in would be severely impacted, and the highly
severe loss of biodiversity. Two of the four flag- impacted environmental hotspots would reduce
ship species would be very severely impacted, from 14 to 11.
even to the point of extinction. When compared to the baseline condition,
Fourteen out of the 32 environmental hotspots fisheries losses in Cambodia would reduce from
would be highly impacted and another 9 moder- about 37% reduction with all mainstream dams
ately impacted; some of these sites are listed constructed to about 18% for this scenario. There
under the Ramsar Convention. The scenario would also be a significant reduction of fish
could also result in significant changes in the losses in Viet Nam (14%) and a small 3% reduc-
ecology and primary productivity of the Tonle tion in fish losses above the Lao/Cambodian bor-
Sap system. der compared with all mainstream dams scenario.
Capture fisheries production would be For Cambodia, if this smaller reduction in fish
severely affected in both Cambodia (37% decline) production is simply proportioned amongst vul-
and Viet Nam (28% decline). This decline is nerable resource users then the number of users
much less in Lao PDR (6%) and Thailand (2%). affected would drop from about 1,200,000 for the
The reduction in fisheries and the creation of ‘all mainstream dams’ case to about 350,000.
impoundments on vast reaches the Mekong Also, the number of vulnerable resource users in
mainstream will have substantial negative social Viet Nam would reduce by 637,000 or 50%.
consequences in the affected areas, especially in This scenario results in an NPV US$ 31,739
Cambodia where conservatively the livelihoods million which is a drop of US$ 1652 million
of up to 1.2 million people would be put at risk compared to the ‘all mainstream dams’ scenario.
over and above the Definite Future Scenario. The new job opportunities in Cambodia would
Similar numbers would be affected in Viet Nam also reduce from 271,000 to 156,000 while
72 H. Phoumin et al.
those of the other countries would not change 4.2 esults of the 2st Basin
R
significantly. Impact Assessment
4.1.6 L MB 20-Year Plan Scenario Table 5.4 summarises key results of the second
without Thai Mainstream Dams basin impact assessment.
This scenario includes nine mainstream dams
excluding the two in Thailand. In most respects, 4.2.1 SDG-Based Sustainability Index
the impacts are similar to those with all eleven Table 5.4 shows the sustainability level for sce-
mainstream dams as the two Cambodian dams nario M1 (early development scenario—2007),
and the Don Sahong dam in Lao PDR will already the differences between the main scenarios and
be impacting on fisheries and other environmen- M1, and the differences between sub-scenarios2
tal values. The scenario has an NPV of US$ and the main scenario M3 (planned development
29,277 million compared to US$ 33,386 million scenario—2040); with climate change (M3CC).
for the ‘all mainstream dams’ case. The results of the SDG-based sustainability index
indicate a rather low level of sustainability for
4.1.7 M ekong Delta Flood Viet Nam’s Mekong Delta. Another key insight is
Management Scenario that the Lao PDR would incur the greatest loss
This scenario is separate from the 20 Year Plan for main scenario M2. Main scenario M3, on the
Development Scenarios in that it does not involve other hand, would result in the same absolute loss
water consumptive projects (irrigation) nor main- of sustainability points for Cambodia and Viet
stream and tributary hydropower developments. Nam. Thailand would most likely experience the
It relates to managing floods in the delta reaches lowest reduction in sustainability across all sce-
of the lower basin (Viet Nam and Cambodia) and narios. The sub-scenario perspective reveals that
assesses the impacts and benefits of various flood lower investment levels in hydropower would
reduction measures over the next 20 years. There lead to more sustainable development pathways
are no direct implications for Lao PDR and in all countries, in which the sustainability index
Thailand as any impacts from this scenario are would increase by between 1.12 points in
kept within the delta reaches and downstream of Thailand up to 1.73 points in Cambodia. The
Khone Falls. comparison of the planned development scenario
These planned flood risk reduction measures without hydropower (H1a) and the planned
in the foreseeable future (10–20 years) in the development scenario without mainstream
Mekong Delta would have marginal positive and hydropower (H1b) shows that this index suggests
negative transboundary impacts. However, in the a similar impact from tributary and mainstream
longer term, severe negative transboundary dams. The planned development scenario with
impacts could occur if large areas of presently hydropower mitigation investment (H3) indicates
flooded areas are developed for more intensive that substantial improvements in dam manage-
agriculture and are protected from flooding to ment and the implementation of mitigation mea-
provide greater protection levels for communities sures can provide substantial gains in Cambodia.
in the delta. All of these impacts could be The planned development scenario with high
increased by impacts of climate change and ris- agriculture and land use (sub-scenario ALU2)
ing sea levels. highlights that excessive agricultural expansion
A basin-wide and multi-sector study needs to
be initiated to study the long-term flood manage-
ment options for the Mekong Delta to respond to Three sub-scenarios for 2040 were developed to explore
2
growing pressures from land development, sea the interactions between water resources development and
changes in climate. Comparisons between scenarios M3
level rise, climate change, and upstream develop- and CC2, for instance, measure the effect of water
ment plans. resources development at the level of 2040 under a cli-
mate that is even wetter than mean projections.
Table 5.4 Scenario impacts on SDG-based sustainability indicators
Scenarios
M2- M3- M3CC-M1 ALU1- ALU2- CC2- CC3- IRR1- IRR2- FP1- FP2- FP3- H1a- H1b-
M1 M1 M1 M3CC M3CC M3CC M3CC M3CC M3CC M3CC M3CC M3CC M3CC M3CC H3-M3CC
CAM 7.62 −1.38 −2.24 −2.27 0.31 −0.05 −0.01 −0.23 0.10 −0.07 0.18 0.07 0.33 1.73 0.79 0.20
LAO 8.27 −2.08 −2.24 −2.28 −0.07 −0.02 −0.05 −0.09 −0.06 0.03 0.01 0.01 −0.08 1.41 0.37 −0.09
THA 8.70 −1.18 −1.47 −1.51 0.02 −0.03 −0.02 −0.27 −0.05 −0.01 0.04 0.00 −0.04 1.12 0.58 −0.08
VIE 5.41 −1.22 −1.70 −1.24 0.04 −0.38 0.04 −0.17 −0.24 −0.32 −0.14 −0.29 −0.29 1.18 0.52 −0.11
LMB 29.9 −5.85 −7.63 −7.68 0.30 −0.49 −0.04 −0.76 −0.24 −0.37 0.08 −0.21 −0.08 5.44 2.27 −0.08
CAM Cambodia, LAO Lao PDR, THA Thailand, VIE Viet Nam, LMB Lower Mekong Basin
ALU = agriculture and land use; ALU1 = planned development scenario without ALU; ALU2 = planned development scenario with high ALU; CC2 = planned development
scenario with climate change (wetter climate); CC3 = planned development scenario with climate change (drier climate); FP1 = planned development scenario without flood
protection; FP2 = planned development scenario with medium flood protection; FP3 = planned development scenario with high flood protection; H1a = planned development
scenario without hydropower; H1b = planned development scenario without mainstream hydropower; H3 = planned development scenario with hydropower mitigation invest-
ment; IRR1 = planned development scenario without irrigation; IRR2 = planned development scenario with high irrigation; Lao PDR = Lao People’s Democratic Republic;
LMB = Lower Mekong Basin; M1 = early development scenario (2007); M2 = definite future scenario (2020); M3 = planned development scenario (2040); M3CC = planned
development scenario with climate change (mean of warmer and wetter climate); SDG = Sustainable Development Goal.Source: MRC (2017)
5 Sustainable Water Resource Development in the Lower Mekong Basin: Synergies and Trade-Offs…
73
74 H. Phoumin et al.
Table 5.5 Net Present Value (Net Gains from) for Flood Protection Investments ($ million)
Scenario Lao PDR Thailand Cambodia Viet Nam Total
Scenario M1 3 6 541 3061 3611
Scenario M2 38 139 335 2014 2527
Scenario M3 26 411 46 1384 1867
Scenario M3 CC 162 1264 337 3791 5554
Scenario F1 12 21 0 0 32
Scenario F2 355 2420 189 3858 6821
FP1 = planned development scenario without flood protection, FP2 = planned development scenario with medium flood
protection, Lao PDR = Lao People’s Democratic Republic, M1 = early development scenario (2007); M2 = definite
future scenario (2020); M3 = planned development scenario (2040); M3CC = planned development scenario with cli-
mate change (mean of warmer and wetter climate)
Source: MRC (2017)
can lead to overall sustainability losses, as shown to cause substantial damage, estimated at around
for Cambodia. $639 million per event.
For scenario M2, most impacts on Cambodia’s
4.2.2 Benefits and Impacts community are likely to be negative. The vulner-
The main scenario M2 (definite future sce- ability of communities is likely to increase sub-
nario—2020); is likely to provide very mixed stantially due to reduced food security,
outcomes for the Lao PDR. The development particularly increasing food prices. This might be
gains and increasing investments in infrastructure partially mitigated if agricultural productivity
(e.g. irrigation) imply that more assets are improvements outpace population growth.
exposed to extreme events, such as floods. The However, the fisheries losses are likely to put
increasing risk can convert into increasing vul- pressure on the livelihoods of many communities
nerabilities if no additional protective or adaptive in the Tonle Sap area. Adaptation strategies are
mechanisms are put in place. Floods are an likely to make outmigration necessary, which can
important driver for community vulnerability. lead to deep social problems, depending on how
Table 5.5 shows the net present value (NPV) of successful public investments will be in creating
investments in flood protection included in the new employment opportunities. The NPV of
relevant scenarios. The overall investment cost investments in flood protection is about $337
by the Lao PDR (M2: $23 million; M3: $99 mil- million for M3CC. The planned investments
lion, M3CC: $119 million) would result in (M2: $4 million; M3: $482 million; M3CC: $579
reduced exposure and thereby reduce vulnerabil- million) would mitigate flood-related vulnerabil-
ity, and a positive NPV of $162 million for sce- ities. Only 1:100-year events would continue to
nario M3CC. Extreme floods (1:100 years) would cause substantial damage, possibly up to $325
not be averted and would cause damages of million per event.
around $144 million. Viet Nam is likely to experience a diversity of
Thailand is likely to become a main benefi- vulnerability-related effects. Fish-related losses
ciary of the hydropower expansion planned for are likely to be substantial for M2 (and M3),
scenario M2. Vulnerabilities related to agricul- translating into economic losses and livelihood
tural activities are likely to decline if irrigation adaptation pressure. Some might be balanced by
expansion plans are being implemented. The agricultural expansion, which would also com-
NPV of investments in flood protection is nearly pensate food security losses, particularly if land
$1.3 billion for M3CC. The planned investments use change will continue diversification trends
(M2: $83 million; M3: $149 million; M3CC: (including aquaculture and upland crops).
$178 million) would reduce flood-related vulner- Sediment losses are likely to demand serious
abilities. Only 1:100-year events would continue investments to mitigate erosion and to maintain
5 Sustainable Water Resource Development in the Lower Mekong Basin: Synergies and Trade-Offs… 75
mainstream. All mainstream development pro- flood and drought disaster emergency manage-
posals are required to undergo the prior consulta- ment, carrying out joint assessments of flood
tion process and aim to come to a unified control and drought relief in the Mekong basin,
agreement on how to proceed. Up to now, 74 and conducting joint studies on the early setting
PNPCA projects have been submitted to the up of communication lines/channels for informa-
MRC, of which five projects have been under the tion sharing during emergencies such as floods
prior consultation process while the rest have and droughts on the Lancang–Mekong River (see
been initially informed and notified (MRC n.d.). also the LMI Disaster Response Exercise and
This notice and consultation mechanism does not Exchange; Parameswaran 2017; GMS Secretariat
bind members to reach agreement, and the con- 2017).
sulted countries do not have a veto to request a The MRC has also played an important role
project to stop. Nevertheless, this institution- in facilitating waterborne transport for eco-
alised consultation process is a rare tool for the nomic and ecological development. The MRC
notified countries and relevant stakeholders and Navigation Strategy’s focus ‘to increase the
communities to give suggestions and for the initi- international trade opportunities for the MRC
ating country to accept certain measures to avoid, member countries’ mutual benefit, and assist-
minimise, and mitigate any potential adverse ing in coordination and cooperation in develop-
transboundary impact and to find a better way to ing effective and safe waterborne transport in a
share the benefits (for the case of the Pak Beng or sustainable and protective manner for the
Pak Lay mainstream hydropower development waterway environment’ (MRC 2003a: 38) can
see Sotheary 2019). be seen as a foundation for water diplomacy
Furthermore, the Mekong Agreement speci- amongst member countries in terms of water-
fied the MRC as the primary institutional mecha- way transport.
nism for dispute resolution and asks for the MRC
to ‘make every effort to resolve the issue’. If the
MRC is unable to remedy a dispute, the next step 5.1 Facilitation of Multi-
is for ‘the Governments to take cognizance of the Stakeholder Water Diplomacy
matter for resolution by negotiation through dip-
lomatic channels within a timely manner’. Although state actors are major players in
Furthermore, Article 35 of the 1995 Mekong water diplomacy, the engagement of non-state
Agreement provides space for external parties to actors in water resources management has been
act as external arbitrators and mediators. increasingly noticeable and evidenced in several
Although the MRC cannot perform the function mechanisms. In nature, the MRC is a purely inter-
of an arbitrator, to some extent, it spurs relevant governmental organisation. However, it has been
stakeholders to pursue a diplomatic approach to criticised for negligence of public voices in the
solving disagreements. basin community and concentrating exclusively
In the Five-Year Plan of Action on Mekong– on states’ interests in water governance (Schmeier
Lancang Cooperation (2018–2022), MLC mem- 2013). In 2003, the MRC’s Public Participation
ber states reached a consensus on enhancing Strategy was issued, stating that ‘stakeholder
cooperation in the fields of disaster prevention involvement in decision-making about sustain-
and mitigation as well as humanitarian assis- able development is fundamental to achieving
tance—ensuring food, water, and energy secu- feasible, equitable and lasting solutions’ (MRC
rity—while exploring various solutions for 2003c: 3). This was buttressed by the issuance
supporting people affected by disasters and the of the 2009 Communication Strategy, which
impacts of climate change (Lancang–Mekong emboldens people to access strategic documents,
Cooperation China Secretariat 2018). These tar- the minutes of Council meetings, programme
gets are concretised through a series of actions, documents, work plans, and functional data and
including deepening Lancang–Mekong River research products (MRC 2009). This extends to
5 Sustainable Water Resource Development in the Lower Mekong Basin: Synergies and Trade-Offs… 77
‘para-diplomacy’, which refers to the involve- term environmental and economic impacts for
ment of constituent units (regions) of (multi) the countries in the Lower Mekong Delta, such as
national states in water diplomacy and helps lack of water, loss of sediment, and unexpected
enhance the effectiveness of water governance by changes in the ecosystem. While the MRC is the
engaging various actors’ interests. The benefits of most capable institution and has the mandate for
establishing and strengthening partnerships with water resources management, China has refused
epistemic community groups for capacity devel- to be a member of the MRC and thus its actions
opment and knowledge enhancement should in the upstream are not bound by the MRC’s
also be appraised. The current Integrated Water rules and requirements. Second, the countries in
Resources Management (IWRM) tools used in the lower Mekong region have limited economic
the Mekong and the water resources procedures capacity to invest in regional programmes and
of the Mekong River Commission (MRC), is an thus rely on external support. Mekong countries
exemplification of how a new approach to river lack ownership over the funding and sometimes
basin governance proposed by an epistemic control of the development projects. This form
community was acquired and put into opera- of cooperation makes them voiceless and power-
tion by an interstate institution. In addition, in less in asserting their own regional and national
February 2020, the MRC organised the ninth interests vis-à-vis the geopolitical agenda of
MRC Regional Stakeholder Forum focusing on their development partners. The involvement
the Luang Prabang hydropower project (for other of regional powers and their competing inter-
examples see ADB 2003). Such polycentric gov- ests have complicated the Mekong cooperation
ernance would not only vigorously boost robust dynamics beyond the control of Mekong coun-
river management through the diversification of tries (Bosba 2018). Third, except for the MRC,
problem solving, but also help achieve a greater which is an organisation, all other mechanisms
sense of accountability and legitimacy (Sovacool are just forum-type policy consultation platforms
2011). for country leaders or specialists. There are no
common rules for the use of water in the region,
no mechanism with binding rules, and no dispute
6 Conclusions and Policy settlement mechanism. Fourth, the presence of
Implications so many cooperative mechanisms in a subregion
of six countries inevitably leads to the overlap-
All the scenarios examined in this chapter present ping and duplication of cooperative efforts. Fifth,
significant trade-offs and trans-boundary ten- there exist differences in the interests of Mekong
sions. For instance, a dam in one location has countries as well as amongst the external part-
direct affects on fish catch production and these ners, especially in the field of water resources
impacts are unevenly distributed in the LMB management. Due to the pressure to speed up
countries. These conflicts are seen as “food secu- economic growth, the sustainable development
rity” for the poor rather than an economic prob- aspect in many Mekong countries has not been
lem, because all scenario yields profitable NPV paid enough attention; the ‘power-shed’ mindset
to all countries, but the question is how those is still dominant amongst regional policymak-
benefit will be redistributed to the vulnerable ers. Finally, power politics and the trust deficit
resource users. amongst riparian countries and partners makes it
Although some positive outcomes have been difficult to coordinate amongst different mecha-
achieved, subregional cooperation platforms nisms for common goals.
show limitations. First, despite the existence of Looking ahead, to take advantage of existing
more than 10 cooperative mechanisms, coopera- mechanisms and overcome the above-mentioned
tion on water management in the Mekong falls far limitations, it may be advisable for riparian coun-
below expectations. Dams have been built on the tries and partners to consider the following
river mainstream, causing irreversible and long- recommendations:
78 H. Phoumin et al.
• Rule-based Governance of Water major partners such as ADB, the US, Japan,
Management: Riparian and partner countries Korea, and the European Union are important
should promote more rules-based governance as they can provide the resources, technology,
of water management in regional cooperation and knowledge to serve regional economic
for water management by (a) encouraging development; and assist in seeking long-term
riparian countries to adhere to international and fundamental technology and policy solu-
law on water management; and (b) establish- tions for sustainable development and envi-
ing common standards and rules for IWRM, ronmental protection. In addition, the
such as a code of conduct for the Mekong Association of Southeast Asian Nations
River basin. This code of conduct would help (ASEAN) should play a more central role in
alleviate and prevent tensions in transbound- facilitating policy coordination and paving the
ary water management. It should consist of way for elevating water governance and diplo-
three main components: confidence building macy in the Mekong River basin to a regional
measures, preventive diplomacy, and dispute agenda.
resolution mechanisms. Communication via a • Water-use cooperation: The member coun-
hotline, early warning, and the use of effective tries should envisage the future changes that
diplomatic staff are very important to prevent will have significant impacts on water
resource conflicts between riparian countries. resources management in the Mekong basin,
• Implementation of the 1995 Mekong especially what the changes will be and the
Agreement: The member countries should spatial distribution patterns of such changes.
embrace the implementation of the 1995 Riparian countries should also find alternative
Mekong Agreement through the five proce- development opportunities that are less depen-
dures and their technical guidelines, as they dent on hydropower and extensive water use
will be the IWRM -based rules for water production. Cooperation should be promoted
resources development to provide the most amongst Mekong riparian countries regarding
benefit and minimum environmental and the equitable and sustainable use of the
social harm. The implementation of the five Mekong River’s resources, including water
procedures will support the national and resources, on the basis of harmony of interests
regional development objectives for sustain- and with the aim of achieving sustainable
able development. development for the entire Mekong River
• Regional Coordination and Data-sharing: basin.
Members and partners should help strengthen • Manage Trans-Boundary Conflicts: Any trans-
the role and capacity of the MRC as a hub for boundary issues/conflicts should not be looked
water management and coordination amongst on as exclusively negative. Healthy conflict
other mechanisms in the field of water man- management can lead to growth and innova-
agement; and strengthen the implementation tion, new ways of thinking, and additional
of the MRC procedures and technical guide- management options. However, it is important
lines. Information exchange and data sharing to understand transboundary conflicts clearly,
at all levels should be strengthened through i.e. the fish losses and environmental damage
bilateral and multilateral channels for regular which impinge on social and food security.
updates, especially regarding new develop- Then, the negative impacts or conflicts could
ments in the basin. Data sharing is crucial in be effectively managed by reaching a consen-
both the rainy and dry seasons for equitable sus that meets the needs of all stakeholders.
water resources management and disaster pre- The goal is for all to ‘win’ by having at least
vention and management. Riparian countries some of their needs met.
should coordinate to promote synergy amongst • Transparency and Public Consultation:
Mekong regional cooperative mechanisms. In Transparency and public consultation are
the field of water resources management, amongst the keys to the success of transbound-
5 Sustainable Water Resource Development in the Lower Mekong Basin: Synergies and Trade-Offs… 79
Uche Abamba Osakede
and Oluwayemisi Kadijat Adeleke
highly vulnerable to economic changes and their the region is characterized by poor infrastructure
government had reduced ability to provide sup- development and very low human development
port to the economy in the event of a recession indices (UNDP 2016). The inadequate and poor
(Onyekwena and Amara 2019). performing infrastructure is recognized as a
Borrowing can be beneficial particularly in major obstacle to reaching higher growth rate and
economies with substantial development chal- achieving sustainable development (Khan et al.
lenges such as those in the African region. This 2020; Zolfaghari et al. 2020).
would mean that borrowed funds are used to In this paper, we examine the role of public
finance growth-enhancing investment in areas external borrowing on infrastructure and human
such as infrastructure, health care, and education. development in Africa with findings also shown
Government borrowing can also be appropriate for debt effect on economic growth. This paper
as part of temporal counter-cyclical fiscal policy; focuses on the debt growth nexus to contribute to
to boost demand and other economic activity in literature evidence in this regard as there is yet no
economic downturns (Kose et al. 2020; consensus among researchers regarding the non-
Ndoricimpa 2020). However, high government linear relationship. We explore whether the non-
debt can limit the size and effectiveness of fiscal linear relationship that often characterize debt
stimulus during downturns, weigh down produc- and growth is observed in the debt-infrastructure
tivity enhancing investment and hence dampen and debt-human development nexus. We exam-
long-term growth investment (Kose et al. 2020). ine the nonlinear impact of debt on infrastructure
The negative effect of government debt is and human development as well as economic
observed not only in developed but also develop- growth using the Panel Threshold Regression
ing economies (Intartaglia et al. 2018). (PTR) model introduced by Hansen (1999). This
The empirical relationship between govern- method has the advantage of estimating the debt
ment debt and GDP has often been characterized threshold level from the sample rather than
by an inverse U-shaped relationship such that selecting them arbitrarily.
positive debt impact is observed on economic This paper contributes to the literature on
growth until the point where the debt to GDP debt and sustainable development in a number
ratio exceeds a threshold level and a negative of ways. First, this study contributes to the scant
impact is experienced. Despite the consensus literature on the debt infrastructure and HDI rela-
among most researchers about the existence of tionship in Africa. Second, the focus on the role
this relationship, there is no clarity about the spe- of public borrowing on infrastructure and the HDI
cific threshold where government debt to GDP gives empirical insight to whether public borrow-
ratio starts to exhibit negative influences on eco- ing in the African region increases the chances
nomic growth, and the extent of the negative of debt repayment and does not undermine the
impact on growth (Alzahrani 2018; Baum et al. income potential of future generation in creating
2013; Eberhardt and Presbitero 2015; Siddique an enabling environment for increased produc-
et al. 2016). There are also suggestions that gov- tive capacity and income. Third, to the best of
ernment debt does not have significant effect on our knowledge, this study is the first to investi-
economic growth in developed and developing gate the debt infrastructure and HDI relationship
economies (Schclarek 2004). in Africa, exploring whether a nonlinear effect
While studies in the literature have commonly exists. Fourth, we contribute to the extant litera-
focused on the role of public borrowing on eco- ture discussion on the debt-growth link in Africa.
nomic growth, not much is known about the rela- Our study is divided into five sections. Section
tionship that characterize debt and potential two, provides the review of literature. Section
drivers of inequality and sustainable develop- three shows the methodology applied. Section
ment mainly in terms of infrastructure and the four presents the empirical results and discussion
human development index. Focus on this rela- of findings while section five covers the study
tionship is motivating specifically for Africa as conclusion.
6 Government Borrowing, Infrastructure and Human Development in Africa: A Panel Threshold Approach 83
simple descriptive statistics (Rogoff and Reinhart opment have also been examined by Zaghdoudi
2010). The simplest and the most common (2018) for a panel of 95 developing countries,
method applied for testing non-linearity is with with evidence indicating the existence of a non-
the use of a quadratic term in the growth regres- linear relationship between external debt and the
sion (Checherita-Westphal and Rother 2012). HDI.
The spline regression has also been used in this The extant literature mainly covers the thresh-
regard. Kumar and Woo (2010) made use of the old effect of debt on growth and is scant with
spline regression for a sample consisting respective findings for infrastructure and human
advanced and developing countries to determine development. Besides, the existing literature
the turning point of public debt to GDP ratio. examining the debt, infrastructure and human
The use of quadratic term in the growth equa- development relationship are not very common.
tion to capture the turning point between debt and
growth is criticized based on exogenous determi-
nation of thresholds (Karadam 2018). To over- 3 Methodology
come this challenge, non-linear panel data
method specifically the Panel Threshold 3.1 Empirical Model
Regression (PTR) is often preferred. This method
allows estimating the debt threshold level from We analyze the debt-infrastructure relationship
the sample rather than selecting them arbitrarily empirically using the baseline linear specification
(Hansen 1999). However, in PTR model, obser- stated as:
vations are mostly divided into a small number of
INFit i Debtit Z it it (6.1)
(mostly two) distinct regimes depending on the
values of threshold variable. There is also the where INFit is infrastructure, and Debtit is gov-
Panel Smooth Transition Regression (PSTR) ernment external debt to GDP ratio in country i at
model developed by Gonzalez et al. (2005). The time t for i = 1, …, N and t = 1, …, T. μi repre-
PSTR model, has essentially the same features as sents individual fixed effects, while βZit is the
the PTR model but allows the regression coeffi- vector of control variables. We include four con-
cients to change gradually when moving from trol variables that potentially affect infrastructure
one group to another. The threshold regression in an economy; GDP per capita, trade in percent
approach was applied by Chang and Chiang of GDP, population growth and globalization. We
(2009), to investigate the nonlinear relationship expect to see a positive effect between debt to
between government debt ratio and growth for a GDP ratio and infrastructure where borrowed
sample of 15 OECD countries for the period funds are efficiently utilized to promote invest-
1990–2004. Minea and Parent (2012) also made ment in infrastructure. This effect may however
use of this approach to examine the nexus disappear and turn negative with high debt bur-
between debt and growth. Karadam (2018) made den suggesting that the threshold effect exists.
use of this approach in examining the debt growth We also expect to see positive effect of increase
relationship using unbalanced panel of 135 coun- in GDP per capita on infrastructure assuming
tries (24 industrial, 111 developing) for the period higher infrastructure investment accompanies
1970–2012. Among other things, findings showed increase in macroeconomic income. Increase in
that the direction of the effect of public debt on trade volume is generally observed where coun-
growth changes smoothly from positive to nega- tries operate open border policy. In this case the
tive depending on the level of indebtedness. The ease of movement of goods across countries and
debt threshold was also shown to be lower for knowledge transfer aids production techniques
developing countries implying that public debt and rise in income invariable suggesting higher
can hurt growth at lower levels of debt for those investment generally plus spending on infrastruc-
economies relative to advanced countries. ture. Increase in population relative to income
Findings for the threshold effect of debt on devel- induces a strain on fiscal spending and hence is
6 Government Borrowing, Infrastructure and Human Development in Africa: A Panel Threshold Approach 85
expected to impact negatively on investment in on the HDI (IMF 2001; UNECA 2013).
infrastructure. More globalized economies have Population growth induces a strain on fiscal
the potential for improved infrastructure through finance in health and education and hence may
improvement in knowledge base and technology. negatively influence the HDI. Improved infra-
We examined the model for debt-human structure is expected to positively influence HDI
development relationship using the linear specifi- as it raises the potential for increase in income,
cation model stated as: literacy and health. Globalization generally,
erodes national boundaries, integrates national
HDI it i Debtit Wit it (6.2)
economies, cultures, technologies and gover-
Where HDIit is the human development index nance. This process influences the health condi-
used to capture human development, and Debtit is tion of a population in terms of better technology
government external debt to GDP in country i at transfer. The erosion of national boundaries also
time t for i = 1, …, N and t = 1, …, T. μi repre- has impact on the level of literacy, progressive
sents individual fixed effects, while βWit is the societal change and income potential of a coun-
vector of control variables. Additional control try. Hence globalization is expected to have
variables include per capita income, gross invest- strong effect on the HDI.
ment, trade openness, population growth, infra- To empirically analyze debt-growth relation-
structure and globalization. ship, the baseline linear specification for growth
We measure the level of overall human devel- regression can be written as:
opment, using the human development index
GDPit i Debtit Wit it (6.3)
(HDI), which was developed by the United
Nations Development Program (UNDP) in 1990, Where GDPit it is real GDP per capita, and Debtit
aiming to provide a yardstick of human develop- is government external debt to GDP in country i
ment of all member countries of the United at time t for i = 1, …, N and t = 1, …, T. μi repre-
Nations. Thus we used HDI and its component sents individual fixed effects, while θWit is the
indexes as a dependent variable because its prin- vector of control variables. In line with earlier
ciples are reflected in the SDGs framework as it studies showing a link between debt and growth,
also sets health- and education-related goals we include variables measuring growth specifi-
together with income or poverty goals (Sapkota cally gross fixed investment, trade openness,
2014). infrastructure and globalization. We expect to
Increase in debt to GDP ratio is expected to see a nonlinear effect between debt and eco-
raise the HDI where borrowed funds are effi- nomic growth as shown generally in the litera-
ciently utilized to stimulate consumption, health ture. It is also expected that a rise in income of
care use and investment in education. This effect production factors that accompany increase in
may turn negative where a threshold effect exists investment, will lead to a rise in per capita
between debt and HDI. Increase in income should income. The effect of trade openness on income
ordinarily translate to higher consumption as cannot out-rightly be defined as it will depend on
well as spending on other components of the the competitiveness of domestic products in the
HDI. In the same way, rise in investment should international market. The effect of globalization
also raise income as well as the HDI. Trade open- is expected to be positive as increased rate of
ness is expected to induce improvement in human societal improvement that comes with globaliza-
condition, by expanding the range of people’s tion can induce better production methods and
choice, influx of improved technology and raise the potential for improved industrial
knowledge transfer. However where there are activities.
limitations to harnessing the benefit of trade such In line with Hansen (1999) eqs. (6.1)–(6.3) are
as shortage of physical infrastructure and poor examined using the fixed-effect panel threshold
competitiveness of domestic firms, trade open- model. To do this, we first fit a single-threshold
ness may not induce the expected positive effect model and examined the boot-strap results.
86 U. A. Osakede and O. K. Adeleke
Where the F-statistic is significant, we reject the lin- Here, γ1 and γ2 are the thresholds that divide the
ear model and fit a double- or triple-threshold equation into three regimes with coefficients β1 β2
model. The choice of fitting a double or triple and β3. In the case that we reject the null hypoth-
threshold is determined by the probability value of esis in a single-threshold model, then we must
the F-statistic for the threshold effect test from the test the double-threshold model. The null hypoth-
bootstrap result. We examined the PTR rather than esis is a single-threshold model, and the alterna-
the PSTR as the latter is essential same as the PTR tive hypothesis is a double-threshold model. The
but only differs in terms of examining a smooth F-statistic is again used to determine the pre-
transition. Our interest is not whether the transition ferred threshold. We use the F Test approach to
is smooth or not but mainly to determine the nature test the existence of threshold effect. The specifi-
of the relationship between debt, infrastructure and cation of the F-test is similar to that earlier pre-
HDI and whether the association is linear or nonlin- sented. The procedure continues until the
ear as commonly shown in the debt growth nexus. appropriate threshold is determined using the
For each equation specified for infrastructure, F-statistic.
HDI and growth, we first fit a single-threshold
model in the form;
3.2 Data Source
yit Xit qit 1 Xit qit
(6.4)
2 i it The data for external debt as a percentage of
GDP, real GDP per capita, investment, popula-
Where the variable yit is the dependent variable, tion growth and trade openness (trade to GDP
qit is the threshold variable in this case external ratio) are obtained from World Development
debt, γ is the threshold parameter that divides the Indicators provided by the WorldBank (2019).
equation into two regimes with coefficients β1 Data for infrastructure index is obtained from the
and β2. the parameter μi is the individual effect, African infrastructure index provided by the
while εit is the disturbance term. African Development Bank ADB (2018) while
Testing for a threshold effect is the same as that for the Human development Index is obtained
determining whether the coefficients are the same from the Human Development Data provided by
in each regime. The null hypothesis and the alter- the United Nations Development Program. We
native hypothesis (the linear versus the single- made use of the Konjunkturforschungsstelle
threshold model) are (KOF) index of globalization introduced by
Dreher (2006) because of its comprehensiveness
H 0 1 2 ; H a 1 2 (6.5)
and data availability. Based on time period for
The F-statistic is constructed as which data is available for all the variables of
interest, the study covered the period 1990 to
S S
F1 O 2 1 (6.6) 2019.1 The analysis was carried out using Stata
16 software.
Under H0, the threshold γ is not identified, and
F1 has nonstandard asymptotic distribution. SO is
the RSS of the linear model.
In the case of a multiple thresholds, we fit the
model sequentially. For a double-threshold model
for instance, the specification is stated as: We dropped 5 countries with missing data for debt from
1
Table 6.3 Fixed-effects (within) regression results. Our result show that the threshold effect between
Dependent variable: index of infrastructure external debt and the HDI does not exist in the
Variables FE regression estimates African region. We therefore fit a fixed effect
External debt/GDP 0.000596 (0.00185) model based on the hausman test statistic. We
GDP per capita 0.00164*** (0.000143) controlled for other variables that influence HDI
Trade/GDP 0.680 (0.825) in the model. Findings for the fixed effect model
Population growth −0.821*** (0.236) are shown in Table 6.5.
Globalization 0.722*** (0.0314) Contrary to expectation, we find negative
Constant −18.81*** (1.635) effect of borrowing on HDI. With a 1% increase
Observations 1470
in external debt/GDP, the index of human devel-
Number of id 49
opment falls by approximately 0.01%. This sug-
R-squared overall 0.5302
Hausman 17.23
gests that external debt does not improve welfare
Prob>chi2 = 0.0041 in Africa and that borrowed funds are not invested
Note: Fixed effect estimates reported with standard errors in sectors that promote human development such
in parentheses as health and education. The chance of increase
***p < 0.01, **p < 0.05, *p < 0.1 in inflation rate that accompany unproductive fis-
cal spending of borrowed fund can also account
for the negative effect of external borrowing on
In Table 6.4, the single-threshold model esti- HDI as rise in prices reduces consumption basket
mator is 287.5681 with 95% confidence interval accessible by individuals and households. Similar
[265.2056, 309.9744]. The F statistic is insignifi- finding of negative effect of external borrowing
cant suggesting a linear relationship rather than a on the HDI was observed by Imide and Imoughele
U-shaped effect of debt on HDI. We therefore, (2019) with evidence provided using country
reject the single threshold model and fit a linear data for Nigeria. Findings by Zaghdoudi (2018)
model. This result is however contrary to findings also showed negative effects of external
by Zaghdoudi (2018) showing the existence of a borrowing on the HDI using panel data set for
nonlinear relationship between external debt and developing countries but this is only beyond the
the HDI for a panel of 95 developing countries. debt threshold value. The result further showed
6 Government Borrowing, Infrastructure and Human Development in Africa: A Panel Threshold Approach 89
Table 6.6 Threshold effect test: Dependent variable GDP per Capita
Threshold variable: external debt
Model (threshold) Threshold Lower Upper
Th-1 (single) 37.2698 36.3882 37.5961
Th-21 (double) 120.8353 118.4511 121.3882
Th-23 (triple) 37.2698 36.1274 37.5961
H0 (linear model) 80.63 (0.0800)
Ha (single threshold model)
H0 (single-threshold model) 160.01 (0.0033)
Ha (double threshold model)
H0 (double-threshold model) 53.65 (0.6700)
Ha (triple threshold model)
Note: F-statistic reported for hypothesis test with p-value in bracket
ment to attain any form of sustainable develop- Dreher, A. (2006). Does Globalization Affect Growth?
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Lives, Livelihoods
and Environment: The Challenge 7
of Sustainable Development Goals
in India
Vijay Mahajan and Jeet Singh
demic, has impacted India’s ability to invest in the level of investments required and explores
SDGs related to the lives and livelihoods of some new ideas to increase the resource base and
Indians and India’s environment. In particular, diversify it beyond just the government’s budget-
SDG 3 (health), SDG 4 (education) and SDG 5 ary resources. We end on an optimistic note that
(gender equity) deal with the “lives” of Indians, if indeed the required policy correctives are
SDG 1 (no poverty), SDG 2 (zero hunger), SDG made, there is still a decade to achieve the various
8 (decent work and economic growth) deal with SDGs related to improvement in the lives, liveli-
their livelihoods and SDG 13 (climate action), hoods of Indians and the environment of India.
SDG 14 (life below water) and SDG 15 (life on
land) deal with the environment.
We worry that, on the one hand, the financial 2 J al, Jangal, Jameen, Janvar,
distress caused by such crises triggers coping Jalvayu—The Basis of Lives
strategies by the poor, which may put stress on and Livelihoods
the environment (such as overuse of common
property resources). On the other hand, due to fis- Agriculture with its allied sectors such as live-
cal stress, governments are not able to sustain, let stock and fishery is the major source of livelihood
alone extend, social safety net programs. So, for India’s population (FAO 2020). Agriculture
when both the poor are in distress and the govern- provides basic livelihood to 263.1 million people
ments are fiscally stressed, what can be done? which accounts to 58% of total workforce of the
The Indian Prime Minister has responded with a country (IBEF 2020).
slogan that the nation should become “Atma
Nirbhar” (self-reliant), which also means that the
people have to depend a lot more on their own 2.1 Jal—Water
means.
We take inspiration from the Sendai Agriculture is dependent on water supply—pri-
Framework for Disaster Risk Reduction 2015– marily rainfall, and then from its storage in sur-
2030 (UNDRR 2020). This framework calls for face structures as well as in underground aquifers.
all-inclusive collective action from private stake- Reduction in rainfall in many regions over the
holders—both communities and corporate, while last few decades, coupled with peak seasonality
unambiguously stating the primary role of the of rain in other regions, causing floods and run-
state. We believe the same approach needs to be off to the sea, has led to the paradox of water
taken for the SDGs. All stakeholders—individu- excess and scarcity in the country, sometimes in
als, communities, associations, companies and the same month across regions and definitely
other private agencies at various levels need to across months in the same region. India has 20
contribute to the effort to achieve the SDGs by large and small river basins, but as per the
2030, the government has to be the primary Falkenmark Index, 12 river basins are water
player and financier. scarce with less than 1000 m3 water per capita
This paper highlights the importance of twin per annum. Furthermore, the water demand in the
strategies to achieve the SDGs in India. These country is expected to increase by 34% by 2025
involve investing in (a) improving the lives and and over 78% by 2050 (India. IITM n.d.). India’s
livelihoods of India’s population, which is in the gross irrigated crop area of 82.6 million hectares
first decade of the demographic dividend phase, (mha) is the largest in the world. This went up
and (b) regenerating the degraded natural from 22.6 mha in 1951 (India. Ministry of
resources of India—the Jal, Jangal, Jameen, Agriculture and Farmer Welfare 2019). In the
Janvar aur Jalvayu– water, forests, land, live- first two decades 1950 to 1970, the increase was
stock and wildlife and jalvayu—the climate. The due to dam fed canal irrigation systems. Since
latter will in turn improve the lives and liveli- then, a large part of the increase is based on
hoods of Indians. The paper presents estimates of groundwater extraction through borewells and
7 Lives, Livelihoods and Environment: The Challenge of Sustainable Development Goals in India 95
that poses severe problems of environmental total degraded and deserted land accounts for
sustainability. 82.6 mha of forest, non-forest and agriculture
land spread across the country. Disturbingly, the
degradation of land resources increased from
2.2 Jangal—Forest 81.46 mha in 2003-05 to 82.62 mha in 2011-13
(India. Indian Space Research Organization
India’s forest land has also gone through signifi- 2016).
cant changes in the last three decades. The share
of tropical wet evergreen forest has decreased
from 8% of total forest land in 1987 to mere 2.6% 2.4 ivelihoods and Jal, Jangal,
L
in 2019 (FAO 2003; FSI 2019). Tropical moist Jameen
deciduous, sub-tropical pine forest and sub-
tropical dry evergreen forest recorded decline in The degradation of natural wealth has further led
area during this period. to rural deprivation and loss of livelihood leading
Agricultural and livestock rearing are both very to mass distress out migration from villages. This
dependent on forests, to ensure well-distributed interconnectedness is not a new revelation, as it
rainfall as well humus content in the soil. Thus has been well-studied both from economic and
forests are a critical resource for the majority of ecological perspectives across the globe.
people living in this sub-continent indirectly. But McLeman (2017) in his working paper for the
for many the dependence is more direct. Out of UNCCD argued that the degradation of natural
a total of 600,000 plus villages in India, nearly resources especially land is a major push factor in
173,000 villages are located in and around for- the rural-urban migration. He also observes that
ests (TERI 2018). These villages are dependent this push factor is further mediated by social,
on forest for collecting non-timber forest produce economic, demographic, political and environ-
(NTFP), fuel, fodder, cattle grazing, water, timber mental factors.
etc. These forest dependent villages have over 200 As per the national census data, the total num-
million people living in them. ber of migrant population has increased from 315
million in 2001 to 456 million in 2011. A sub-
stantial number in this population moved from
2.3 Jameen—Land rural areas to cities in the search of jobs. In the
erstwhile natural resource dependent forest areas,
Currently, agricultural land accounts for nearly the local tribal population sees migration in as
49% and forest land comprises 23% of the total many as 60–80% households.
landmass (India. Ministry of Statistics and
Program Implementation 2016). However, dras-
tic changes were recorded in the quantity and 3 Investment Required
quality of agricultural land and forests in India in Sources for SDGs
the last few decades. The degradation of these
basic resources adversely affected other natural As stated above, India needs to invest in improv-
resources such as water, wildlife, biodiversity ing the lives and livelihoods of India’s youthful
and climate. population with a median age of 27. For this,
India’s cultivable land area of about 160 mha greater investments need to be made in health and
is the second largest in the world, after the United education and in regenerating the degraded natu-
States. Between the 1950s and 2020, the cultiva- ral resources—water, forests, land, livestock and
ble land area has gone up about 8–10 mha. wildlife and the climate. In addition, direct
Desertification is another major challenge that investments will have to be made in infrastruc-
India’s landmass is facing. About 29.3% of the ture and promotional activities related to people’s
total 328.7 mha is degraded and deserted. The livelihoods.
96 V. Mahajan and J. Singh
Educaiton Health
3.5
2.8 2.8 2.8 2.8 2.8 3
1.8
1.3 1.4 1.4 1.4 1.5
1.2
Fig. 7.1 Public investment on health and education (per cent of GDP). Source: India. Ministry of Finance (2021a).
Economic Survey, 2020-21 (Vol. 2)
Employment Guarantee Scheme (MGNREGS) is investments have not had a full positive impact
said to be the world’s largest such program. on employment creation.
Cumulatively, since 2006, the program under
MGNREGS has generated 31.3 billion person
days of work with a total expenditure of INR 6.27 3.3 For Environmental
trillion, thus becoming the number one ranked Regeneration
public employment program in the world. Yet,
this has not been enough to curb rural-urban The COVID pandemic provided a platform to
migration. many global and national institutions to amplify
Thus the urban informal sector is the next ref- their voice to advocate nature based solutions to
uge for landless and marginal farmers seeking transform economies (Singh 2020). The
work away from the village. In cities, they work Adaptation Gap Report, 2020 released by UNEP
as manual labourers in construction, transport, reiterated that nations require investing more on
retail trade, security and myriad urban menial climate action. The report suggests that develop-
services. Unfortunately, the working conditions ing countries require annual 140 billion USD to
and remuneration levels remain very poor and 300 billion USD by 2030 for climate adaptation
enforcement of minimum wages or social secu- (UNEP 2021). This cost is high compared to their
rity legislation is difficult due to the highly dis- size of economy, but essential to survive in
persed nature of employers as well as the high extreme climatic changes. The degradation of
mobility of workers across employers. natural capital for economic growth has both eco-
Self-employment in the non-farm sector as the logical and economic cost.
major source of livelihood for a majority of the According to a study carried out by The
population remains a distant goal. India has been Energy and Resource Institute (TERI) in 2018,
investing proactively to create jobs through sup- the land degradation through various processes in
porting non-farm self-employment initiatives. India cost around 2.5% of the country’s GDP (at
There are many credit based schemes at the cen- 2014-15 price). The study further concluded that
tral and state level. Over the years, investment in India needs INR 2.95 trillion (2014-15 prices) to
these schemes has also increased. The allocation reclaim the already degraded/deserted landmass
for credit-based MUDRA scheme has also of the country (TERI 2018). However, the actual
increased substantially between 2015–16 and expenditure of the Government of India for
2021–22 (MUDRA 2021). Yet, these enhanced resource regeneration is much lower. The
98 V. Mahajan and J. Singh
National Biodiversity Authority in 2019 calcu- In a recent overview paper for the State of
lated that INR 0.28 trillion was spent in 2016-17 India’s Livelihoods Report, 2020 (Mahajan
on regeneration of biodiversity. The report fur- 2021), one of the authors estimated that India
ther estimated that various public schemes related needed to generate 120 million new livelihoods
to sustainable environment require yearly invest- in the 2021–30 decade. Further he estimated the
ment of INR 1.16 trillion (India. National funds required for this at INR 120 Trillion, to be
Biodiversity Authority 2019). invested in the first 6 years of the decade, to
ensure optimal results by 2030 (Table 7.1).
The total investment is estimated to be INR
3.4 Overall Requirement 120 trillion, which is about 60% of India’s GDP
of Financing and where Can it in 2020–21, which fell by about 8% from the pre-
Come from vious year due to the pandemic. However, the
Indian economy is seeing a V shaped recovery in
India has been struggling to balance its overall rev- 2021 and thus it should be possible to make these
enue and expenditure. The Fiscal Responsibility investments. Indeed, these investments will act as
and Budget Management Act, 2003 sets a target to a booster for inclusive economic growth.
keep the fiscal deficit at 3% of the GDP. However, The investment levels in the economy are
successive union governments have used escape likely to go up from the current 30% of the GDP
provisions of the Act to breach this target. Recent and government expenditure will also go up as
fiscal deficit estimations are alarming. As per the the tax to GDP ratio rises. As the investment has
revised estimate for 2020-21 the fiscal deficit will to be concentrated in the first 6 years of the
be as high as 9.5%. It is expected to decrease in decade to show results by the end of the 10 year
the next financial year i.e., 2021-22, however it period, it amounts to INR 20 trillion per annum.
will remain 6.8% of the GDP (India. Ministry Thus the investment in livelihoods for all needs
of Finance 2021a, b). The highly stressed public only about 10% of GDP per annum or about a
finance has the responsibility to invest more in third of the current annual investment in the
lives, livelihood and environment to attain SDGs economy, for the first 6 years of the current
in the next one decade. decade.
Table 7.1 Estimated need and possible sources of funds for livelihoods for all by 2030
Investment
required in INR Commu- Corpo- Banks and Corpo-rate
Trillion from Individual nity rate financial invest- Govt
Source of funds 2021 to 2026 House-holds collec-tives CSR institutions ments budget
Regeneration of 12 Minor Minor Minor Minor Minor Major
natural resources
Agricultural 8 Minor Medium Minor Medium Medium Minor
diver-sification
and value chains /
collectives
Infrastructure in 20 Minor Minor Minor Minor Medium Major
small towns
Education and 20 Medium Medium Minor Minor Medium Major
skill development
Health care 10 Medium Medium Minor Minor Medium Medium
Micro and small 50 Medium Medium Minor Major Medium Minor
enterprises in
non-metros
Total in INR 120 Only a small part of this investment is expected from the government.
trillion in the first Rest will come from other sources listed above.
six years
7 Lives, Livelihoods and Environment: The Challenge of Sustainable Development Goals in India 99
The faster and sustained recovery of Indian India has had a long history of systematically
economy after COVID-19 pandemic is a good addressing poverty through planned allocation
sign; however, often it puts higher pressure on of resources for poverty alleviation programs. At
natural wealth. The faster economic recovery the very base, to ensure food security, there has
after the oil crisis of 1973 and 1979, fall of USSR been a public distribution system for food grains.
in 1991 and Asian financial crisis in 1997 are few In 2013, this was made into a justiciable right
examples to mention here, which led to faster through the National Food Security Act 2013,
growth in the rate of environmental degradation under which as many 800 million persons get
(Mulchandani 2020). Therefore, the twin highly subsidised wheat and rice. Over the years,
approach suggested in the beginning of this paper other social safety net programs were added to
for greener economic recovery is important. take care of children, women, the elderly, the
The good news is that much of the investment disabled and so on.
is not expected from the Government. The rest The combination of higher economic growth,
will come from other sources listed above, with a compounded average growth rate of
namely Households, Community Collectives, 7.5% pa over 2000–2020, coupled with pov-
Corporate CSR, Banks/financial institutions, and erty alleviation programs mentioned above,
Corporate Investments. In the table above, we had dramatically brought down poverty in
have indicated that while the government will India. According to India’s Voluntary National
have to play a major role in financing of regen- Review (VNR) of Sustainable Development
eration of natural resources, infrastructure and Goals (SDG) at least 271 million people were
education and health, in agricultural diversifica- lifted out of multi- dimensional poverty from
tion and in micro and small enterprises, the main 2005–06 and 2016–17 (Pandey 2020). As per the
financing source will be households and banks/ global Multidimensional Poverty Index that was
financial institutions. released in July 2019, the number of people liv-
ing under multidimensional poverty decreased
to around 370 million in 2016–2017 from 640
4 et, the Government Has
Y million people in 2005–2006. This reduction of
to Continue to Be the Lead numbers in multidimensional poverty by 270
Financier million was historic and unprecedented, though
some of it has been undone in 2020.
We already spoke about the applying to the SDG India’s policy response to degradation of the
context, the Sendai Framework for Disaster environment is also nearly 50 years old and insti-
Risk Reduction 2015–2030.This framework tutionalised attempts to preserve natural wealth
calls for all-inclusive collective action from pri- especially land, water and forest in India started
vate stakeholders and governments, while in early 1970s, including nationwide pro-
unambiguously stating the primary role of a grammes such as for the development of drought
state. This fits well with the Indian situation. prone areas, desert areas, waste land and water-
The government has the primary respon- shed development programs were executed.
sibility to invest in wellbeing of human and These initial policies and programs have evolved
nature. The national commitment to work further in the last two decades and led to promul-
towards agenda 2030 is part of this responsibil- gation of new policies, laws and execution of
ity. Successive health and education policies in new programs.
India intended to invest 9% of GDP in these two The above mentioned major developments in
sectors, but the average has been around 4% of India indicate that the country recognized both
the GDP. Similarly, India’s investment to achieve the poverty and environmental challenges and
SDGs by 2030 requires investment equivalent to responded with significant public resources,
10% of its GDP, however, it is spending only despite being a developing (low per capita
about 4% (Jitendra 2019). income) country till 2015 and a lower middle
100 V. Mahajan and J. Singh
income country since then, as per the World In the case of healthcare, expenditure is 3.54% of
Bank classification. the GDP, of which 1.28% is the share of public
Despite good intentions, signing up on firm expenditure, the rest being private. What is worse,
commitments, and openness to new programs, out of the private expenditure as much as 65% is
practices and knowledge, India lags behind as it out-of-pocket, due to low coverage of health
has not been investing adequately in these goals. insurance. Therefore, the Economic Survey
There are a number of reasons behind the short- 2020-21 recommended an increase in public
fall in investment. These include a persistent fis- investment on healthcare services as envisaged in
cal deficit, a high dependence on government for the India National Health Policy 2017 (India.
financing and low returns on the investments Ministry of Finance 2021a, b).
made, due to poor execution, including, leakages, Households remain the largest single inves-
delays, and apathy. tors in livelihood promotion, whether by invest-
We argue, however, that public spending ing in natural capital, such as land and water
through grants alone is not enough to take care of development, or in human capital such as edu-
all the investment needs of the various SDGs cation and skill development, or in physical
related to health, education, poverty reduction, capital such as building and equipment. They
livelihoods and environmental regeneration. We also contribute to significant building of social
need to encourage individual households and capital in the form of collectives such as self-
community collectives to use loans to address the help groups, cooperatives and farmers’ producer
SDGs. We turn next to how to do this in the organisations.
Indian context. There were nearly 90 million farm house-
holds in India, of which only 20 million had an
income exceeding expenditure, as per NSSO
5 Additional Financing 2012–13. Thus these 20 million farm households
for SDGs on Lives, made an average investment of over INR 50,000
Livelihoods per annum per household. Unfortunately, a large
and the Environment part of the individual household investment has
gone into borewells, which provide an irrigation
5.1 Individual Household solution for a few years, but eventually deplete
Financing groundwater and thus do not have a positive
effect on the environment. The government can,
The concept of a human family is based on the by changing policy on groundwater use regula-
idea that the parents invest in their progeny, ini- tion, encourage farmers to do the reverse—invest
tially providing for all the needs from nutrition to in farm ponds, farm bunds and other water har-
shelter and later investing in food, clothing, edu- vesting structures, so as to capture rainwater run-
cation and healthcare. The National Sample off and recharge the depleted groundwater
Survey Office (NSSO) monthly per capita con- aquifers.
sumption expenditure data for 2011–12 indicated
that an average rural household expenditure on
education was 4.2%, and on health care was 5.9% 5.2 Community Financing
of their total expenditure.
In the case of education, India is spending on Community financing for education and health
education around 4% of GDP as a public expen- was well-established as a tradition. Earlier, a
diture and around 2.5% of GDP as private expen- large number of schools and hospitals were
diture; together it is spending around 6.5% of endowed by wealthy people and run on charitable
GDP on education (Motkuri and Revathi 2020). lines. Similarly creation and management of vil-
7 Lives, Livelihoods and Environment: The Challenge of Sustainable Development Goals in India 101
lage ponds, for domestic and irrigation purposes, 5.3 onor and CSR Financed NGO
D
village grazing lands, and village forests was in Efforts
the hands of the community with the ruler’s local
representative acting as an overseer. While some The donor and corporate social responsibility
funds did come from the ruler, there was a lot of (CSR) financing are important financial mecha-
contribution in terms of voluntary labour and nisms in India, especially for supporting innova-
materials. That tradition was eroded as the notion tive sustainable development ideas. The untied
of the welfare state took over after Independence nature of the fund largely handled by profession-
and the government took away all initiative from als makes these financial resources more impact-
communities and local elites. ful. Both CSR and national and international
During the COVID pandemic, several micro- donor financing have played an important role in
examples emerged, of efforts to create liveli- the development of the country. Moreover, the
hoods based on regeneration of natural size of the fund has also enlarged substantially in
resources in search of livelihoods. In many the last few years.
places, returnee migrants, when they came back According to a report, the domestic philan-
to their native villages, started working on thropic funding has increased from INR 125 billion
regenerating the degraded natural resources of in 2010 to INR 550 billion in 2018. Out of the total
their village, with the hope of staying back and domestic philanthropic fund, 60% came from indi-
making a living. (The Hindustan Times, 30th vidual donations (Dasara 2020). CSR expenditure
July 2020). was estimated at INR 192 billion in 2017-18 out of
For livelihood financing, apart from encour- which nearly INR 5.70 billion went for activities
aging loans from banks to families below the related to environment sustainability (India.
poverty line, the Government of India and National Biodiversity Authority 2019). In the
Reserve Bank of India encouraged National financial year 2019-20, 60% of the CSR fund was
Bank for Agriculture and Rural Development invested in sectors like health, education and pov-
(NABARD) to take up promotion of women’s erty reduction. Only 6% of the fund was invested in
self-help groups (SHGs) for savings and credit projects related to environmental sustainability.
as far back as 1992. This savings-led microfi- These donor funds, though much smaller than
nance model has now become the largest finan- government funds, play a very important role in
cial inclusion programme in the world covering testing innovative approaches to development
nearly 110 million households. Banks provide problems. For example, with donor funding from
bulk loans of average size of INR 246,000 to the Mafatlal family charity and German donor
SHGs to on-lend to their members for amounts funding, in 10 years, the NGO Bhartiya Agro
as small as INR 5000, though the average is Industries Foundation’s DHRUVA project in
close to INR 25000. Total bank loans outstand- Gujarat promoted wadis (homestead orchards) in
ing to SHGs on 31 March 2020 were INR 1.09 about 30,000 acres of degraded forest land and
trillion. In addition to the above channel of self- regenerated not just the entire region but also
help group loans being on-lent to individual poor revived the economy of the area. (Sawant and
households for income generation, microfinance Ajwani 2020). The idea was picked up by the
loans are also available to individuals for some National Bank for Agriculture and Rural develop-
economic activity such as dairy farming, food ment (NABARD) which has since then assisted
processing and handicraft production or running 552,755 tribal families with INR 23 billion of
a retail shop or a repair shop. In the year ending investment, mostly grants, by 31 Mar 2020 for
Mar 2021, microfinance loan amounts from Wadi type of projects, with support from the same
channels other than SHGs were nearly INR 1.7 German donor agency which worked on the BAIF
trillion. DHRUVA Wadi project.
102 V. Mahajan and J. Singh
products like solar PV, solar thermal, wind and need to be explored and promoted. This paper has
biogas (Mahajan 2021). This is the most appro- suggested some.
priate way to finance this work, rather than gov- At the same time, the public expenditure needs
ernment budgetary spending. to be made more efficient and outcome oriented.
Moreover, public expenditure should largely be
aimed at the disadvantaged groups. For example,
6 Conclusion expenditure on public financed professional edu-
cation is not as welfare promoting as the same
Natural wealth, especially land, water and forest expenditure on universalizing primary and sec-
is the backbone of Indian rural livelihood that ondary education. Finally, to ensure sustainabil-
feeds the majority of the poor and disadvantaged ity of the public investment, there should be an
population. However, all of these resources are element of cost recovery through user fees on an
depleting rapidly leading to mass distress out affordable basis.
migration from rural areas. The degradation of Thus the five mantras for ensuring that there is
natural capital is certainly an environmental con- adequate financing for SDGs in India are
cern but it has also adversely affected basic
human requirements such as health, education, (a) Enhance the tax to GDP ratio so that there
wage employment and agriculture in the country. are more resources for public expenditure
The SDGs pertinent to life, livelihood and envi- (b) Enhance the share of public expenditure on
ronment are highly entwined and therefore in a health, education, livelihoods and the regen-
country like India, an integrated approach is eration of natural resources
required to attain them. Given the interconnected (c) Increase the efficiency of public expenditure
nature of SDGs, cohesive policies, institutions to achieve more outcome for the same level
and finances is the need of the hour. In the Indian of expenditure
context the regeneration of natural capital such as (d) Increase the share of public expenditure that
land, water and forest must go hand in hand with specifically benefits the disadvantaged
mass job creation in the short run and promotion groups, so that it becomes more inclusive and
of sustainable resource-based livelihood in the equitable
long run. (e) Increase the sustainability of public expendi-
The huge shortfall in investment to achieve ture by charging user-fees.
SDGs on time is one of the biggest concerns that
further affect any attempt to address SDGs We end on an optimistic note that with a rise in
through an integrated approach. SDGs pertinent the investment level and resultant economic
to lives, livelihoods and the environment require growth over this decade, there will be a rise in the
annual investment of more than 15.5% of the tax to GDP ratio and this will enable increase in
GDP (3% health, 6% education, 2.5% natural public expenditure. Combining public expendi-
resource regeneration and 4% agriculture). While ture with individual, household, community and
all of this is not expected to come from the gov- private corporate expenditure in a synergistic
ernment, given the “public goods” nature of these fashion, it will be possible for India to achieve the
investments, even if the government bears two- SDGs by 2030.
thirds, it will completely consume all the tax rev-
enue. While successive governments have had
the intention to increase investment in human and References
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The Nexus of Structural
Adjustment, Economic Growth 8
and Sustainability: The Case
of Ethiopia
Steve Onyeiwu
© The Author(s), under exclusive license to Springer Nature Switzerland AG 2022 107
A. Antoniades et al. (eds.), Financial Crises, Poverty and Environmental Sustainability: Challenges
in the Context of the SDGs and Covid-19 Recovery, Sustainable Development Goals Series,
https://doi.org/10.1007/978-3-030-87417-9_8
108 S. Onyeiwu
four decades. They include Ghana, Mauritius, Botswana, The coup was said to have been motivated by the fact
2
South Africa, Tunisia, Morocco and Senegal. Quite often, that, compared with the newly independent African states,
those success stories quickly turn into disappointments, as Ethiopia was “far behind in economic development, edu-
in the case of Tunisia, Morocco, Ghana and South Africa. cation, and living standards.” (Clapham 1968, p. 502).
8 The Nexus of Structural Adjustment, Economic Growth and Sustainability: The Case of Ethiopia 109
The malcontent in the country eventually culmi- development paradigms from other countries
nated in the removal of the monarchy in 1974, (Clapham 2006, p. 137).
and its replacement by a socialist-oriented mili- After the introduction of a new constitution in
tary junta known as the Derg (Koehn 1975, p.12). 1994, Ethiopia adopted a parliamentary system
In doing so, however, Ethiopia skipped the criti- of government and held elections in 1995, usher-
cal capitalist epoch of historical materialism, a ing in a new democratic era in the country. Unlike
slip that would later weaken the economic foun- some African countries that implemented market-
dations of the Derg regime. With no capitalist based economic reforms under undemocratic
foundation, and imbued with a very weak indus- regimes, Ethiopia’s economic reforms came in
trial base, as well as an atrophied entrepreneurial tandem with political reforms and democratiza-
class, the state monopolized the economy, tion.4 The three major pillars of Ethiopia’s struc-
became omnipresent and overbearing. The results tural adjustment are summarized in Table 8.1,
of state control of the Ethiopian economy under and they include the following (Tashu 2003):
the Derg were as devastating as the economic
policies under the monarchy (Woldesenbet 2020, Fiscal Reform: A centerpiece of Ethiopia’s fiscal
pp. 76–77). The Ethiopian economy under the reform was to provide essential social ser-
Derg was characterized by agricultural stagna- vices, while reducing budget deficits (Tashu
tion, a crippling famine, chronic poverty, unem- 2003). Fiscal reform was also aimed at signal-
ployment, and lack of opportunities (Girma 1987; ing to the private sector that the government
Turner 1986). The Derg administration collapsed wished to pursue fiscal sustainability, and
in 1991 under the weight of economic crisis, assure the private sector that there won’t be
political instability and the pro-democracy fervor future tax increases to cover a bloated budget.
that swept across the globe in the later 1980s, fol- The maintenance of a healthy fiscal balance
lowing the abrupt demise of the Soviet Union. has often been a challenge for developing
The new administration that took over power countries. Of all the functions of government,
after the collapse of the Derg regime was led by service delivery (health, education, water sup-
Prime Minister Meles Zenawi, under the plat- ply, waste management, affordable housing,
form of the Ethiopian People’s Revolutionary etc.) is considered by the citizens as the most
Democratic Front (EPRDF) [Shewadeg 2019]. important. On the other hand, the provision of
Though an avowed Marxist, he embraced neolib- an optimal level of social services may require
eralism and began implementing economic and raising taxes, import duties and other levies
political reforms designed to shift the economy that hinder private sector development. Thus,
from state control to a market-based economy.3 Ethiopia’s fiscal reform focused on finding an
The reason for this change may be found in what acceptable balance between fiscal/financial
Clapham (2006) describes as the “politics of sustainability and optimal provision of social
emulation.” Since the mid-nineteenth century, services. It appears, however, that the
successive Ethiopian ruling elites have strived to Ethiopian government tilted the balance
promote economic development by copying toward private sector development. This is
manifested in the current situation in which
Ethiopia suffers acute housing shortages, poor
infrastructures, inadequate schools and health
Socialist-oriented regimes sometimes embrace neolib-
3
support, these regimes turn to the West and its affiliated port only economic reforms undertaken by democratic
multilateral financial institutions, who in turn demand regimes. Financial support is mostly conditioned on the
implementation of neoliberal policies as a quid pro quo implementation of political reforms, democratization and
for support. good governance.
110 S. Onyeiwu
Table 8.1 Fiscal, financial and external sector reforms in Ethiopia in the 1992/93–2000
Measures Instruments Goals
Fiscal Reform Reduction of public expenditures Revenue improvement
Increase in the number of goods attracting import duties Modest increase in
Broadening of the tax base expenditures
Rental income tax Reduction of overall deficit.
Customs tariff rate reduction
Monetary and Discontinuing with financial repression Removal of financial
Financial Reform Interest rates liberalization repression
Establishment of private commercial banks and insurance Mobilization of savings and
companies investment
Introduction of indirect monetary policies (example: Competition and efficiency in
introduction of treasury bill auctions) the financial sector
Introduction of a modern legal and institutional framework
for the National Bank of Ethiopia
External Sector Reduction of import tariffs Export promotion
Reform Liberalization of payment and exchange regulations Balance of payments
Currency devaluation equilibrium
Establishment of exchange bureaus
Introduction of import duty drawback system
Source: Summarized from information in Tashu (2003)
Monetary and Financial Reforms: The goal was As is typical of neoliberal policies, no explicit
to ensure a money supply growth rate that was provisions were made for the protection and
commensurate with the targeted level of eco- empowerment of vulnerable groups, or those
nomic growth, inflation and balance of pay- who might be hurt by reforms. It is implicitly
ments. Under these reforms, credit would be assumed that the development of the private sec-
allowed to grow to support the private sector. tor through liberalization would automatically
To incentivize both lenders and borrowers, benefit the poor and vulnerable. I evaluate the
and hence mobilize investible funds, the finan- veracity of this assumption in Sect. 4 of this
cial sector was liberalized to generate positive chapter.
interest rates. Perhaps more than any country, Ethiopia’s
External Sector Reforms: The main focus was to SAP has been supported by both bilateral and
achieve a desirable balance of payments out- multilateral donors in substantial ways, so much
come. This was to be accomplished through so that it has been the highest recipient of
export promotion, greater integration with the Overseas Development Assistance (ODA) in
global economy, import tariffs reduction, lib- Africa in the past two decades or so (Table 8.2).
eralization of exchange rates and payment With a total of 233 World Bank projects as of
systems, currency devaluation, import duty 2020, Ethiopia is amongst the top African coun-
drawback, and the establishment of foreign tries in terms of World Bank projects in Africa. A
exchange bureaus. crucial question, however, is whether Ethiopia’s
Privatization and Deregulation: To promote pri- structural reforms are sustainable without donor
vate sector development, market-based invest- support? It has been suggested that adjustment
ment and labor codes were introduced, while programs in Africa succeed only to the extent
regulations on land renting and licensing in that donors pump lots of funds into the economy
general were relaxed. With the exception of of an adjusting country. The next section evalu-
the telecommunications and airline sectors, ates the impact of SAP on Ethiopia’s economic
where the state still retains ownership, all growth.
other sectors were privatized.
8 The Nexus of Structural Adjustment, Economic Growth and Sustainability: The Case of Ethiopia 111
Table 8.2 Top 10 ODA recipients in Africa. Annual averages (USD million)
2010–15 Number of World Bank
(%share) 1970–79 1980–89 1990–99 2000–09 2010–15 Projects (as of 2020)
Ethiopia 6.7 398 1158 1344 2412 3582 233
DRC 6.2 815 1028 428 2266 3323 188
Tanzania 5.4 849 1717 1537 2265 2891 288
Kenya 4.8 587 1231 1001 1030 2599 281
Egypt 4.6 5262 3275 4450 1537 2463 ?
Nigeria 4.2 333 155 321 2761 2268 252
Mozambique 3.9 133 922 1651 1924 2111 179
Uganda 3.2 147 500 1043 1544 1694 241
Ghana 3.0 324 644 890 1301 1637 264
Morocco 3.0 942 1548 1187 974 1630
Source: OECD
Ethiopia has the largest livestock population smaller area of land to graze than many other
in Africa, as well as being the continent’s top African countries, which may result in over-
producer and exporter of livestock. Ethiopia grazing, destruction of the ecosystem and loss
exports livestock mainly to Saudi Arabia, of biodiversity (see Sect. 4). Ethiopia’s vibrant
Egypt, and the United Arab Emirates. Data livestock sector has spurred a virile agro-
from the Food and Agriculture organization processing industry that has led to the export
(FAO) show that Ethiopia has about 3.7% of of leather products –shoes, jackets, fur coats,
the world’s 1.5 billion head of cattle. bags, purses, belts, etc.
Specifically, Ethiopia has 54 million head of Apart from livestock, Ethiopia’s economic
cattle (or 0.5 cattle per person). What is growth has been boosted by coffee production
instructive is that Ethiopia’s cattle have a far and exports. As the largest exporter of coffee
8 The Nexus of Structural Adjustment, Economic Growth and Sustainability: The Case of Ethiopia 113
in Africa, coffee exports generated $2.9 bil- decades, for instance, China provided $86
lion during the 2017–2018 fiscal year, though million for the construction of a ring road in
it fell short of the $4 billion targeted by the Addis Ababa; $12.7 million for the Gotera
government. To boost coffee and other exports, Intersection; $800 million for the construction
the Ethiopian Central Bank devalued the cur- of Ethiopia’s first six lane highway, as well as
rency (Birr) by 15% in October 2017.8 the $4 billion Ethio-Djibouti Railway line.10
Services and Tourism: Financial services, tour- China constructed the Africa Union (AU)
ism, and real-estate have also been contribut- headquarters in Addis Ababa for $200 million,
ing to Ethiopia’s economic growth. Since and donated it to the organization.
2008/09, the services sector has superseded
agriculture as a major contributor to GDP. As
of 2018, this sector contributed 39.3% of 4 riple Bottom Line (TBL)
T
GDP, while agriculture contributed 36.3% Evaluation of Ethiopia’s
(UNDP, 2018). Apart from being a major con- Structural Adjustment
tributor to GDP, services have also been grow- Policies
ing faster than agriculture (see Table 8.4). But
this presents a dilemma in Ethiopia’s and mul- The right question to ask about economic and
tilateral organizations’ efforts to alleviate pov- financial reforms in Ethiopia is not whether it has
erty. Services jobs benefit mostly educated spurred economic growth, but whether it has fos-
and semi-educated urban dwellers. Think tered sustainable development. Sustainable
about hotel staff: receptionists, cooks, security development was originally defined in the
guards, etc. They all have basic education, Brundtland Commission’s report, “Our Common
which most of the rural dwellers don’t have. Future,” as “development in which present gen-
As discussed in Sect. 4, this is one of the rea- erations find ways to satisfy their needs without
sons for the inequities of economic reforms in compromising the chances of future generations
Ethiopia. to satisfy their needs” (Brundtland 1987). As the
Infrastructural Boom: Investment in infrastruc- field of sustainable development has grown, so
tures has been a major driver of growth in has the ambiguity surrounding the precise mean-
Ethiopia (Moller and Wacker 2017). Ethiopia ing of sustainability (Onyeiwu et al. 2011).
features a few signature infrastructural proj- Arguments have ensued over whether the correct
ects that have become the talk of the globe. term should be sustainable growth or sustainable
The controversial Grand Ethiopian development; whether something can be classi-
Renaissance Dam (GERD), formerly the fied as weak or strong sustainability, and whether
Millennium Dam, was built at a cost of $5 bil- certain aspects of sustainability are viable indica-
lion. It is expected to generate hydroelectric tors (Daly 1990; Ayres 2008; Rigby et al. 2001).
power of about 6 gigawatts, the largest in As of 1995, there were 386 definitions of sustain-
Africa.9 China has been the major driver of ability, a number which has surely risen in the
Ethiopia’s infrastructural boom, as a financier time since (Jacobs 1995). In this chapter, I adopt
and supplier of construction services. In two the concept of sustainability espoused by Sachs
(2015, p. xiii), which contends that sustainable
8
See A. R.A. Shaban, “Ethiopia central bank announces development is about “the interlinkages of eco-
15% devaluation of Birr,”
Reuters, October 10, 2017 (https://www.africanews.
com/2017/10/10/ethiopia-central-bank-announces- J. Marsh, “Skyscrapers, trains and roads: How Addis
10
nomic, social, and environmental change.” I also Gondar. There were also visits to markets, coffee
subscribe to the notion that SAP must transcend farms, animal husbandry, fishing cooperatives,
market fundamentalism and foster economic dig- agro-processing plants, and eco-tourist sites.
nity, defined as the ability of individuals to Other places visited include: hospitals and clin-
achieve economic security, self-worth, respect, ics, high schools and universities; churches,
unimpeded access to health, ability to take care of museums, farms, families, etc. These visits
loved ones and optimal utilization of one’s capa- enabled me gain insights into living conditions,
bilities (Sperling 2020; Sen 1999). opportunities, and challenges across a broad sec-
I argue that a Triple Bottom Line (TBL) or tion of the Ethiopian economy and society. The
sustainability approach is a more robust frame- goal of this section is to weave my observations
work for evaluating the impact of SAP in with secondary sources of information, to gain a
Ethiopia. For a country with a checkered history more holistic understanding of the impact of
of poverty, inequality, and ecological challenges, Ethiopia’s economic reforms. In other words, this
assessing the impact of SAP solely based on holistic approach provides contexts and new
market orthodoxy is not only disingenuous, but interpretations to previous analyses of structural
also perpetuates the very processes and mindsets adjustment in Ethiopia.
that have continuously reproduced the country’s
sordid socio-economic profile. A sustainability
approach to the analysis of SAP requires the use 4.1 Economy
of the three bottom line of Economy, Equity and
Environmental Sustainability. When one of the Structural adjustment in Ethiopia satisfies the
three legs of the sustainability tripod is defec- economic dimension of the TBL. As Table 8.3
tive, then economic reforms cannot be said to shows, the country has achieved impressive eco-
have generated sustainable development. In the nomic growth rates since the implementation of
next section, I explore whether Ethiopia’s eco- structural adjustment. From a negative growth in
nomic and financial reforms have been sustain- 1992, growth has been mostly in the double digits
able, in the sense of meeting the three criteria of in the past two decades.11 Per capita income rose
the TBL. from $183 in 1995 to $570 in 2010, and then
The TBL Methodology for Ethiopia: reached an all-time high of $602 in 2019.
Qualitative information is as important as quanti- Table 8.3 also shows that Ethiopia’s macroecon-
tative data in evaluating the extent to which eco- omy has improved significantly since the imple-
nomic and financial reforms have impacted the mentation of reforms. While inflation remains a
economy, equity and the environment. Indeed, challenge and has been mostly in the double
one effective way of studying African economies digits,12 indicators like debt, fiscal deficits, and
is not only through statistical analysis, but via current account balance remain at sustainable
interactions with the people; participant- levels. Investment received a major boost after
observation; hearing the stories of a broad seg- the implementation of reforms, from 10% of
ment of the population; their challenges,
opportunities, and aspirations. Information for 11
The decrease in growth in the late 1990s was a result of
the TBL analysis in this chapter was gathered the war with Eritrea in 1998–2000, as well as a severe
during four visits to Ethiopia (2009, 2011, 2018 drought during 2002–2003.
and 2019). The visits consisted of interviews with 12 Ethiopia’s structural adjustment policies and high
rural and urban dwellers in the north and south of growth rates have resulted in persistent increases in the
rate of inflation, from just 0.7% in 2000 to almost 16% in
Ethiopia. I also visited the country’s major urban 2019 (Table 8.3). To slow down inflation, the Ethiopian
areas: Addis Ababa, Awassa, Bahir Dar and Central Bank raised interest rates by 2 percent in October
2017.
8 The Nexus of Structural Adjustment, Economic Growth and Sustainability: The Case of Ethiopia 115
GDP in 1992 to nearly 40% in 2015. Perhaps Industrialization (ADLI) strategy has also
because of its impressive growth performance, spurred an increase in the demand for agricul-
commitment to economic reforms and good gov- tural and dairy products.
ernance, Ethiopia has continued to be the highest • Improved Access to Markets: construction of
recipient of bilateral and multilateral aid in roads, as well as the introduction of
Africa. Additionally, stellar growth rates have government- subsidized mass transportation
resulted in declining poverty rates in the country, (trains, buses, and trams) have enabled farmers
from 71% in 1995 to about 30% in 2018 and herders to have better access to markets.
(Table 8.5). As poverty declined and income rose, • Better access to agricultural inputs, including
so also did living standards. Mobile telephone seedlings, fertilizers and extension services
subscriptions rose from about eight per 100 peo- (Teka and Lee 2019).
ple in 2010 to 42 in 2015 (Table 8.5).
Some of the mechanisms by which growth has Although the poverty rate has been declining,
reduced poverty in Ethiopia include the following: Ethiopia remains one of the poorest countries in
Africa (Dercon and Hill 2009, p.3; Dorosh et al.
• Income Diversification and Mitigation of 2012). It is not too far-fetched, therefore, to assert
Shocks: As Table 8.4 shows, industry (mainly that Ethiopia’s economic growth has been one
agro-processing) and services are the major without structural transformation (Dorosh et al.
drivers of Ethiopia’s economic growth. The 2012). The growth elasticity of poverty in Ethiopia
growth of these sectors has created job oppor- is very low (World Bank, 2019). China and
tunities and alternative income sources with Ethiopia have grown almost at the same rates in
which poor households use in mitigating the past two decades, but poverty has declined
shocks. Poverty in Ethiopia is often driven, faster in China. In the early 2000s, China’s pov-
among other things, by exogenous shocks and erty rate was about 32%, while Ethiopia’s was
vulnerability (Dercon 2005). These include 39%. By 2015, however, China’s poverty rate had
illness, loss of a family member, famine, unfa- fallen to 0.7%, whereas Ethiopia’s remained high
vorable climate conditions (such as excessive at 31% (World Development Indicators database).
rainfall, drought, and locust invasion), loss of One reason why the poverty elasticity of growth
employment, harvest failure, etc. in Ethiopia has not been as high as expected is
• Increase in Demand for Agricultural because Ethiopia’s growth has not been accompa-
Products: increases in per capita income and nied by structural change, as most Ethiopians are
job opportunities in the industry and service still employed in the low-productivity agricultural
sectors have spurred demand for agricul- sector and reside in rural communities with little
tural products. Trade liberalization has also or no social services (health centers, schools,
boosted the exports of agricultural products, electricity, clean water, roads, etc.). Despite the
especially coffee and beef, resulting in ris- country’s ADLI strategy, Ethiopia remains a
ing incomes for rural farmers and herders. country of poor farmers and herdsmen. One les-
Ethiopia’s Agricultural Development Led son from Ethiopia is that economic reforms and
financial liberalization do not always lead to Human Development Index (HDI ranking in 2019),
structural transformation. Yet, without structural and it has consistently ranked amongst the countries
transformation that draws surplus labor from the in the far bottom of the HDI.16
rural economy to a growing industrial sector, pro- I witnessed pervasive evidence of chronic pov-
ductivity will remain low and poverty will be erty in rural Ethiopia, compared with urban resi-
endemic in the rural sector (Lewis 1954). dents. In several villages, uneducated and unskilled
youths migrate to urban areas, but became unem-
ployed and resorted to low-income activities and
4.2 Equity street begging. Mass migration of poor women and
children from the Somali region of Ethiopia has
As Shadish et al. (1991, p. 19) point out, the goal exacerbated urban congestion. About 80% of the
of reforms should be to “improve the welfare of residents in Addis Ababa live in slums. Only 7% of
individuals, organizations and society.” While houses in the city are connected to a sewer system,
Ethiopia’s economic growth has reduced the pov- and almost a quarter of residents have no access to a
erty rate, it has not been inclusive and equitable. toilet. There is only one room in about 35% of the
Poverty has fallen faster in urban areas than rural houses in the city, causing overcrowding, poor sani-
areas. In urban areas, it fell from 26% in 2011, to tation and high prevalence of disease.17 Prunier and
15% in 2016, whereas it decreased modestly Ficquet (2015, p. 401) further describe the environ-
from 30% to 26% in rural areas during the same mental situation in Addis Ababa in the following
period.13 The inequity inherent in Ethiopia’s eco- ways: “while neighborhoods progressively became
nomic reforms is vividly manifested by the num- more built up, access to basic services has not
ber of children in poverty. According to the always kept pace. The hygiene situation is alarming,
United Nations Children’s Fund (UNICEF), rates of access by households to basic services are
‘nearly 36 million children in Ethiopia are poor overwhelmingly insufficient; existing infrastructure
and lack access to basic social services.”14 was not conceived for the growing population den-
During my visits, I observed a very wide con- sities, and a good deal of community sanitary infra-
trast in the living conditions of rural and urban structure has been abandoned—degrading the
Ethiopians. Rural consumption has grown by less environment.”
than 1% per year during 2011–2015, compared One reason why growth in Ethiopia has not
with 6% in urban areas.15 According to the World been equitable and inclusive is that there are
Bank, the poorest rural dwellers in Ethiopia did not many Ethiopians with little education and skills.
experience any real consumption growth between At 52% literacy rate, Ethiopia is amongst the 13
2005 and 2016. As well, the severity of rural pov- African countries with the lowest literacy rates.18
erty was higher in 2016 than in 2005. Ethiopia’s The lack of education and skills implies that there
ranks as number 173 out of 189 countries in the are few conduits, short of cash transfers and sub-
sidies for essential goods and social services,
World Bank Report, Ethiopia Poverty Assessment:
13 through which growth can trickle down to the
Poverty Rate Declines, Despite Challenges, April 2020 vast majority of Ethiopians.
(https://www.worldbank.org/en/country/ethiopia/publica-
tion/ethiopia-poverty-assessment-poverty-rate-
declines-despite-challenges) 16
United Nations Development Programme (UNDP),
United Nations Children’s Fund (UNICEF) Report,
14 Human Development Index Ranking, 2019 (http://hdr.
Multi-dimensional Child Deprivation in Ethiopia, 2018 undp.org/en/content/2019-human-development-
(https://www.unicef.org/ethiopia/reports/multi- index-ranking)
dimensional-child-deprivation-ethiopia-first-national- 17
Habitat for Humanity, Great Britain, “Slum Housing in
estimates) Ethiopia.” https://www.habitatforhumanity.org.uk/
World Bank Report, Poverty and Equity Brief, April
15 blog/2017/11/slum-housing-ethiopia-modernise/
2020 (https://databank.worldbank.org/data/download/ 18
Literacy rate applies to people 15 and above. See World
poverty/987B9C90-CB9F-4D93-AE8C- Bank, World Development Indicators (https://data.world-
750588BF00QA/SM2020/Global_POVEQ_ETH.pdf) bank.org/indicator/SE.ADT.LITR.ZS)
8 The Nexus of Structural Adjustment, Economic Growth and Sustainability: The Case of Ethiopia 117
Another source of the inequity in Ethiopia relates because he could not find a job as an engineer.
to the government’s ADLI strategy. The push for Under the illusion that a master’s degree in finance
agro-allied industrialization in Ethiopia has resulted would improve his odds of obtaining a job, he
in landlessness for many peasant farmers (Baye could not find a job after an expensive master’s
2017, pp. 32–33). Land ownership in Ethiopia is degree in finance. He borrowed money and bought
vested in the state. The government has prioritized a rickety car, which he uses as a cab. There are also
industrialization, which has led to land reallocation examples of young university graduates who end
to global corporations, at the expense of subsistence up in low-paying service sector jobs – as hotel
farmers. This would not have been a problem, if the cleaners, receptionists, tour guides, etc. Ethiopia
agro-allied industries were able to employ landless has become the largest source of immigrants to
farmers. While many agro-processing plants are Yemen, who use the country as a gateway to oil-
located in rural communities of Ethiopia, they have rich Gulf countries, particularly Saudi Arabia.
generated little or no linkage effects with the local About 90% of migrants in Yemen are Ethiopians,
economies. During my visit to a winery owned by a mostly youths with little education.19
French company, I found that the grapes were pro-
duced through mechanized farming, and the winery
itself was very capital-intensive. Its employment 4.3 Environmental Sustainability
effects have been very marginal. The company has
a small store at its entrance where it sells wine, As discussed earlier on, economic reforms and
mainly to tourists that pass through the highway financial liberalization have promoted economic
where the company is located. A bottle of wine sold growth in Ethiopia. It has also spurred inflation,
at this store was about US$5, in a country where the especially for manufactured goods and services
per capita income is only $600 per year. In other (Table 8.3). Thus, farmers and herdsmen are not
words, the vast majority of the residents of this only paying market prices for goods and services
community are unable to afford the product. The previously subsidized by the government prior to
employment of landless farmers by agro-allied reforms, but those prices are rising very fast. To
industries has been limited by several factors, generate enough income to support their con-
including the fact that most of the farmers lack basic sumption of goods and services, farmers and pas-
education and skills, making them unemployable in toralists have to produce more, leading to
agro-processing plants and manufacturing firms in over-utilization of agricultural land and over-
general. grazing of pasture. The allocation of land to agro-
The inequity of growth in Ethiopia is also man- industrialists has reduced the availability of
ifested in the fact that most rural Ethiopians do not farming and grazing land, forcing farmers and
have access to quality social services, especially herders to utilize the same piece of land over and
those who reside in the Somali, Afar, the southern over again. Arable land per person in Ethiopia
parts of SNNPR, and the southern and eastern decreased from 0.19 hectares per person in 1993
parts of Oromiya (World Bank, April 2020). Rural to 0.14 in 2001 (World Development Indicators).
dwellers in these regions lack access to schools, It has remained flat at this level since then.
transportation, health centers, portable water, elec- This has resulted in loss of soil fertility and
tricity, Internet, financial services, and roads. destruction of natural ecosystems. The image that
Inequality and lack of inclusiveness are not pecu- catches the attention of a first-time visitor to the
liar to Ethiopia’s rural communities; they are also
manifested in the urban areas. Examples abound
about educated youths unable to obtain gainful D. Botti, and M. Phillips, “Record numbers of refugees
19
South of Ethiopia is that of animals everywhere; tree cover, as well as a 3.8% decrease in total
on the highway jostling for space with motorists; area of forest cover. Deforestation has also con-
on sprawling farmlands; on street corners. The tributed to Ethiopia’s loss of biodiversity, which
reason is that the increasing scarcity of grazing has caused wild animals to lose their natural
land has forced herders to traverse vast large habits.21 In other words, Ethiopian farmers and
swaths of areas in search of pasture. It is not herders, in response to the economic hardships
uncommon to find very young boys tending to imposed by structural adjustment, are unwit-
scores of animals, trekking several miles in tingly vitiating and undermining the physical
search of a depleting stock of pasture. The over- and ecological basis of their existence.
use and depletion of resources can be observed The excessive use of natural resources, as a
from the pattern of fishing in Ethiopia. In the result of poverty, creates a cycle of low produc-
town of Awassa, I visited a fishing cooperative tivity, low yields, low income, poverty and unsus-
made up of young men and women in their 20s. tainable use of resources. A New York University
They send out a group of members daily on boats study reported that 60% of Ethiopians live in
to fish, and another group would clean up the fish areas that are susceptible to serious human-
and sell them to restaurants and households. induced environmental degradation. This, accord-
Because fishing is done daily within the same ing to the report, is caused by the “clearance of
area of the river, the fish they catch look very tiny. woodlands and forests, unsustainable arable
Interviews with some members of the coopera- farming techniques, the use of dung and crop
tive revealed that the cooperative was becoming residues for fuel rather than as fertilizer, and
more and more frustrated because of the deple- overstocking of grazing land.”22
tion of the stock of fish in the river. But because The scarcity of farmland and pastures has
of their need to generate income due to the lack been exacerbated by the habit of agro-processing
of alternative avenues for employment, they had companies fencing off their land and preventing
no choice but to continue fishing on a daily basis. farmers and herders from gaining access (Kuto
About half of the poor in Africa live in four et al. 2018, p. 35). In many cases, security guards
countries: Ethiopia, DRC, Nigeria, and Tanzania are employed to prevent locals from farming or
(Onyeiwu 2015, p. 61). Although Ethiopia’s grazing on company land. Where these lands
poverty rate has declined since the implementa- contain pristine lakes, the locals are prevented by
tion of economic and financial reforms, chronic the companies from having access to them.
poverty remains endemic in the country, espe- Effluent wastes from agro-processing companies
cially amongst farmers and herders in rural vil- are dumped in lakes and agricultural lands, thus
lages. Chronic poverty in Ethiopia has led to degrading the natural eco-system and undermin-
unsustainable farm practices and patterns of ani- ing the livelihood of rural Ethiopians. According
mal grazing that are destructive to the natural to Kuto et al. (2018), “hundreds of dangerous
ecosystem. For instance, lacking the resources to chemicals for the production of flowers are being
purchase stoves, kerosene, gas cookers and other
modern appliances, farmers resort to the use of Ethiopia at www.globalforestwatch.org/dashboards/coun-
animal dungs and biomass as energy sources, try/ETH/?category
rather than use them as soil nutrients. The use of 21
One evidence of this is the sight of monkeys abandoning
their natural habits and hanging around highways, as well
wood for energy has contributed to the rapid
as mingling with tourists. The highway between Addis
pace of deforestation in Ethiopia, causing a Ababa and Bahir Dar in Northern Ethiopia is filled with
72.5 K hectares decline in forest cover between hundreds of monkeys trying to adapt to human-induced
2002 and 2019.20 It lost about 18% of its total disruptions of their natural habitats.
A. Evans, Resources, Risk, and Resilience: Scarcity and
22
used. After using these chemicals, the industry tremendous ecological stress. In the case of
directly discharges chemicals in Lake Dambal. Ethiopia, the chapter has shown that the gains
These toxic chemicals are affecting aquatic life, from economic growth have not been broadly
people and animals which are using the lake shared amongst the population. After nearly
water.” three decades of structural adjustment, Ethiopia
Ethiopia’s high poverty and illiteracy rates have remains a very poor country. Extreme poverty
fostered a high population growth rates. The coun- and inequality have led to unsustainable agricul-
try’s population growth rate was less the 2% in tural practices such as over-grazing, over-fish-
1980, but peaked at about 3.4% in 1994 before sta- ing, deforestation and biodiversity loss. Although
bilizing at about 2.6% in 2019. Its population more the Ethiopian government characterizes its
than tripled from just 35 million in 1980 to 115 development strategy as a “green growth strat-
million in 2019. Ethiopia has become the second egy,” the chapter finds the opposite: the coun-
most populated country in Africa, after Nigeria. try’s growth process has resulted in biodiversity
Meanwhile, agricultural land has not increased loss, deforestation, rural-urban migration, and
that much, rising from about 31% of total land area urban congestion. The paper finds evidence to
in 1993 to 36% in 2016 (World Development support the notion that the Ethiopian govern-
Indicators). Ethiopia’s rapid rising population has ment’s and multilateral financial institutions’
negatively affected the environment in several attempts to alleviate poverty, with structural
ways. The first is through rural-urban migration. adjustment and an agricultural development led
About 80% of the population reside in rural com- industrial development strategy, have fostered
munities. This has led to competition for limited inequality, and undermined the country’s unique
resources and opportunities in the rural areas. and endangered biodiversity (Wolfgram 2006).
Lacking opportunities in the rural areas, rural Ethiopia’s case shows that market-based eco-
dwellers, particularly youths, migrate to urban nomic reforms and financial stabilization poli-
areas, which themselves had already become con- cies, while improving economic performance,
gested due to rapid urban population growth. exacerbate inequality and degrade the environ-
ment. Consequently, countries whose overarch-
ing objectives are to foster economic and
5 Conclusions financial stability, while at the same time elimi-
nate poverty, foster social inclusion and environ-
Ethiopia’s structural adjustment policies have mental sustainability, should either eschew
been successful, when viewed with the lenses of structural adjustment or proactively explore
neoclassical economics and market fundamen- ways by which it could be equitable and environ-
talism. Economic growth has been unusually mentally sustainable.
strong, and key indicators of macroeconomic
stability (investment, private sector develop-
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Layered Crises Preventing Poverty
Reduction: An Analysis of Zambian 9
Poverty Dynamics and Policy
Implications
Abstract
rural, inter-provincial and gender inequalities
are exacerbated by highly contested politics
Zambia is experiencing structural distress with weak policy development and imple-
marked by high levels of severe/food poverty, mentation, both of which sets of contextual
chronic poverty and impoverishment. Poverty factors significantly constrain state action on
trends are strongly linked to environmental poverty reduction. The context is also one of
sustainability issues, such as deteriorating macro-economic vulnerability—Zambia is
fish stocks, soil fertility, drought and floods, still an LDC, mineral dependent, revenue-
and disaster risk. They are also underpinned deficit and debt-distressed. The 2010s wit-
with further effects such as inability to cope nessed a recent period of sharp shocks to the
with health shocks, early marriages and incomes of the poor (2016–2019) preceded
divorces, and alcoholism. Long term urban- by years of systemic stressors driving a slower
© The Author(s), under exclusive license to Springer Nature Switzerland AG 2022 121
A. Antoniades et al. (eds.), Financial Crises, Poverty and Environmental Sustainability: Challenges
in the Context of the SDGs and Covid-19 Recovery, Sustainable Development Goals Series,
https://doi.org/10.1007/978-3-030-87417-9_9
122 A. Shepherd et al.
decline in income, savings and assets which ditures on food and health (Billima-Mulenga
increased the vulnerability to the recent et al. 2021).
shocks faced by households and the onset of The country’s macro-economic context is a
Covid 19. In this context, policy priorities challenging one for poverty reduction. Between
would include stabilising farm incomes, 2000 and 2014, the annual real gross domestic
developing a stronger household asset base, product (GDP) growth rate averaged 6.8%, but
focusing on resource conservation in farming then slowed to 3.1% per annum between 2015
and fisheries, and building a stronger and ear- and 2019, mainly because of falling copper
lier policy response to disasters. prices, declines in agricultural output and hydro-
electric power generation due to insufficient
Keywords rains. During the previous decade the govern-
ment has invested heavily in badly needed infra-
Rural-urban poverty · Gender-based poverty structure, but this has left it unsustainably
dynamics · Covid-19 · Environmental shocks indebted, and in 2020 in default. Debt servicing
· Debt distress · Disaster risk management and public sector salaries leaves little over for
development expenditures. Kwacha devaluation
against the dollar has led to inflation, notably in
1 Introduction1 food prices, which are of considerable signifi-
cance for Zambia’s poor, most of whom are net
Zambia has a high incidence of poverty espe- purchasers of food. Drought in 2016 and 2019
cially but not only in rural areas, where nearly 3 led not only to very significant food insecurity
out of four households were in poverty in 2015, but also electricity load shedding which had a
compared to nearly one out of four in urban areas highly negative impact on small and medium
(LCMS 2015). Much poverty is under the ‘food businesses and employment. With Covid eco-
poverty’ line, especially in rural areas and for nomic activity was in recession in 2020 with
many women headed households. In 2015 there double digit inflation, and per capita growth was
were almost 3 times as many ‘food poor’ as mod- projected to be negative through 2022 (World
erately poor (Diwakar and Bwalya 2021). While Bank, 2021). 2020 has seen the country default,
poverty is most widespread and deepest in rural opting to bow out of a $42.5 million Eurobond
areas, urban poverty barely declined between repayment in November 2020; together with the
2010 and 2015 (LCMS 2015), and the qualitative severe effects of the Covid pandemic on top of
evidence reveals a rise in urban township poverty the 2019 crises.
since 2015, rising sharply between 2017 and The political context has also become chal-
2020 as a consequence of coinciding macro lenging: having had multi-party elections for
shocks on employment corresponding with rising three decades, with an exchange of power
costs of living (Bond et al. 2021). For the Zambian between the two major political blocs, the trend
population as a whole the numbers and propor- in the 2010s has been towards concentration of
tion of the extremely poor increased from 54.2% power in the Presidency and political manoeu-
in 2010 to 60.8% in 2015 (LCMS 2015). Phone vres to avoid the incumbent Patriotic Front gov-
surveys by Innovations for Poverty Action during ernment losing power. This has had several
the pandemic recorded widespread loss of pertinent consequences: stagnation in policy
incomes, especially for some women, and wide- making around poverty reduction: the policies in
spread depletion of savings, to cover basic expen- place have been there for most of two decades; a
lack of serious commitment to implementation of
at least two programmes with poverty-reducing
Where not stated the sources for this chapter are several
1
and low return maize economy have at least con- sifying electricity supplies in Zambia3 is a con-
tinued to receive proper budgetary allocations— trasting story to that of Kenya, where a similar
the Farming Inputs Subsidy Programme and the energy crisis in 2000 led to massive investment
Food Reserve Agency (Hinfelaar 2021). in renewables during the subsequent 20 years.
Furthermore, disaster risk management, In Zambia, the emergency use of diesel genera-
which was previously treated in a politically tors also led to increased carbon emissions
neutral way, became a political football during (Ahmed et al. 2021).
the major 2019 drought, which led to wide- This then was the context in which the
spread hunger and near-famine conditions in research reported in the chapter took place.
parts of the south and west, which were elec- This study synthesizes mixed methods research
torally opposition strongholds. Whereas previ- evidence on poverty, its dynamics, and its driv-
ous droughts had seen food reserves released ers in Zambia. The individual studies relied on
to counter drought- induced food price infla- data from the national Living Standards
tion and hunger, on this occasion leadership of Measurement Surveys (LCMS) 2010 and 2015,
the Disaster Management and Mitigation Unit the Rural Agricultural Livelihoods Survey
(DMMU) was politicised, and the ruling party (RALS) 2012, 2015, 2019, pre-Covid qualita-
decided not to give the liberal opposition party tive data collected during 2019–2020 across 9
the United Party for National Development provinces and sites, 5 rural and 4 urban (160
any bandwidth as a result of the famine. At the life history interviews and related focus group
same time a maize export ban was lifted tem- discussions and key informant interviews).
porarily to permit well placed firms to export During Covid a small sub- sample of those
the maize which was critical for food security, households were re-interviewed.
and maize millers loyal to the ruling party were Due to its debt situation, Zambia has made
given milling contracts by the DMMU, some of social cash transfer beneficiaries a one-off phone
the proceeds of which filtered back to the ruling payment of K2400 (US$ 107) but has not had the
party. Potential critical voices in the govern- resources to develop a broader or more s ubstantial
ment were silenced, and widespread suffering response to distress during the pandemic.
was allowed to continue as political loyalty Nevertheless, some recipients reported investing
was emphasised above anything else, even in the payment into a micro-business (CPAN 2021).4
the food distribution which eventually took Covid has thus been an important shock in its
place through the District Commissioners’ and own right and layered on the pre-existing, multi-
District committees.2 ple crises discussed above, no doubt exacerbating
A related issue is that of energy supplies: in existing inequalities (gender, urban-rural,
2019 the supply of hydro-electricity from the income). This paper discusses these challenges,
Kariba dam was curtailed due to the same focused on the intersection of issues relating to
drought, a repeat of the situation which had environmental sustainability, disaster risk,
occurred in 2016, and previously. Electricity macro-economic vulnerability, and linked socio-
was strongly rationed and there were unpre- economic issues, which together combine to
dictable power outages, especially in Zambia’s severely constrain poverty reduction prior to and
low cost housing areas (‘townships’) where during Covid19, a situation likely to continue
most of the urban poor live. Enterprises depen- into the medium and long term without signifi-
dent on electricity were badly affected, having cant changes in policies and politics.
to close, or change hours of operation, and
employment was significantly reduced. The
low tariffs and absence of investment in diver-
Batidzirai et al. (2017).
3
2021 http://www.chronicpovertynetwork.org/covid19-
Key informant interviews in 2019 and 2021.
2
poverty-monitor/zambia-april
124 A. Shepherd et al.
surveys to derive synthetic panel data estimates of poverty 2020–2021. Constraints include livelihoods based
dynamics statistics. It provides bounded estimates for the on declining or highly variable natural resource
poverty dynamics, which can be quite wide. bases (soil fertility, forests and fish stocks), com-
6
Due to data limitations, the income variable does not
include various aspects of agricultural inputs or labour
costs, imputation of non-cash expenditures, and other is compared to the $1.25 poverty line, as middle ground
income. The metric is best regarded as a cash inflow vari- between the low national poverty line and $1.90 interna-
able (referred to hereafter as income for convenience). It tional poverty line (see Diwakar et al., 2021).
9 Layered Crises Preventing Poverty Reduction: An Analysis of Zambian Poverty Dynamics and Policy… 125
Western
Southern
NorthWest
Northern
Muchinga
Lusaka
Luapula
Eastern
Copper be
Central
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Chronic poor Impoverished Transitory escapers Sustained escapers Never poor Other
Fig. 9.1 Percentage of rural households in the different poverty categories by province (over the period 2012–2015-
2019). Source: Diwakar et al. (2021)
bined with others including uncompetitive maize nor are they a sole or long-term solution to the
marketing, and the dominance of the maize crop problem.
in Zambian farming generally; dependence on Soil fertility is a frequently cited factor that
farming with no or little education and/or high contributed to poor crop harvests in the qualita-
dependency ratios; women and youth headed tive research. Soil depletion was a complaint
households being unable to access enough land among chronically poor households in all quali-
and irrigation for an agriculturally based escape. tative research sites except one where there was a
This combination of constraints meant that diver- dambo or wetland (Eastern Province).7 Traditional
sification and capital accumulation routes out of methods of cutting down trees to prepare land
poverty have become challenging. and provide ash as fertiliser were still the main
There are rural occupations which are likely to farming practice where there were trees. There
provide livelihoods below the poverty line. In was evidence of using some intercropping and
rural areas, these include piece wage labour growing beans, which were both nutritious and
(ganyu); charcoal burning and firewood or reed fixed nitrogen. However, conservation farming
collection; much fishing and farming, some beer methods were not very evident, despite their pro-
brewing and selling. These occupations fre- motion in Zambia over several decades, and there
quently face declining or highly variable natural was a lack of knowledge and discussion on both
resource bases: declining soil fertility and intercropping and soil management. Farai
increasingly variable rainfall; diminishing farm describes how poor soils, lack of fertiliser and
sizes; soil depletion; declining fish stocks, river poor rainfall undermine her farming endeavours
and lake levels, and flooding; deforestation— and vision:
among the qualitative research sites only in
Northwest Province could a somewhat viable
return be made from producing charcoal or col- Dambos are not always reliable however: in Western
7
For the 2019/2020 farming season, Farai has ally challenging to promote, and there are few
planted maize at her farm and is expecting to har-
vest 6 bags of maize. "I have been cultivating a
silver bullets. Zambia would benefit from a root
bigger portion of land over the years but the yieldand branch reconsideration of what might work
in its different agro-ecological and socio-
remains quite poor due to soil infertility", she com-
plained. She believes that access to fertiliser will
economic contexts, taking into account the range
greatly help the yields as the soil fertility at her
farm has deteriorated over the years resulting in
of approaches which has worked elsewhere, as
her farm of about four Lima.8 She mentioned that itexplored in a systematic mapping exercise (Thorn
is slowly becoming very hard to predict rain as et al. 2016).
their livelihoods are dependent on farming. She Fishing as a way of life is more common in
believes with the right amount of rain and fertil-
iser; she can raise her crop harvest from 6 bags to
Luapula, Northern and Western provinces due to
60. (Bond et al. 2021) abundancy of water resources. Three out of five
rural research sites had fishing as a major liveli-
There is a need to reconsider and re-invest in hood and one which in the past had provided a
broader soil and water conservation in Zambia, good living. Fish stocks in the two lake sites had
given the long standing and well researched chal- declined prior to fieldwork in 2019/2020, and
lenges faced in promoting conservation farming government attempted to manage this by regu-
(CA), whose constituent components have gener- larly banning fishing for at least 4 months of the
ally only been partially adopted by small farmers. year, though the Northern Province site lake had
There is some evidence of positive results from international borders which made the fishing ban
CA: ‘The definition of CA has generally been difficult to impose. The riverain site had seen the
considered to include minimum tillage (basins river dried up after several years of drought.
and ripping), maintaining crop residues on the Depleted fish stocks were widely attributed to
field, and crop rotation with legumes. In the field, growth in the fishing population and poor fishing
it was clear that most farmers were applying all techniques. Government was encouraging fisher-
three principles, though usually not on large areas folk to turn to farming or livestock keeping as
of land. The Conservation Agriculture Scaling alternative livelihoods. Aggressive fish traders,
Up has succeeded in increasing the area under sometimes not local to the area, are also reported
CA, particularly among the Large Farmers, partly to be a feature of the fishing communities in
by intervening with input packages containing Luapula and Northern Provinces. While assets
inputs such as legume seed and herbicides. For are important in fishing, few chronically poor
Family Farmers, the area under minimum soil households own their own boats or many nets,
disturbance is increasing, yet optimal legume and often work for others to catch fish and/or rent
production is still constrained by insufficient a boat. Owning your own net or other fishing
seed quantities . The use of herbicides and rippers asset allowed fishermen to earn more, as Porsha
have also helped to increase land area under describes. Her father gave her husband addi-
CA. Compatibility of the land with CA practices tional fishing nets to improve his fishing. This
and principles is a factor influencing its uptake; it improved the husband’s ability to catch fish such
is the [Mid-Term Evaluation] team’s assessment that he even started to hire more people to help
that CA solutions in CASU may need to be tai- him with the fishing.
lored more precisely for each area and group of The declining natural resource base of small-
farmers in order to achieve the set targets.’ (FAO, scale farming and fishing is a serious and long-
2016). term issue in rural Zambia. Combined with
In addition to adjusting the approach to differ- patchy and incomplete conservation efforts - soil
ent agro-ecological contexts, complementary conservation programmes, fishing bans and net
interventions may also be needed (Thierfelder size regulations, partial adoption of conservation
et al. 2018). Soil and water conservation is gener- farming (Umar et al. 2011), the paucity of assets
among the chronically poor, and a growing fre-
8
1 Lima is 0.25 hectares. quency of droughts, which undermine farming,
9 Layered Crises Preventing Poverty Reduction: An Analysis of Zambian Poverty Dynamics and Policy… 127
fishing and livestock livelihoods: this nexus is a temporary escaper) narrated how her older
key policy issue now and for the future. brother had to support her mother after she
Strong gender-based divisions of labour per- divorced her husband:
sist, in farming, fishing, domestic work, and the My mother and father were still married. My brother
division of responsibilities. However, with the advised that we travel to K, see dad and serve him
pressure on employment of recent decades, there with the divorce notice. After everything was settled,
is a noticeable shift towards more women enter- my brother bought mum a plot in K and built us a
three roomed mud house. Life was good, my brother
ing the labour market and generating a growing used to send us money, food, seed and fertilizer
portion of income, especially in urban settings. because we used to farm for eating and selling.
This gives women increasing independence but
can also result in a power dynamic where some A few chronically poor and temporary escap-
husbands prevent wives from entering the labour ers reflected how divorced women resorted to
market. transactional sex and prostitution as a source of
Women headed households comprise around a income. Candy (rural woman temporary escaper),
quarter of all households and a high proportion of a mother of nine, narrated how when she was
the chronic poor (Fig. 9.2)—driven by the young was forced into prostitution in order for
absence of a male earner; the tendency of male her to provide for children. “After divorce from
migrants not to support children especially if they my first husband, I became a transactional sex
have a new family, and a married woman’s vul- worker to provide for my children. It was during
nerability to her husband’s death, divorce, or this time that I had other children so that their
migration. The 2018 Demographic and Health fathers would support us”.
Survey (ZSA 2019) recorded over half of In the life histories there is limited evidence of
divorced or separated women had experienced SCT being allocated to divorced women. Modesty
physical violence and nearly a quarter sexual vio- (a woman temporary escaper, Simu) was one of
lence (p313). In the qualitative research, children the few exceptions:
of divorced parents usually accompany their She said she was lucky to benefit from social wel-
mother, and frequently lose access to food as well fare. She got K180 in December 2018, April 2019
as education. Most women are aware of their and another K180 in early December 2019. This
rights and engage in legal action, but after the rul- money, once it comes, goes a long way in meeting
various households needs especially payment of
ing, have no power to enforce compliance. As a school fees. She got enrolled by the department of
result, divorced women were more vulnerable to social welfare because of divorce. She used the
downward mobility and to dependence on rela- court documents to be considered for financial
tives and their children. Boron (a rural woman support.
35%
30%
25%
20%
15%
10%
5%
0%
Chronic poor Impoverished Transitory escape Sustained escape
Fig. 9.2 Share of women headship by year and poverty trajectory. Source: Diwakar et al. (2021)
128 A. Shepherd et al.
This demonstrates how having access to social tively static poverty trajectories over time
cash transfers would make a significant differ- (Diwakar and Bwalya 2021). This analysis sug-
ence for the many poor women headed house- gests that, while policies to prevent impoverish-
holds in Zambia. However, although we know ment and promote escapes can be relatively
that social cash transfers can make a significant uniform across the country, there may need to be
difference to the consumption and economic significant variation in the emphasis and policies
activities of the poorest (Handa et al. 2018) they to tackle chronic poverty from province to prov-
have been intermittent, unpredictable, and have ince. These would need to be based strongly on
left many chronically poor people out (Fig. 9.3). addressing the context-specific natural resource
This includes older people who are often chroni- management issues mentioned previously.
cally poor. During the Covid pandemic there has
been an effort to reconstruct and revitalise the
social cash transfer programme, so hopefully 4 Narrowing Escape Routes
results will be better in future.
Provincial variation in chronic poverty has The overwhelming story in Zambia during the
been marked. The results from Fig. 9.6 suggest 2010s is that there are few escapes from poverty,
that Luapula, Northern, and Western provinces that temporary escapes are often not converted
are most vulnerable to chronic poverty. These are into sustained escapes, and as a result sustained
also the three provinces with the highest depth of escapes can be hard to find. Combining the quan-
poverty in both 2010 and 2015. Rates of chronic titative and qualitative evidence together, we can
poverty are also higher in Eastern and Muchinga see two broad socio-economic pathways, often
provinces relative to the country-wide average. supported by improved savings, asset develop-
Figure 9.4 above also shows that only Central, ment and collaborative spousal relationships,
North Western, and Southern provinces generally characterising sustained escapes from poverty.
fall within the country-wide range of people liv- Firstly, a combination of education (com-
ing in chronic poverty or never poor. This then pleted primary in rural areas, or lower secondary
illustrates the extent to which national averages in urban areas), access to electricity, and on and
can be misleading or fail to capture the variety of off-farm diversification was a common pattern
subnational differences especially for people in underlying sustained escapes. Completing lower
chronic poverty or the never poor who face rela- secondary education (at least) is associated with
Fig. 9.3 Receipt of assistance by poverty trajectory, 2019. Source: Diwakar et al. (2021)
9 Layered Crises Preventing Poverty Reduction: An Analysis of Zambian Poverty Dynamics and Policy… 129
% of households
80 80
60 60
40 40
20 20
0 0
er l
Ea el t
Lu ern
ut n
Lu la
No No aka
W ern
uc n
W ern
a
er l
Ea elt
Lu ern
Lu la
No o ka
ut n
uc n
W ern
a
W ern
pp ra
pp ra
ng
So ter
M ter
ng
So ter
M ter
u
u
sa
Co ent
b
Co ent
ap
ap
st
rth rth
h
s
hi
st
h
rth rth
hi
es
es
es
es
C
C
Source: Diwakar and Bwalya (2021) The grey dotted lines represent the national average bounded
estimates, and the red vertical lines the province average bounded estimates.
Fig. 9.4 Estimates of the always-poor (left) and the never-poor (right), 2010–2015. Source: Diwakar and Bwalya
(2021)
resilience—being able to resist falling back into Secondly, in smallholder farming an increase
poverty, and was especially important in towns in own cultivated land (which could be pur-
and cities. Access to electricity enabled diversifi- chased, inherited or access through a traditional
cation as well as children’s education. The rollout authority) was not only associated with an
is slow in rural Zambia (4% have access, com- increased probability of a sustained escape from
pared to 67% in urban areas); many could benefit poverty, but was also typically accompanied by
from faster electrification, especially off grid. increased use of irrigation—whether own culti-
Diversification is often central to a sustained vated, rented in, borrowed in or a garden. Rates
escape—within farming especially away from of irrigation increased between the first and last
maize, which has been a major source of reduced wave of the RALS panel for all trajectories, high-
rural incomes (Diwakar et al. 2021), and is a est in 2019 for sustained escapers, followed by
major limitation on diet diversity (Mwanamwenge the never-poor. The most common use of irriga-
and Cook 2019), towards other crops and live- tion was irrigated gardens (Diwakar et al., 2021).
stock, and away from farming to nonfarm jobs Livestock ownership was also important, and the
and businesses, most commonly in retail. Crop only significant correlate of a sustained escape
diversification has been found to increase farm from the lowest ($0.70) poverty line, indicating
income, and food security, and is promoted by how important livestock can be to the poorest
extension, irrigation, asset endowments, and people.
market access (Mofya-Mukuka and Hichaambwa From the qualitative research we can observe
2018). key moments in these sustained escape trajectories
Commonly different members of a household included, firstly in young adulthood: most sus-
pursue different economic activities. tained escapers had not got further than primary
Diversification into the rural nonfarm economy, education, with few exceptions (mainly women).
commonly retail trading, is often a source of pro- However, they had a strong focus on their own
tection against poverty. Being close to roads and children’s education, which was beneficial to the
markets by comparison increases the probability sustained escape, for example, an educated daugh-
of a sustained escape, as these infrastructures ter helping with purchasing goods to trade. The
help reduce some sources of risk. However, value of a young couple pulling together was very
women or young adult headed households face evident. Relatedly, women’s routes out of poverty
significant constraints in diversification, as do are largely through collaborative spousal relations
severely poor households. in livelihoods during marriage and petty trade/
130 A. Shepherd et al.
trading. However, these are constrained by wide- It is very clear that sustaining escapes from
spread teenage pregnancy and early marriage fre- poverty diversification and asset accumulation
quently followed by divorce, and caring has been supported by social capital, as well as
responsibilities where there are high dependency universal health and education services. This has
ratios, especially in rural areas. been easier in urban areas where physical infra-
Compared to other countries where the structure and services have been more available.
Chronic Poverty Advisory Network (CPAN) has Services in rural areas have been significantly
worked, savings institutions are becoming more more limited, though there our field researchers
widespread but not omni-present in Zambia, as noted many new investments in social infrastruc-
reflected in its recent 2020 FinScope survey ture. Social capital to see children through educa-
(Finscope Zambia 2020) showing that while tion and deal with out of pocket health
financial inclusion through mobile money has expenditures has often made the difference
increased significantly, especially in towns and between escaping poverty and remaining poor in
cities, still a third of the population is financially many cases. However, sometimes meeting these
excluded, another third still dependent on infor- expenditures can be at the expense of food con-
mal institutions, and more so in rural areas. Asset sumption, savings and investment in businesses.
accumulation often through savings is a critical
aspect of escaping poverty; but in Zambia poor
and impoverished people have been struggling to 5 Growing Downward
hold onto assets as downward pressures have bit- Pressures 2015–19,
ten hard especially during the 2015–20 period. and Covid 19 in 2020
The accumulation of assets was common amongst
sustained escapers through savings (from profits The downward pressures of the last five years
from goods or produce sold) and/or through have been extreme. Not only has economic
social capital—inheritance or gifting capital or growth slowed, inflation also spiked in the
land from kin, sometimes combined with allow- drought periods of 2015–6 and again during 2019
ances and connections with people in political and even more during Covid. In rural areas, a
positions or provision of farming inputs or skills. decline in the mean total income between 2012
Commonly livelihood diversification would fol- and 2019, particularly pronounced for 2019,
low by combining livelihoods: either fishing + when there was a big decline in income from
farming + trading/bartering + money lending or maize sales in particular. Even the poorest people
formal employment + trading. Assets included saw their incomes decline over this period
houses, land (farm and/or urban land to develop), (Diwakar et al., 2021). The qualitative data also
shops, vehicles, livestock, boats & fishing nets. records this last period as devastatingly bad,
What was noticeable for both young adult and framed by a depression in 2016 caused by load
middle aged sustained escapers was the capacity shedding, drought, devolution and impacts on
to withstand hard times reflected by family strife, availability of credit, a drought which generated
alcohol abuse, poor health, loss of assets (e.g. in near-famine conditions in largely opposition-
one case a council destroyed a market stall). held south and west of the country, and a looming
Despite these difficulties, gradual improvement debt crisis limiting public expenditure on ser-
in well-being over time manifested in more food, vices. The 2016 and 2019 droughts had a devas-
education of children, better housing, and a wid- tating impact on farm incomes and informal
ening asset base. In recent years they have been sector incomes, especially those dependent on
able to buffer the tougher economy and take electricity supplies. Political competition also led
advantage of gaps in the market. In rural areas to widespread ‘gassing’ incidents amid an
retaining physical strength was especially impor- increasingly unforgiving political environment—
tant; failure to do so could be a source of impov- as the incumbent president moved to consolidate
erishment, for example in older age. power in the presidency and oppress opposition
9 Layered Crises Preventing Poverty Reduction: An Analysis of Zambian Poverty Dynamics and Policy… 131
politicians (Hinfelaar 2021). Moreover, as we cost. A World Food Programme (WFP) report
have seen, declining and unpredictable rainfall, noted that women headed households lost assets
limited access to markets coupled with high food while male headed households accumulated them
prices, chronic food insecurity, and poor health- on average during 2016–17, immediate post-
care are some of the structural constraints pre- drought years. Environmental factors include
venting rural Zambians from escaping poverty changing rainfall patterns which affects planning
(UNDP, 2015). for farmers; poor rainfall which affects farm
Economic drivers of descent into poverty in yields and power production; and severe droughts,
rural and urban areas in the qualitative data magnified by global warming.
include high inflation, limited economic and live- Covid19 has brought significant loss of
lihood options, not being well-endowed with income, resilience and food security. Zambia’s
assets, practicing low return and subsistent partial lockdown from March 2020 led to loss of
income generating activities, closure of indus- employment for some, with little subsequent
tries, and limited access to start-up capital for rehiring; loss of business income for many, fol-
business. Some of these are reflected in the quan- lowing a big slump in demand; significantly
titative data, where respondents report the top increased cost of basic needs including food,
five reasons they perceive their households to be partly because of devaluation of the Kwacha,
‘worse off’ in 2015 compared to a year earlier partly because of continued high maize prices
(Fig. 9.5). In the qualitative data, rural areas are following the 2019 drought, and the increased
particularly affected by late delivery of farm cost of farm inputs; and there was also a decline
inputs, price controls for farm produce and or non-receipt of remittances, of special signifi-
exploitative ‘briefcase’ buyers for farm produce. cance to some of the poorest people. Many failed
Social drivers of descent include; little or no edu- to save, and increased borrowing to survive
cation, which provides significant protection (CPAN 2021). High frequency phone surveys in
against impoverishment as well as support for June and November/December 2020 recorded
escapes from poverty; poor health, larger house- similar findings (IPA, 2021). After the second
holds and limited social and physical infrastruc- survey round 59% reported income losses, more
ture. Gender related drivers of poverty descent in than 40% of adults reported reducing meal por-
urban and rural areas mainly involve unfair divi- tion sizes or the number of meals, one out of five
sion of labour and limited implementation of respondents said they had no way of getting
laws relating to gender. Gender factors specific to emergency assistance, and two out of five said it
rural areas include, teenage pregnancies, teen would be very difficult, indicating a dearth of
marriages, and school dropouts due to long dis- social capital and social cohesion (IPA 2021),
tances to school, financial constraints and social supported by CPAN’s qualitative research.
Richest
Second richest
Middle
Second poorest
Poorest
Fig. 9.5 Subjective top five reasons households are ‘worse off’ in 2015 vs 2014. Source: Diwakar and Bwalya (2021)
132 A. Shepherd et al.
Women experienced much steeper job losses and to selling out of most of their assets as a means of
survival. They also depended on government and
reduction in earning than men. Although a few Oxfam for handouts. (INT102, Diana,
respondents reported increased earnings, liveli- Sustained Escaper)
hoods and wellbeing had clearly not returned to
pre-Covid levels (IPA 2021). And it should be Demographically, households with a large
noted that a phone survey in Zambia would not number of younger and/or older persons are vul-
cover much of the poorest—those without nerable to poverty descents (Diwakar et al.,
phones, or electricity to charge them. 2021), at least in part reflecting the smaller
Asset sales during Covid19 also increased from amount of per capita assets or land size typically
25% to 35% of households reporting it in the two in larger households. Zambia’s population growth
rounds of the IPA survey; over half of respondents will put even more pressure on the demand for
depleted savings, two out of five households bor- jobs, health care and other social services (World
rowed even though they might not be able to repay Bank 2020). The rising costs of housing, educa-
and almost one fifth stopped loan payments (IPA tion, farm inputs and other services have also
2021). CPAN’s qualitative research noted wide- made escaping poverty increasingly challenging
spread disposal of household assets as a result of and contributed to impoverishment.
downward pressures and shocks even before Health shocks too can lead to the sale of assets,
Covid struck, such as due to illness and death. and reduced food consumption to pay medical
Impoverished and transitory escaper households bills. Deaths are strongly present in life history
reduced their land holdings between 2015 and accounts, with significant negative effects. Alcohol
2019, although in the RALS survey both catego- abuse was also common, frequently bound up in
ries surprisingly recorded an increase in overall the often-impoverishing processes of separation
asset values. Some enterprises, like beer brewing/ and divorce, along with infidelity and gender based
selling were liable to asset confiscation. On top of violence (Bond et al. 2021). Our data provides
the de-asseting which has already taken place, the examples of households where different forms of
Covid-related asset sales can be expected to bring illness has led to poverty descent. Households
many households into chronic poverty. which were once non-poor have been made chron-
Among environmental shocks, the drought ically poor due to illnesses and deaths.
leading to near famine conditions in 2019/20, fol- “After my husband died, we started struggling
lowed on from droughts in 2018 and 2015, on top with fertilizer and now we do not farm that much
of shrinking farmland holdings. The RALS sur- and this affects our eating, we do not eat well
vey records a massive drop in maize income because we cannot farm enough food. We were eat-
ing three meals a day before my husband died but
(Fig. 9.6), and with Zambia’s maize occupying now we only have 1 to 2 meals a day, it is a con-
three fifths of farmland, most of it in the small stant struggle. The death of my spouse was the big-
scale sector, this is a very sensitive indicator of gest shock in my life, my livelihood changed very
income. Adding to these rural pressures are the much and now we struggle with everything. I have
no financial assistance now. Even thatching the
reduced availability of land, the deterioration of house I need to pay someone, but I have nothing to
land quality especially soil fertility and corre- pay them. Now we live as if there is no person and
sponding rising fertiliser needs, but also rising yet there is a person…” (Clementina, chronically
fertiliser prices and chronic delays availability of poor woman)
subsidised fertiliser. All of this sharpened by
increasingly frequent droughts, and in some
cases flooding. 6 Conclusion and Policy
The 1992 drought was a huge blow to the maize Priorities
farming as no single cob of maize was harvested.
The insurance company however covered the cost Zambia’s combination of persistent high and
of the loan from Lima Bank and that was the end of deep poverty levels, an unsustainable debt bur-
Diana and her husband’s access to the loan ser-
vice. The lack of access to credit sustained the den, environmental decline and climate volatility,
down fall of their farming career and they resorted and the effects of highly contested politics on
9 Layered Crises Preventing Poverty Reduction: An Analysis of Zambian Poverty Dynamics and Policy… 133
140
120
100
80
60
40
20
0
2012 2015 2019
Central Copper be Eastern Luapula Lusaka
Muchinga Northern NorthWest Southern Western
Fig. 9.6 Per capita income from maize production by province over time. Source: Diwakar et al. (2021)
policy development and implementation includ- which could otherwise be expected to drive pov-
ing disaster risk management, mean that its pov- erty reduction in a competitive political system.
erty will persist into the future unless there is Assuming this political system remains in place,
significant action on several fronts backed by progress will then depend on the initiatives indi-
some political change. Projections through to vidual presidents and their ruling parties can
2060 show Zambia as still having very large make.
numbers of poor people in business-as-usual sce- It is to be hoped that the combination of near
narios; even the best case scenario with pro-poor famine conditions in 2019, unsustainable debt
policies and investments shows poverty reducing and the continuing Covid pandemic may be
gradually, but only after 2030 (Rafa et al. 2021). enough to create conditions for a turning point in
The shrinking natural resource base for rural policy making. Zambia is a middle-income coun-
livelihoods combined with the growing incidence try since 2011 because of the level of its national
of drought and flood episodes and a politicised income, but it remains a Least Developed Country
disaster risk management response are important (LDC), because it is economically vulnerable and
aspects of the explanation for persistent rural has a ‘human asset’ deficit (especially in mater-
poverty. Strong policy responses are needed at nal mortality and undernourishment). It will be
least on these three fronts if persistent rural pov- challenging for Zambia to graduate from LDC
erty is to be challenged in the coming years. The status without tackling its human development
market disruptions during the Covid pandemic and economic vulnerability records.
have further stressed vulnerable rural households, A key issue which policy needs to respond to
some having sold assets to survive, for example. is a nexus of rural economic, environmental and
The political economy analysis shows a pat- disaster risk management constraints on small-
tern of government budget allocations which his- holder farm and rural income, part of which also
torically favour the urban and formal sector affects the urban informal sector. Indeed, the
segment of Zambian society, with women, urban main dimensions of this crisis are the (a) volatil-
poor and rural areas left (far) behind. The politi- ity of farm income, which was hugely reduced
cal system is one of enduring presidential execu- during the year of our study, 2019, but had previ-
tive power and a politization of the bureaucracy, ously been significantly reduced in 2016, in both
in which loyalty to the ruling party is key cases as a result of drought having an impact on
(Hinfelaar 2021). This has undermined the pos- farm production; (b) a process of de-asseting
sibility of downward accountability to citizens over the decade, where, as a result of repeated
134 A. Shepherd et al.
shocks and stresses households have sold or oth- consistently proved an escape route from poverty
erwise lost and not been able to replace assets; (Shepherd et al. 2020). Re-asseting poor house-
and (c) a long term failure to develop adequate holds will be a major aspect of future poverty
alternative sources of soil fertility and soil mois- reduction in Zambia. Poor women headed house-
ture as bush fallowing systems have run out of holds should be a particular focus, since they tend
fallow land; and (d) inadequate disaster risk to have lost access to assets. Asseting pro-
responses. grammes could be built on the foundation of a
Volatility of income growth is a major inhibi- social cash transfer scheme, if that foundation
tor of reducing poverty at national level (Shepherd could be made more reliable and predictable than
et al. 2017), and here at micro-level too. Farm it has been. Social cash transfers also need to be
households with diversified farms and some non- able to adapt to changing circumstances to assist
farm economic activity have done significantly in warding off disaster. While there was a one-off
better than those highly dependent on maize, phone payment to SCT recipients during Covid
Zambia’s main crop. Policy remains heavily this was barely enough to mitigate the effects of
focused on maize and supporting soil fertility the pandemic.
with subsidised fertilisers. Some diversification The third and related dimension is the inade-
into beans and groundnuts has been promoted quacy of public and private investment in resource
recently by the Farmer Input Support Programme conservation. Land remains a major asset, as are
(FISP) but the emphasis remains strongly on fisheries for poor rural Zambians. Over the
maize. Fisherfolk facing declining lake and river decades a number of NGOs have promoted ‘con-
fish stocks have been advised to diversify into servation agriculture’, which advocates mini-
farming, but also livestock. Such policy trends mum soil disturbance, permanent soil coverage
need to be strengthened, and the focus on maize by living or dead biomass, and diversification of
reduced in favour of other crops, livestock, and crop rotations, but adoption has been partial, due
nonfarm economic activities. The FISP accounted to the labour intensity required, lack of mecha-
for 5% of government expenditure in 2020, so nisation services for smallholder farmers, market
there is major potential to reform this aspect of access issues and a variety of context specific
policy. social and cultural issues (Zulu-Mbata et al.
The second dimension relates to the scarcity 2016).
of assets among poor households. If a household There is a need to move from conservation
had a source of manure with which to fertilise its agriculture to conservation practices which can
farmland it would need access to means of trans- work given farm household circumstances and
port to get the manure to farm fields which might constraints (Rodenburg et al. 2020), and for the
be some distance away. Carts and oxen are rare, state to give much stronger support to soil and
but access to them would be an important asset water conservation. Zambia could learn from the
for such farm households. The equipment to irri- successes and failures in other countries such as
gate plots of land could also reduce the effects of Ethiopia (Dalka 2018) where adaptation of soil
climate volatility. Strengthening the policy focus and water conservation design to local context
on livestock would be especially beneficial: the was found to be the major issue; likewise a sys-
majority of chronically poor rural Zambians have tematic review found that there were no universal
very few livestock other than a few chickens, and factors governing adoption of Soil and Water
it is a potential source of manure (which would Conservation n smallholder farming (Wauters
help to address the soil fertility crisis), milk, cash and Mathijs 2014). In identifying suitable
income, and a savings medium in a situation approaches in Zambia this systematic mapping
where the latter are scarce. Zambia could learn (Thorn et al. 2016) could be a useful starting
from Rwanda’s Garinka programme, which dis- point.
tributes cows and smaller stock to poor house- The fourth dimension is the extent that disas-
holds who can manage them, and this has ter risk management processes succeed in
9 Layered Crises Preventing Poverty Reduction: An Analysis of Zambian Poverty Dynamics and Policy… 135
providing relief when it is needed. Despite a well example. Specialist UN agencies like FAO and
worked out legal basis and policy revised in 2015, UNEP should be capable of providing such
an institutional system, and an operational plan assistance.
developed in 2019 (African Risk Capacity/
Government of Zambia 2019), the government’s
Disaster Management and Mitigation Unit led a References
slow response from government to the 2019
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(2020) Rebooting Rwanda’s poverty reduction after a
Resilience of Small-Scale Fisheries
to COVID-19: A Case Study 10
from North Bali, Indonesia
Christopher Rosado, Eveline Kurniati,
and Mika Peck
© The Author(s), under exclusive license to Springer Nature Switzerland AG 2022 137
A. Antoniades et al. (eds.), Financial Crises, Poverty and Environmental Sustainability: Challenges
in the Context of the SDGs and Covid-19 Recovery, Sustainable Development Goals Series,
https://doi.org/10.1007/978-3-030-87417-9_10
138 C. Rosado et al.
Fig. 10.2 Map of the study region, Buleleng (North Bali, Indonesia) shown in outline, with Les village identified on
map
that can not only withstand initial damage, but research framework. A mesh of influences sup-
also recover quickly from impacts, providing a ported the creation of the resilience indicators
pathway to thriving in post stressor scenarios. In developed for this study most notably but not
essence, community resilience is the ability of a limited to: nine core elements of community
community to adapt, survive and potentially resilience identified in Patel et al. (2017), six cap-
thrive despite stressors such as a pandemic, natu- ital fields described in Stanford et al. (2017)
ral disaster, or global conflict. FLIRES check which combines Sustainable
To understand the multifaceted impacts of the Livelihoods Approach with RAPFISH methodol-
pandemic, a cross sectoral review of literature ogy, application of multilevel resilience lens sug-
from fisheries management, community develop- gested by Leite et al. (2019), COVID-19
ment and COVID-19 was used to develop a susceptibility scale created in Peters (2020) and
10 Resilience of Small-Scale Fisheries to COVID-19: A Case Study from North Bali, Indonesia 141
forecasting of virus transmission against health- 9. Fisher Income – direct and indirect finan-
care capacity in Bali described by Wirawan and cial impacts to ability to generate income from
Januraga (2020). The preliminary research crite- fishing
ria were based on reoccurring themes throughout 10. Financial habits – saving, debt, assets
the spectrum of literature that indicated potential and access to credit in relation to resilience to
for resilience and vulnerability, incorporating the COVID-19
nuances of fisheries and COVID-19. The criteria The fishers participating in this case study
were then tested through initial interviews and fall under the Indonesian government classifi-
refined based on the relevance expressed from the cation of small scale fishers, who are defined as
local perspective, resulting in ten indicators “fishing to meet daily needs and operating with
which encapsulate resilience and vulnerability to or without a fishing boat less than 10 gross ton-
COVID-19 in small-scale fisher communities. nage (GT), in accordance with Law No. 7/2016
The resulting analysis framework consists of “Protection and Empowerment of Fishers”
10 permeable indicators, summarized below, to (Halim et al. 2019). From March to December
capture cross-cutting elements of health, eco- 2020 our study followed 10 small scale fishers
nomic, social and environmental issues to enable and their family from the village of Les in the
interpretation of COVID-19 impacts on small Buleleng district of North Bali to capture
scale fishers. changes at the community level. An interview
guide with key questions built around the indi-
Resilience Indicators cators was developed and used during monthly
check-ins to track changes. Interview questions
1. Fisher Households – demographics of varied based on the fisher, fishing group asso-
fishers, households, and the surrounding commu- ciation and their target fish. Overall, the fishers
nity in relation to potential spread and severity of were asked what has changed with respect to
infections social and economic norms due to COVID-19
2. Medical Infrastructure – takes stock of and how the community is navigating the
government healthcare infrastructure and acces- changes. A series of semi-structured telephone
sibility of services capable of dealing with poten- interviews were conducted from March to June
tial outbreaks and general healthcare as lockdowns prevented non-essential travel
3. Preparedness – explores the community between villages. From June to December in-
experience of engaging with healthcare services person interviews, focus group discussion and
prior to COVID-19 and local behavior that can site visits were used to collect data.
impact community health There are two level of data analysis: (1)
4. Social Adaptability – evidence of com- Through the lenses of vulnerability and resil-
munity willingness to adapt social and cultural ience, based on 10 indicators that are broken
activity to mitigate impacts of COVID-19 down into the dimensions of health, economics
5. Communication – considers formal and and environment as they interact with social
informal channels used to disseminate informa- dynamics during COVID-19 and (2) Considering
tion and messaging locally the results against the United Nations Sustainable
6. Historical Data – examines how local Development Goals. The information is finally
knowledge, community networks and social integrated within evidence-based policy
dynamics can manifest resilience recommendations.
7. Household Income Diversification –
considers income opportunities and the diversity
of livelihoods locally available 3 Results
8. Fisheries Supply and Demand – focuses
on changes in supply and demand impact on the Results are interpreted through the ten resilience
fishing activity and vulnerability indicators below.
142 C. Rosado et al.
Fig. 10.4 Distance
from the study site (Les,
North Bali) to major
hospitals
Table 10.1 Population and health access in Tejakula facility/1000 population). Grey row illustrates healthcare
Sub-district (BPS Kabupaten Buleleng 2019) highlighting comparative provision at the study site of Les
access to healthcare in relation to population (healthcare
Paramedic (per
Health Facility (per 1000 populaon)
1000 populaon)
Locaon Populaon
Puskesmas Mobile General
Puskesmas Posyandu Midwife Nurse
Pembantu Puskesmas Praconer
employer and employee (Heriyanto 2018). The local government disseminates information via
fishers from Les with stable alternative employ- signage placed around the community as well as
ment (60%) other than fishing, had employer pro- announcements from the Puskesmas. The com-
vided health insurance (BPJS Kehsehatan). The munity was initially made aware of recom-
remaining fishers (40%) have the Indonesian mended prevention protocol by the local
Health Card (KIS), which is a fully subsidized government and Pukesmas through weekly loud-
health insurance program under BPJS provided speaker announcements in the morning at the
by the Indonesian government to ensure that all local wet market. Government further reinforces
Indonesian citizens are protected by comprehen- health protocol through banners which are dis-
sive, fair and equitable health insurance for low played along main roads, police stations and
income members (Heriyanto 2018). schools in the village. The local Pecalang (tradi-
tional community guards) along with police
remind and monitor villagers to follow mask
3.4 Social Adaptability wearing protocol at traffic junctions.
The most prevalent source of information is
In Les adjustments to economic, social and reli- personal interactions using phones and face-to-
gious norms were imposed on locals. The wet face communication with friends, family and
markets reduced operating hours from 12 to 8 h neighbors who often pass along updates from wet
daily, as they were identified as potential infec- market announcements. The villagers are famil-
tion hotspots from end of March to mid-May. iar with social media, commonly used to coordi-
Only residents were allowed in and out of the nate events and share news about family and
community during April and everyone who friends. The most used social media platform
passed the checkpoints were required to wash among fisher households is Facebook. During
hands. From May essential travel between vil- COVID -19 Facebook posts about news, govern-
lages was allowed but the government monitored ment announcements and local awareness videos
travel in and out of the community until June. are shared, but infrequently.
Celebrations and community gatherings were
cancelled during March and April as Bali worked
to understand the prevalence of the virus on the 3.6 Historical Data
island (Erviani 2020; Winterflood 2020). Schools
were closed in March once the pandemic risk was Local fishers hunt for both aquarium and a range
recognized by the national government (Dagur of food fish. There are numerous fisher groups in
2020). Island-wide schools were closed but, Les and adjacent villages where many fishers are
depending on local resources, the classes were affiliated with more than one fisher group. In
moved online to some degree. The elementary North Bali, the most caught food fish are Grouper,
schools in Les transitioned online, with the par- Snapper, Fusilier, Mackerel, Scad, Squid,
ents responsible for picking up and dropping off Octopus and Tuna. Traditionally, a variety of fish
assignments once a week. Middle school and for consumption can be caught year-round and,
high school students had a similar system, pick- depending on the target species, some months are
ing up and dropping off assignments once a week better than others. Most fishers believe that later
and studying remotely. in the year, from October to December, is the best
time to catch the most sought-after food fish.
Whereas, the season for aquarium fishing is from
3.5 Communication March to November, however there is no clear
consensus among fishers on fishing seasons.
Community captures information about the pan- The practice of marine aquarium fish collec-
demic through personal communication, local tion in Les village took off in the 1980s after
government messaging and social media. The locals were encouraged by middlemen looking to
10 Resilience of Small-Scale Fisheries to COVID-19: A Case Study from North Bali, Indonesia 145
export endemic species abroad. The sudden high ers causing an abundance of reef fish at local
demand for aquarium fish coupled with unsus- markets. Additionally, local seafood demand
tainable fishing practices introduced by an influx connected to tourism has disappeared and a lack
of more experienced non-local fishers lead to the of cold storage has increased instability. The
depletion of local fish stocks and damage of coral middlemen are hesitant to purchase the daily
reefs by the early 2000s (Frey 2013; Muswar catch at pre-COVID-19 prices and have adjusted
et al. 2019; Pasaribu-Guzina 2013). To counter- for this risk by purchasing the fish in the same
act the damage to the environment various quantity but at a reduced price. The increased
non-
governmental organizations stepped in to abundance of reef fish available in the local mar-
help protect the coral reefs and fish stock by ket has driven down both demand and price
introducing sustainable fishing methods around simultaneously.
North Bali.
Fig. 10.5 Reduction in daily income of fishers from seafood and aquarium fishing in 2020, based on interviews in Les
village, Bali, Indonesia
10 Resilience of Small-Scale Fisheries to COVID-19: A Case Study from North Bali, Indonesia 147
4.1 Community Vulnerability infants, and toddlers key services, were not avail-
able for community members until June 2020.
4.1.1 Health The local Puskesmas most notable communi-
The potential for the Indonesian health care sys- cation channel with the community is to announce
tem to become overwhelmed from outbreaks is weekly updates and COVID-19 protocol by loud-
high, based on the low number of medical profes- speaker at the traditional markets in the morning.
sionals, infrastructure, and services available in This announcement from the market is then
relation to the population (Wirawan and Januraga passed along the community by word of mouth.
2020). In Les, for example, only a single GP While this is effective in reaching many people at
attends a population of 8040 (Table 10.1) com- once, it leaves lots of room for misunderstand-
pared to an average of 3.5 per 1000 population ings. Currently the wives of the fishermen in the
across the OECD. In addition, fisheries as a busi- village believe that it safer to buy food and prod-
ness, is a high-risk activity in terms of COVID-19 ucts at the side of the road around the village than
exposure, often requiring extended interaction in the wet market. The increasing trend of ven-
with other fishers and buyers. The fisher’s house- dors selling produce on the roads, rather than the
holds with an average of 6 people living together market, minimizes the number of community
also poses high risk for spread, and challenges to members that hear the announcement directly.
isolate, if someone becomes ill.
Bali, with a population of 4,300,000 (Wirawan 4.1.2 Economic
and Januraga 2020) before COVID-19, had a The aquarium fish catch is primarily exported to
total of 6948 hospital beds available on the island aquarium businesses abroad, whereas the seafood
with only 446 of those being intensive care unit catch is split between local/regional consumption
beds (Wirawan and Januraga 2020). Medical and export of the higher value fish such as tuna.
infrastructure, for a population of 61,342 in the COVID-19 lockdowns impeded the ability to
Tejakula Sub-district, includes only two supply fish abroad because of logistical chal-
Puskesmas and no major hospitals within the lenges. A reduction in demand, limited access to
sub-district (BPS Kabupaten Buleleng 2019). buyers and abundance in local supply has dam-
Before COVID-19 the management of the health aged small-scale fisheries livelihoods.
system in rural areas was already challenging As the local fishers explain, the supply chain
with staff in the health system network undertak- traditionally has been reliant on the ability of the
ing dual practice, supplementing the lower salary middlemen to access regional and international
paid to public servants with private practices markets. The fishers have no direct access to the
(Syah et al. 2015). The local dedicated staff of the local collectors or retailers to sell the aquarium
community health centers often split work fish, so they are economically reliant on middle-
between public and private health providers add- men. Tuna which is often sold directly to middle-
ing to the fragility of an already limited health men that in turn sell to the hotels, restaurants and
infrastructure. The high workload of the general exporters are purchasing infrequently, or not at
practitioners at Puskesmas is a concern since they all because of lack of cold storage. Daily fishing
commonly have double duties as managers and income decreased by as much as 50% during
clinicians treating dozens of patients in a day. lockdown, and in the months following the initial
Due to the low numbers of general practitioners lockdown the daily income stabilized at 20–30%
in rural areas the government authorizes mid- lower than income before COVID-19 (Fig. 10.5).
wives and nurses to provide primary care at In response to the decline in demand from
Puskesmas and auxiliary units (Syah et al. 2015). middlemen the frequency of aquarium fishing
Children health services in Les were paused dur- has reduced as there is no access to buyers other-
ing lockdowns, from April to June 2020. Except wise. Some tuna fishers have chosen to stop fish-
for prescheduled vaccines, the interruption of the ing altogether until the price of tuna or demand
Posyandu service meant that health checks for rises to a point that is economically viable, con-
148 C. Rosado et al.
sidering effort and the cost of fuel. Reef fish can plastic packaging market size is projected to
be caught and sold daily to local buyers in the grow from USD 909.2 billion in 2019 to 1012.6
village or eaten. Consequently, fishers increased billion by 2021, annual growth rate of 5.5%
the number of days in a month spent targeting (Adyel 2020). The pandemic has also limited
reef fish, creating an abundance in local markets social gatherings, including beach and underwa-
and pushing the value of fish per catch down. The ter clean ups, that communities in North Bali
reduction in value of reef fish forces the fishers to periodically do during non-Covid times. Most
collect bigger catches to maintain pre COVID-19 communities have not organized a beach cleanup
income levels. since late 2019 meaning trash has accumulated in
many areas, this is additional to reduced ecosys-
4.1.3 Environment tem monitoring and coupled with increased fish-
Local risk to the environment that COVID-19 ing pressure.
brings is an influx of unemployed adults return-
ing to the village after losing jobs in the tourism
and service industry in the city. Fishing activities 4.2 Community Resilience
now have an extra emphasis on catching reef fish
for local consumption compared to before 4.2.1 Health
COVID-19. This is due to the reduction in The various local partial lockdowns from March
demand for traditional catch and unemployed to June 2020 affected everything from religious
family members returning to their home village ceremonies at temples to the full closure of popu-
and becoming novice fishers to contribute to their lar tourist beaches. The Balinese government lev-
households. There has been a significant increase eraged strong cultural ties (Aditya and Suhartono
in fishing activity nearshore, with 40% of the par- 2020a) and community governance in the nearly
ticipants increasing the number of days in a 1500 villages to limit COVID -19 transmissions.
month they fish for reef fish. Moreover, novice Across the island traditional guards known as
fishers do not have experience of how coral reef Pecalang in Bali, who normally maintain village
ecosystem degradation at Les village has affected security and customary ceremonies (Christensen
biodiversity. The fishers may understand the mes- 2013) have been mobilized to monitor travel
sage of conservation and see its merits but oppose between communities and enforce other tempo-
it because it threatens their livelihoods and way rary closures such as beaches (Pangestika 2020).
of life (Jentoft 2020). The experienced perma- Religious leaders along with worshipers have
nent fishers have seen the connection between embraced social distancing by limiting access to
population decline of targeted species and local temples and temporarily stopping ceremonies.
extinction of some reef fish such as Blue Tang, During the partial lockdown beginning in April
Emperor Angel and Blue-face Angel (LINI the temples were only open to the priest, with
2015). Pandemic fishers are a trend island-wide community members encouraged to pray at
with the pressure on reef fisheries unlikely to home. Youth groups supported the effort and
reduce until the tourism sector returns. coordinated volunteers to secure access points in
Even before the pandemic, trash in the ocean and out of the village daily. Fishers from the
had been a global eight million metric ton (NOAA community also supported the youth and
2021) problem annually. In 2015 Indonesia was Pecalang by joining guard duty.
identified as the world’s second largest contribu- Many of the vendors who normally have stalls
tor to ocean plastic (Jambeck et al. 2015) which in the traditional market have relocated to road-
directly affects beaches around Bali with tons of side locations in recognition that the customers
plastic arriving annually with the wet season were hesitant to enter markets, due to inability to
(Mogul 2021). Covid-19 has exacerbated this social distance, and fears of increased risk of
with the production of personal protective equip- infection. There is now a substantial increase in
ment, takeout and delivery packaging. The global mobile vendors selling items out of their cars,
10 Resilience of Small-Scale Fisheries to COVID-19: A Case Study from North Bali, Indonesia 149
trucks and even motorbikes along the main roads working fluctuated from three to two working
adjacent to the traditional market. After months adults, with a significant amount of turnover
of partial lockdown, ending in June 2020, with- among those who managed to stay employed.
out any major outbreaks the official restrictions Despite the loss of one income source the house-
have eased allowing daily life to resume with the holds have been able to consistently secure alter-
new normal protocols such as social distancing, native forms of day labor.
mask wearing and remote learning for children. An additional layer of resilience for the fishers
Locals can visit the temple again and the fisher in our study comes from the various options
groups are actively organizing around local available to secure credit locally. The village
coastal management issues but limiting physical economy has different forms of credit available
interaction to distribution of aid to support that allows the fishers to take out loans with
group’s members and biannual meetings con- favorable and flexible terms that considers local
nected to major religious ceremonies. context. The fisher groups are the most common
sought-after provider of small loans because of
4.2.2 Economic understanding of the sectors challenges. An
Small scale fishers in the village are tackling the example of this flexibility during the pandemic is
economic impact of COVID -19 head on. The the decision by some of the fisher groups to defer
fishers and many in the community are comfort- full payments and only collected the interest on
able with wearing different professional hats, outstanding loans.
collaborating, and supporting each other during
tough times. On average the fishers have 23 years 4.2.3 Environment
of experience and can trace their tradition of fish- The village of Les is fortunate to have had many
ing back 3 generations. This legacy of fishing interventions from local government and non-
indicates that most fishers have experienced sev- governmental organizations working with the
eral economic shocks such as the Bali bombing, community to improve coastal management over
Mt. Agung erupting and now COVID -19 (Laula the course of decades. The traditional fishers
and Paddock 2020). have experienced the impact of overfishing and
The aquarium fishing season in North Bali understand the importance of sustainable prac-
typically runs from March to November with tices. Past overfishing led to the introduction of
these months the most profitable for local aquar- more sustainable fishing methods, using barrier
ium fishers. Unfortunately, in March 2020, and scoop nets, from the early 2000s until today
global lockdowns impeded Bali fishery exports (Frey 2013; Pasaribu-Guzina 2013). Scattered
as the fishing season began, causing an unex- along North Bali there are many coral restoration
pected slump in demand. Although 90% of the projects which also help to build a local knowl-
fishers participating in this study consider aquar- edge with firsthand experience in ecosystem
ium fishing as their primary livelihood, as a cop- management. Further capacity building on
ing mechanism, when faced with previous coastal management continues to provide knowl-
economic downturns they diversified their edge on destructive fishing practices and coral
income streams. Fishers began targeting food reef restoration to the fisher groups. Most recent
instead of aquarium fish, since there was still a intervention took place in December 2020 imple-
local demand, and taking on day labor opportu- mented by the Indonesian government. The
nities such as construction. Likewise, other Indonesia Coral Reef Garden was launched in
working household members transition between Bali installing artificial structures around the
tourism, hospitality and other local opportunities island with 7.4 hectares of reef restoration spread
available. The average fisher household had across the Buleleng district, engaging thousands
three out of six family members employed before of locals in conservation while injecting tempo-
COVID-19. As the full impact of the pandemic rary income to mitigate the impacts of
set in the average number of family members COVID-19.
150 C. Rosado et al.
Globally tourism has slowed down because of developing a network of friends they can contact
COVID-19, and this translated to a severe drop in for day labor when fishing is not an option. The
arrivals in Bali. Based on projections in 2018 fisher groups also support members with favor-
Bali was expected to have 18.2 million tourists able terms for loans in times of need providing
visit the island in 2020 (Wood 2018), however cushion and further establishing camaraderie
the actual number of arrivals was 1.05 million within the community.
(Statista 2021). According to a National In terms of the environment, community
Geographic article published in 2019 the average members are familiar with the concept of con-
tourist produces 1.7 kg of trash compared to a servation and aware of the importance of fish-
local with 0.5 kg of trash per day—and only 50% eries management. There is a knowledge base
of that trash is managed properly (Siddharta of sustainable fishing practices, and a network
2019). The benefit from a reduction of tourist of fisher groups that encourage sustainable
numbers is the decrease of trash produced locally practices. This is evidenced by fishers and
since 2020, but further research is needed to locals in the community coming together dur-
understand the full impact that included increased ing COVID-19 to remove nets left by less
single use plastic and a reduced focus on coastal experienced and outside fishers, however local
management. interventions such as this have become less fre-
quent with social distancing measures in place.
The shift to closer inshore reef fisheries is
5 Conclusion likely to have had an impact, however long-
term impacts are currently unknown. Trash has
Resilience materialized from social networks, been a big problem in Bali for many years
diversified economic opportunities and strong especially evident on beaches and in the ocean.
cultural community level governance with villag- The reduction in tourists has reduced the
ers adjusting social, economic, and religious amount of trash produced on the island, but the
behaviors to mitigate spread of COVID-19. increased use of single use plastic and personal
Transformation of activities to adjust to the new protective equipment pose a threat to coastal
‘COVID-19 normal’ have been supported by reli- ecosystems in the future.
gious, government and informal networks creat-
ing a community culture built around following
health protocols. The ability to utilize social capi- 5.1 Implications on the United
tal and mobilize villagers in implementation of Nations Sustainable
health safety protocols provided a level of stabil- Development Goals (SDGs)
ity during difficult times. Mobilization of the
Pecalang Balinese traditional guards incorpo- It is of interest to understand how the SDGs
rated the islands cultural governance system, and might be impacted by the global pandemic from
with it the trust and support of the local commu- the perspective of small-scale fishers. Based on
nities. The Indonesian health insurance system community vulnerability analysis we found sev-
has been socialized to most of the community eral SDGs potentially impacted (Table 10.2),
and, with that, familiarity, and confidence in the including SDG1 (Efforts to eradicate poverty),
health system. SDG2 (Zero hunger food security and nutrition),
Economic Resilience has materialized at com- SDG3 (Good health and wellbeing), SDG8
munity level by leveraging previous experience (Decent work and economic growth) and SDG 14
with economic downturns, job diversification and (Life below water). The key impacts are through
a holistic local financial support system. The susceptibilities in health infrastructure, minimal
experience from previous economic shocks have control of supply chain and loosely regulated
made transitioning between livelihoods a familiar fishing that expose the challenges COVID -19
practice among the fishers, with many even brings to small scale fishers.
10 Resilience of Small-Scale Fisheries to COVID-19: A Case Study from North Bali, Indonesia 151
Health vulnerabilities surface around the fra- regularly since the COVID-19 lockdowns were
gility of the medical infrastructure, and extremely introduced in 2020.
low capacity to respond in case of a COVID-19
outbreak. The allocation of infrastructure and the
focus of medical practitioners on the pandemic 5.2 Policy Considerations
causes other services to be pushed aside, and
could set back Indonesia’s overall progress on All actions taken to manage the pandemic come
health (SDG3). In addition, the limited commu- with tradeoffs. Most government responses to
nication strategy using loudspeakers and signage balance impact of their policies erred on the side
can lead to misunderstandings that damage trust of caution with health protocols throttling leni-
between the government and citizens at a time ency to maintain economic activity. The most
when compliance is most needed. common responses to the pandemic, according to
Many economic weaknesses to COVID-19 the Oxford COVID-19 Government Response
stem from the supply chain and the reliance on Tracker (Hale et al. 2020), include school clos-
tourism (SDG8). Access to buyers is heavily ing, travel restrictions, bans on social gatherings,
influenced by middlemen, tourism, and interna- emergency investment in healthcare, new forms
tional exports that leave the fishers in a weak of social welfare provision, augment health sys-
position to collectively negotiate prices and man- tems and management of economic consequences
age fish stock (SDG2). The lack of budgeting of these actions. By the end of 2020 Indonesia
practices at a household level poses a risk to pro- appears to have followed suit with the common
longed economic slowdown as savings and credit government responses to address social and eco-
are used up (SDG1). The compounding effect of nomic challenges. According to the World Bank
low or no savings, with little bargaining power, Social Protection and Jobs Responses to
leaves fishers economically defenseless. COVID- 19 report (Gentilini et al. 2020),
Novice fishers pose a risk of introducing Indonesia has implemented elements of social
unsustainable and destructive fishing practices to assistance such as cash transfers, social insurance
the coastal environment (SDG14). The focus on and supporting labor market through training.
COVID-19 has taken attention away from stan- Some of the policies implemented included
dard coastal monitoring and conservation efforts, relaxing terms of loans for informal workers and
such as monthly beach cleans to remove plastic tax for all workers, eliminating tax completely
pressure on local reefs which have not happened for lower income earners (WIEGO 2020).
However, these high-level solutions may not
Table 10.2 United Nations Sustainable Development Goals (UN SDGs) associated with Resilience Indicators in this
study
always align with the local context. There is a The recently passed Job Creation Act in late
need to understand specific types of vulnerabili- 2020 has been met with calls for annulment.
ties and allow health officials to plan and allocate Fishers, environmentalist, and law experts
accordingly (Peters 2020). Small scale fishers are claim ‘that the new law also threatens the deg-
deeply entrenched in the community, providing radation of Indonesia’s coastal and marine
food security and stewardship of local marine ecosystems for the sake of infrastructure
resources. These fishers need to be engaged when development and tourism’, ‘giving concession
designing responses to not only match their vul- or permit to foreign fishing vessels in territo-
nerabilities but leverage resilience. rial waters is a very ill-advised policy’ and
The policy recommendations that emerge ‘with the passage of the Job Creation Act, we
from this study suggest the urgent need to are looking at ecological apocalypse’, among
strengthen fishing communities with targeted other strong criticisms (Gokkon 2020).
policies. We suggest action to strengthen fisher Additionally, waste management has taken
networks with the aims of: back seat to COVID-19 focused policy.
Strengthening the waste management systems
• Improving transparency and access to mar- should be included in the COVID-19 recovery
kets, especially domestic and direct sales. strategy as the increase in associated plastic
The small-scale fishers are removed from buy- waste will eventually find its way to the ocean.
ers by layers of middlemen which take per- Addressing this could also be the opportunity
centages from sales. While middlemen do add to create green jobs.
value in marketing, the lack of transparency in
supply chains reduces competition among
middlemen and the negotiation power of fish-
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Challenges of Targeting Poor
and Vulnerable Groups to Reduce 11
Climate Change Vulnerability:
The Case of a Water and Sanitation
Project in Kampong Svay District,
Cambodia
© The Author(s), under exclusive license to Springer Nature Switzerland AG 2022 155
A. Antoniades et al. (eds.), Financial Crises, Poverty and Environmental Sustainability: Challenges
in the Context of the SDGs and Covid-19 Recovery, Sustainable Development Goals Series,
https://doi.org/10.1007/978-3-030-87417-9_11
156 L. Pichdara et al.
tions, whereas medium-wealth families have level and 30% of the general population in the
higher adaptive capacity because of their diversi- province (Chin and Kim 2016).
fied incomes, better access to financial resources, The pilot resilient infrastructure included con-
and more capital availability. The authors argued structing 8 wells (Figs. 11.3 and 11.4) (drilled
that the rural poor need more support from vari- deep and considered a viable method for provid-
ous organizations, including the government, ing water consumption for all year round), four
NGOs, and the private sectors to enable them to latrines and rainwater collectors (constructed in
invest in long-term coping measures in areas higher location to avoid flood), and 12 home gar-
such as assets accumulation, livelihood diversifi- dens (a dripping system—designed for less care
cation, and the adoption of agriculture technolo- and less water consumption, aiming to be work-
gies that allow for an increase in productivity and able and produce vegetables and food during the
income. dry seasons).
Therefore, according to the literature review, The main criteria of the beneficiaries for
those vulnerable groups are hard to get benefits receiving the latrines, wells, and home gardens
from intervention programs due to a range of fac- were those who do not migrate to work outside
tors including inadequate irrigation system for the village; having enough labor capacity to
rice farming and other agricultural activities, low ensure the maintenance of equipment; being will-
skill labor and education, inaccessibility to water ing to plant or participate after direct support had
sources, food insecurity, lack of climate change ended, and being poor households.
education (lack of drought/flood preparedness), For home gardens, commitment and availabil-
limited network and information, limited ity of labor force were also considered in select-
resources and ownership of land (especially the ing beneficiaries. Through these home garden
landless poor), and little access to financial projects, the village families grew mixed vegeta-
resources. bles includingBok choy, Curly cabbage, and let-
tuce (Fig. 11.1).
For latrine site selection (Fig. 11.2), higher
3 Resilient Infrastructure locations less prone to flooding were prioritized.
and Beneficiary Selection The latrines were built at schools and traditional
Criteria ceremony areas that are accessibleto all villagers
(Figs. 11.3 and 11.4).
MRD had a climate change intervention program Poor families were also targeted as beneficia-
called ‘Climate Proofing Integrated Rural ries by using the Identification of Poor house-
Community Development in Kampong Svay dis- holds (ID Poor) and they could show those IDs to
trict, Kampong Thom province’ from 2015 to the village or commune chief, requesting to be
2019, a joint effort between MRD and Caritas selected as a beneficiary. Elder households with-
Cambodia, funded by the Cambodia Climate out children’s supports were also classified as
Change Alliance. The program was focusing on poor.
the improvement of access to clean water,
improved sanitation, and assisting resilient liveli-
hoods to climate change by providing climate- 4 Methodology
resilient infrastructure (construction of eight
wells, four latrines, and 12 pilot home gardens), The study employed a qualitative approach and
building the adaptive capacities of local commu- drew on secondary and primary data. Secondary
nities and authorities, and integrating climate data used the latest Cambodia’s commune data-
change issues into national and sub-national base and collected from a desk review of policy
planning. The project aimed to benefit 50 percent documents, research reports, national and inter-
of MRD officials at the national and subnational national studies, and journals on poverty allevia-
tion and climate change.
158 L. Pichdara et al.
Fig. 11.1 Home
garden, considered as
using less water and less
care
Primary data was collected in May 2019 from tive data from FGD and KII using thematic
13 key informant interviews (KIIs) with separate analysis. The participants for the KII and FGDs
men and women, children, disabled people, com- are as the following:
mune councilors, village chiefs, and provincial
rural development officials and 3 focus group
discussions (FGDs) with separated men and 5 Study Site
women groups (Table 11.1). Each FGD was com-
posed of about 6–10 men and women aged from Four villages (among the total 8 villages) in four
20 to 60 years old. KIIs and FGDs used semi- communes of Kampong Svay district (Fig. 11.5),
structured interviews. We analyzed the qualita- Kampong Thom province were selected for the
11 Challenges of Targeting Poor and Vulnerable Groups to Reduce Climate Change Vulnerability… 159
study as suggested by MRD’s staff in 2019 where lages were female and 67 percent of the total
the climate change programs were implemented. population were adults of age between 15 to
The areas had a serious drought and shortage of 60 years old. The average size of the family was
water. There were 938 households or about 4700 4 people per family (NIS 2020).1 Approximately,
people in the four villages (Table 11.2). Three of 76% were literate with 51% of the people having
the villages are located close to the Stung Saen finished primary school and 21 percent graduated
river that flows into the Tonle Sap Great Lake high school (NIS 2018).
(Fig. 11.5).
According to the commune database 2018,
about half of the total population in the four vil- Census 2019 report
1
160 L. Pichdara et al.
Table 11.1 Key informant interviews and focus group discussion conducted in Kampong Svay District, Kampong
Thom Province
No Target groups KIIs FGDs (# of people)
1 Women and female household heads 1 1 (11)
2 Men 1 1 (5)
3 Children (aged below 15) 1 0
4 ID poor households 2 0
5 Older people (aged above 60–70) 1 0
6 Disabled people 1 0
7 Beneficiaries in general 1 0
8 MRD project staff 2 0
9 Commune and village chiefs 3 1 (4)
Total 13 3 (20)
Fig. 11.5 Map of the studied villages (Authors made based on NIS 2010)
Rice farming is a common occupation in the around the house land. Raising animals such as
areas. About 80–90% of all the farmers in the vil- chicken, pig, and cow are also secondary income
lages depended on rains for their rice fields. Only and food supply. Furthermore, around 20
a small percentage, 10%, of the villagers who migrated workers migrated to Thailand for the
have rice fields with the irrigation system or near whole year in Damrey Slab village (interviewed
the drainage, could plant rice twice per year. village chief). Fishing is also a food source for
Vegetables such as garlic, water spinach, banana, the community.
papaya, jackfruit, and mango are usually planted
Table 11.2 Families accessing rural facilities by village (in percent) (authors’ calculations based on the General Population Census 2019 (National Institute of Statistics, 2020)
Energy for cooking Energy for lighting Toilet Water for domestic consumption
Village Electricity LPG and City Battery others Not use Improved Unimproved Piped into Wells Surface Bottled
name Firewood others power toilet toilet toilet dwelling water water
Bou 97.89 0.70 1.41 3.52 93.66 2.81 45.77 52.11 2.11 3.52 0.00 55.64 40.85
Pueng
Damrei 98.31 0.00 1.69 89.83 8.47 1.69 11.86 83.05 5.08 1.69 98.3 0.00 0.00
slab
Lvea 91.67 0.44 7.90 79.39 18.42 2.20 9.21 34.21 56.58 5.26 94.31 0.00 0.44
Choum
Peam 98.57 0.00 1.43 64.64 32.86 2.50 16.79 78.93 4.29 0.00 2.15 97.86 0.00
Kraeng
Average 96.61 0.29 3.11 59.35 38.35 2.30 20.91 62.08 17.02 2.62 48.69 38.38 10.32
Source: General population census 2019 (NIS, 2020)
11 Challenges of Targeting Poor and Vulnerable Groups to Reduce Climate Change Vulnerability…
161
162 L. Pichdara et al.
According to the census 2019, the common and agriculture (irrigation for cropping), dirt
energy use for cooking is firewood (96 percent), roads (slippery during the rainy season), lower
followed by LPG (3%) (Table 11.2). The lighting price of rice, infertile soil, and insects destroying
energy is electricity from the national grid (city crops/rice. The difficulties for children included
power) is 59%, followed by car battery (38 per- taking care of their younger siblings, having not
cent). Regarding clean water and sanitation, enough water, required them to collect water
about 21% of the total households did not have from the far wells, having not enough budget for
toilets and 38 percent used surface water such as education.
rivers or ponds for domestic consumption. The benefits they received from the climate
change intervention program of MRD included
more access to water. However, the water was
6 Results still limited in the dry season. The beneficiaries
improved their hygiene due to having a latrine
6.1 Profile of Different Vulnerable and had vegetables from the home garden. The
Groups home gardens also helped the beneficiaries to be
able to save money from buying vegetables from
Table 11.3 summarizes the information received the markets.
from different vulnerable groups about their cur- What they need from future programs are irri-
rent jobs, difficulties, current needs, benefits gation systems for their crops, seeds, more wells,
from MRD’s climate change intervention pro- more latrines, training skills on vegetables, deal-
gram, and what type of program they need in the ing with insects, raising animals, fertilizers, a
future if MRD has the budget to run a similar pro- health care center, child care/health-food sup-
gram on building community resilience to cli- port, and scholarships for education.
mate change.
The common jobs and earnings were mainly
from rice planting. Other secondary sources 6.2 actors that Hinder
F
included raising cows, serving as saving assets, the Project Beneficiaries
and raising poultries, planning vegetables, and
fishing for daily food consumption. The difficul- 6.2.1 Lack of Family Labor
ties during the studied period in May 2019 were The results showed that the pilot program of
lack of water in the dry season for daily con- offering home gardens to the poor and older
sumption (body washing, cooking, drinking, etc.) households had a low rate of success (30–40%)
Table 11.3 (continued)
Vulnerable Income and food Benefits from MRD’s Future needed
groups sources Difficulties Current needs program program
Elderly Farming (rice, Lack of water More wells, They get clean water Provision of more
vegetables, and during the dry irrigation system, from the wells to use wells (dig deeper)
fruits), fishing season, the fertilizers for the daily as well as for and irrigation
farmland is farmland, health cultivating the home system, providing
infertile care, and garden. They also get fertilizers to make
medicines fresh vegetables to eat the farmland
from the home garden fertile, increasing
and can defecate health care
hygienically at the centers, and
latrine given. providing
medicines
Children Depended on Having to Support with Their health is Childcare support
parents take care of childcare, clean improved since they (for their younger
younger water supply, have a clean latrine to siblings),
siblings, lack financial support go to and get fresh provision of more
of clean water for their education vegetables to eat from wells, monthly
in the dry the home garden. They financial support,
season, not also have more water or scholarship
having to use since they have a programs
enough water collection tank.
money to go
to school
Disabled Farming (rice Drought Coping They get fresh Training on how
people and some fruits damages rice mechanisms for vegetables to eat from to cope with
such as pomelo, and crops, drought, irrigation the home garden, have drought, provision
banana, jack lack of water system, fertilizers a hygienic latrine to go of water pumps,
fruit, and for farming, to and get more water more wells, and
mango), fishing, farmland is to use from the wells irrigation system,
and raising not fertile and water collection providing crop
animals tanks. seeds and
(chickens, pigs, fertilizers to make
cows) the land fertile
Poor Farming rice, Lack of water Irrigation system, The vegetables from Support with
household planting during the dry more wells, the home garden help irrigation system,
vegetables, season, pesticides to kill save them some money building more
fishing insects insects, skills in from the food budget. wells, training on
problem, taking care of The water from the how to cultivate
losing fishing crops water collection tank is crops more
nets when also helpful as they effectively and
there’s a don’t have to buy water how to deal with
strong wind, from outside. They also insects
crops damage benefit from the latrine
when there’s as now they do not
too much rain have to defecate at
random places and it’s
much more hygienic to
have a latrine
Source: based on group discussion and key informant interviews (2019)
164 L. Pichdara et al.
Table 11.4 Perceived changes in climate in the rainy and dry seasons in 2019
Months Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Before (the
1990s)
Rice season Rainy season rice
Season period 6-month dry season 6-month rainy season dry season
Windy and The Windy and
Temperature and dry hottest Normal temperature average 32.30 dry
hotter
wind (average 28 (33-38 Cc (average 28
Ca) Cb) Ca)
High frequency of rains within
Frequency of rain Normal rains (heavy) within the period Rain
the period
After (2019)
Dry season
Dry season rice Rainy season rice
Rice season rice
Season period 7-month dry season 5-month rainy season Dry season
Windy and Windy and
Temperature and dry The hottest Normal temperature, average dry
hotter
wind (average 28 (33-42 C)b 32.50 Cc (average 28
Ca) Ca)
A low frequency of rains, but with More dry and less rain with
Less
Frequency of rain great intensity and lightning strikes, greater intensity with lightning
rain
then (?) the longer period strikes within the period
a
Heng
b
NIS (2008)
c
Based on data from FGD, KII interviews in 2019)
The local perception of climate change is still adapt to the floods and droughts, affecting their
unclear. What they can observe is that the seasons rice fields. The farmers just waited to see how
have changed. One KII villager said that “if the much of their crop was left after the drought or
sky wants to rain, it rains and it does not care flood. There were reports of lower yields affected
whether it is a rainy or dry season”. by floods and droughts.
Below are some of the villagers’ observers of ‘In the rainy season, there were no rains, but
the changing season of rainy and dry: hot and dry in June and July 2019. Those dried
“The seasons have changed. The rainy was periods in the rainy season killed 840 ha of rice
delayed, shortened, with greater intensity, more fields (completely destroyed rice fields) in the
lightning strikes, and the dry season was longer whole commune…[and led to] fewer yields
than before” (a villager in Damrey Slab village). because the rice did not produce appropriate
This has led to lower rice yields (a drop from 5 tons
per ha to 3.5 tons) and the destruction of planted seeds. The average yield was 3.5 tons of rice per
rice crops due to lack of water. ha. The previous year, we could get 4 to 5 ton per
“It used to rain continuously in the rainy season,
ha. Therefore, the damage from the irregularity
but now it rains one time and is delayed for a while could cause loss of rice yield from 0.5 to 1.5
until the next rain” (Poor villager in Damrey Slab tonne per ha.’
Village).
6.2.3 L ivelihood Strategy for Poor
The village chief said ‘MRD project develop- Households (Different
ment helps to improve hygiene. However, the Priorities)
wells could only help some parts of water short- The beneficiaries of the poor households usually
age issues. Because the MRD project provided prioritized their work in earning labor wage work
only 8 wells. The other 13 wells were constructed by migrating to work in other locations, resulting
by the villagers. To solve this issue, people buy in leaving the home gardens unused.
additional water tanks which contain 5000 L Selecting criteria to get home garden were (1)
worth of 13,000 riels/tank. Nearly 100 percent of no-migration worker (stay permanent in the vil-
villagers are using wells.’ lage) (2) hard-working, (3) poor, etc. But after
‘Digging and restoring more pond is more those poor households received the home gar-
helpful for the extreme heat in the areas’, said dens, they still migrated for labor wage work,
MRD’s staff. Ponds can store a larger amount of abandoning the home gardens. This contrasted
water for the commune consumption during dry with the initial criteria in selecting beneficiaries
seasons. (no migration households). The poor households
According to the observations and discussions lost commitment and they prioritized labor wage
with the farmers who were the beneficiaries in work in rice farming, instead. As a result, they
those isolated villages, the local farmers were still did not work with home gardens. In contrast,
practicing their traditional farming depending medium and better-off households have more
entirely on the weather even if there are perceived labor, more diversified income sources, which
changes in climate in 2019. They planted rice in lead to more successful in-home gardens com-
the wet season that starts in May and harvest the pared to poor households.
rice in September and the average productivity According to the MRD’s official:
was 1.5–2 tones/ha. But since 2013, for those who There are several reasons why the villagers failed
had rice fields near to drainage structure, big canal in this home garden: (1) they consider the home
and small canals, they could plant twice per year: garden as a second or third income source (not the
the first is from May until August and the second primary one), i.e. they can have other options for
much higher income such as labor wage work or
is from August until September (FGDs with going to work in a garment factory in the city or go
female groups in Damrei Slap village). to the forests. It is not necessary to take care of the
Sometimes, droughts and floods happened, home garden because if they do not do it, they can
and they could not do anything to prevent or still survive.
166 L. Pichdara et al.
After providing for 1 year, only those bene- 6.2.4 Technical Support
ficiaries whose primary job was vegetable from the Government
growers were still growing vegetables in the Most of the poor households have low education
provided gardens. The MRD technical staff and no skills and they need help financially, and
mentioned ‘this is a great lesson learned when the poorest need the most and continuous support.
selecting the beneficiaries, that we need to Some villagers who can fix broken wells or gar-
think about the beneficiaries’ primary jobs and dens need access to funds to buy spare parts. Even
make sure that we give the home garden to the though there was a village committee established
vegetable growers if we wanted to see success to take care of and fix problems with the new
after the project end’ (MRD’s project infrastructure, the maintenance is still limited.
implementer). According to FGD with Children in Bopeung
There are also other major problems too. Village:
According to the district governor in Kampong ‘Well: it’s far from home, and some villagers use it,
Svay: ‘the biggest priority for the community in but they are not willing to do the maintenance. The
this district is rehabilitating road 30 Kanha along difficulties with the project included the broken well,
the canal’ because it is the main road for trans- there is no spare parts and no one can fix it’, said the
commune chief in Sangkor Commune. Maintaining
porting the rice to the market (Fig. 11.6). the well, latrines, water collectors, and home gardens
Villagers asked also for support on best prac- are the main challenges and those maintaining activi-
tices in cropping and animal raising, as well as ties need cooperation from both the beneficiaries,
the construction of canals to irrigate the rice other public users, and local authorities.
fields for dry season rice farming. The common For home gardens: the high material costs of
needs/difficulties of the groups included water, installing the home gardens are a challenge for the
community. However, the MRD staff suggested
work (employment), rice, dealing with the impact that the villagers can use their local resources such
of climate change (especially the drought), and as poles rather than the expensive equipment and
school. materials.
ing the dry season each year” (KII, female like a drip system. Plus, they are expensive,”
respondent). A number of actions could help (KII in Moha village). Actions to increase the
addressing this challenge, including: positive impact of the home gardens include:
–– Increase water sources for the villagers –– Better targeting of the beneficiaries (e.g.
such as digging more commune ponds for target vegetable growers) and better analy-
storing water in the dry season and provide sis of how households primary jobs may
more water storage tanks to more impact on their capacity to maintain home
households. gardens.
–– Study the quality of the groundwater –– Increase awareness among the beneficia-
sources carefully before digging the wells, ries on the project’s ownership, and pro-
and seek support from technical staff to vide relevant agricultural training to the
help solve related problems such as smell beneficiaries at an early stage. Follow-up
in the water. programs should assess and focus on gaps
–– Set up teams to monitor the quality of the in the existing training/knowledge amongst
water regularly (every 3–6 months), and beneficiaries, as well as on how synergies
offer continuing support with fixing/main- between the jobs of the beneficiaries and
taining the wells. the projects’ outputs can be maximised.
–– Finally, improve access to water for dis- –– Provide a variety of seeds and more agri-
abled people (e.g. in the design of the cultural inputs to increase production and
latrines). income.
• Water shortage in the dry season is also a prob- –– Ensure frequent monitoring and continu-
lem for rice cultivation. There was a serious ous support from the ministry (e.g. new
water shortage during the dry season. So, tools, fix broken garden parts).
farmers had to buy water for their rice field –– Assist the beneficiaries with finding mar-
(1 ha cost 80$ in 2019, and 90$ in 2020), while kets that buy crops from home gardens at a
the price of other agricultural inputs (fertilizer, good price. The respective plan as stated in
labor, pesticide) was also increasing, in a con- MRD Policy 5: ‘Diversify Rural Economy
text where agricultural markets have not been and SMEs’ should be accelerated and given
stable. Needed actions in this regard include priority.
more commune ponds to store water in the dry –– Establishing agricultural associations, e.g.
seasons, and planting more trees to increase chicken raising group, cow raising group,
forests and groundwater storage. Forming an vegetable growing group to help one
agricultural association to help each other in another in terms of sharing experiences and
the communities, and collectively get technical having bargaining power.
and financial support from the private sector, • The integration of climate change issues into
government, and NGOs in terms of agricul- the commune council annual planning activi-
tural inputs and markets, would also help ties with budget allocation should be
addressing these challenges. expanded. The climate is getting drier, and
• Home gardens were abandoned because the there was less rain with greater intensity and
beneficiaries (mostly poor households or lightning strikes in 2019 and 2020. This affects
elders) had to perform other work to generate disproportionally women-headed and poor
income, as the home garden alone did not pro- households that should be supported. It is also
vide enough income for poor households. important to increase awareness on the impact
Also, the villagers could not afford to repair of climate change on rice production and live-
the garden by themselves: “Home garden lihood among local leaders and policymakers.
tools are hard to replace when they are broken, There is also a need for specific infrastructure
11 Challenges of Targeting Poor and Vulnerable Groups to Reduce Climate Change Vulnerability… 169
such as lightning prevention equipment to pre- NIS (2018) Commune Database 2018. National Institute
of Statistics, Phnom Penh, Cambodia
vent more death of animals and humans. National Institute of Statistics (NIS). (2020). General
• Finally, there is a need to build capacity so as population census of the Kingdom of Cambodia 2019;
the beneficiaries of these programs to be able accessed on November 4th 2021, availbale from: https://
to maintain wells, home gardens, and latrines www.nis.gov.kh/nis/Census2019/Final%20General%20
Population%20Census%202019-English.pdf
independently, not solely relied on MRD’s Porras I. (2010) Fair and green?: social impacts of pay-
technical support. ments for environmental services in Costa Rica (No.
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viewdoc/download?doi=10.1.1.382.6434&rep=rep1&
type=pdf. Accessed 8 April 2021
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National Institute of Statistics, Phnom Penh. Cambodia worlddev.2004.07.012
Why Recent Crises and SDG
Implementation Demand a New 12
Eco-Social Contract
Isabell Kempf and Katja Hujo
© The Author(s), under exclusive license to Springer Nature Switzerland AG 2022 171
A. Antoniades et al. (eds.), Financial Crises, Poverty and Environmental Sustainability: Challenges
in the Context of the SDGs and Covid-19 Recovery, Sustainable Development Goals Series,
https://doi.org/10.1007/978-3-030-87417-9_12
172 I. Kempf and K. Hujo
climate change and environmental destruction; tive, and takes stock of the variety of real-world
insecurity and conflict; migration; precarious social contracts in the global North and South,
work; as well as accelerating demographic and analysing the factors that led to the unravelling of
technological change (UNRISD 2016a). Five these contracts during the period of neoliberal
years into the Agenda, the obstacles for achieving reforms and hyper-globalisation. Section 5 pres-
its transformative vision are bleaker than ever. ents positive examples of policies and institutions
The world is struggling with a global health pan- which reflect the idea of a renewed eco-social
demic which has thrown the global system into contract and could serve as a benchmark for
its worst crisis in almost one century, undermin- future strategies. Here we outline seven key con-
ing past progress and threatening to affect econo- tours of a new eco-social contract, and present
mies and societies for years to come. Even before some initial ideas on the process of creating such
the crisis, many Sustainable Development Goals a contract.1
(SDGs) were not on track and inequalities were
increasing (UN 2020; Hujo and Carter 2019).
Against this backdrop of urgent challenges 2 Stalled Progress: The Impact
and crises, many voices are demanding a new of Recent Crises on Poverty,
twenty-first century social contract which encom- Inequality and Climate
passes a shared vision and stipulates rights and Change
obligations, as well as accountability mecha-
nisms. This new social contract needs to be fully There are a number of reasons why multiple cri-
inclusive while also promoting climate justice ses and SDG implementation demand a new eco-
and halting environmental destruction, what social contract. The first one is that recent
UNRISD calls an eco-social contract (UNRISD crises—and in particular the ongoing global
2016a, 2021). health pandemic of COVID-19 which is still
This chapter sets out to analyse how multiple wreaking devastating socioeconomic impacts
crises and an unsustainable global economic across countries—threaten to reverse previous
model have undermined progress towards the progress on poverty, equality and SDG imple-
SDGs, and what needs to be done to put this mentation. According to the World Bank (2020),
global compact for sustainable development back for the first time since the 1990s, absolute pov-
on track. It discusses the concept of a new eco- erty rates are on the rise. Projected poverty rates
social contract as a potential pathway to create in 2020 are similar to those in 2017; hence, the
the necessary alliances for transformative change, impacts of COVID-19 are expected to set back
and to commit various stakeholders—from the progress towards ending extreme poverty by at
local to global levels—to urgent joint action. The least three years. World Bank estimates suggest
key message is that successful implementation of that South Asia will be the region hardest hit,
the SDGs requires a raft of changes to policies with at least 49 million additional people, fol-
and institutions so that they are democratic, lowed by sub-Saharan Africa (SSA) with between
inclusive and promote gender and environmental 26 million and 40 million more people in extreme
justice, coupled with alternative economies and poverty. In a similar manner, SDG 2 is under
transformative social policies. threat. The number of persons suffering from
The chapter is divided into five sections: the hunger and food insecurity is on the rise, and this
second section analyses how recent crises, and in began even before the outbreak of the pandemic.
particular COVID-19, have impacted poverty, Almost 690 million people were undernourished
inequality and the environment. The third section in 2019, up by nearly 60 million from 2014.
discusses the demands of various actors for a new About 2 billion people were affected by moderate
social contract, comparing differences and simi-
larities. Section 4 approaches the social contract The authors are grateful for excellent background
1
debate from a conceptual and historical perspec- research and support provided by Paramita Dutta.
12 Why Recent Crises and SDG Implementation Demand a New Eco-Social Contract 173
or severe food insecurity in 2019, and the esti- According to the Emission Gap Report (UNEP
mated figure for chronic hunger in 2020 rose by 2020) the world is still heading for a steep tem-
more than 130 million people as a result of perature rise in excess of 3 °C this century—far
COVID-19 (FAO et al. 2020). beyond the Paris Agreement goals of limiting
Inequality continues to increase within and global warming to well below 2 °C and pursuing
among countries as a result of recent crises, 1.5 °C. This has led to calls for a green recovery
undermining achievement of SDG 10. Young from the COVID-19 pandemic, which could help
workers are twice as likely to live in extreme pov- put the world on track towards 2 °C, and growing
erty than adult workers. Rural areas are home to commitments to net-zero emissions by 2050. The
85% of people without access to electricity, pace of climate change also seems to be acceler-
according to UN DESA (2020). In The Inequality ating. The year 2019 was the second warmest on
Virus, Berkhout et al. (2021) document how the record and the end of the warmest decade on
COVID crisis brings different forms of inequality record, bringing with it destructive wildfires, hur-
to the surface, including income and gender ricanes, droughts, and other climate-related
inequality as well as discrimination based on disasters. These, in turn, have an impact on pov-
race. According to Oxfam “it took just nine erty and hunger (UN DESA 2020).
months for the top 1000 billionaires’ fortunes to Consumption and production patterns that are
return to their pre-pandemic highs in 2020 but for not sustainable result in depletion of natural
the world’s poorest people recovery could take resources, pollution and environmental deteriora-
14 times longer, more than a decade“(Berkhout tion (UN DESA 2020). Deforestation and biodi-
et al. 2021, p. 8). Women—and, in the United versity threats caused by unsustainable supply
States of America (USA), especially women of chain production increase the likelihood of future
colour—are more likely to lose their jobs during epidemics (SDSN and IEEP 2020). According to
the COVID-19 crisis, stalling or even abandoning the Dasgupta Review (Dasgupta 2021: p. 114 and
their careers and financial security. Ethnic minor- 123), we have failed to manage our global portfo-
ities have also been disproportionately affected. lio of assets sustainably. Estimates show that
In the United Kingdom, 22% of people from between 1992 and 2014, produced capital per
Black, Asian, and minority ethnic backgrounds person doubled, and human capital per person
(BAME) lost their jobs, well above the average of increased by about 13% globally; but the stock of
9% (McKinsey Global Institute 2020a). natural capital per person declined by nearly
Employment impacts of the current pandemic are 40%. While humanity has prospered, it has come
also more pronounced than they were during the at a devastating cost to Nature. The report stipu-
financial crisis of 2008–9. According to the ILO lates that estimates of our total impact on Nature
(2021), 114 million jobs were lost in 2020, which, suggest that we would require 1.6 Earths to main-
in combination with working-hour reductions tain the world’s current living standards.
within employment, resulted in working-hour
losses approximately four times higher than in
2008–9. 3 laims for a New Social
C
The failure of our global socioeconomic Contract: Actors
model to produce sustainable development, and Contestations
which some see even as an inherent tendency
(Fraser 2021), has resulted in an urgent climate Considering the linked social and ecological cri-
crisis, which the 2030 Agenda and the Paris ses faced worldwide, a number of organisations
Agreement aim to tackle. Economic incentives at and movements are calling for the creation of a
all levels—global, country, firm and individual— new social contract between people, between
have become more focused on extracting maxi- citizens and governments, and between people
mum value from economic processes rather than and nature. The United Nations Research Institute
investing in strengthening systems for the future. for Social Development (UNRISD) introduced
174 I. Kempf and K. Hujo
the concept of a new eco-social contract in 2016 gest five steps towards a new social contract (1)
(UNRISD 2016a) and is currently catalysing creation of climate-friendly jobs with a just tran-
debates and activities related to it (UNRISD sition to achieve net-zero carbon emissions; (2)
2021). Disparate, but connected voices such as rights for all workers, regardless of their employ-
the Black Lives Matter and the Extinction ment arrangements; (3) universal social protec-
Rebellion movements, the UN Secretary General, tion, with the establishment of a Social Protection
the International Trade Union Congress (ITUC Fund for the least wealthy countries; (4) equality
2020) and the World Economic Forum (WEF) are and ending all discrimination such as by race or
each in their own way championing a new eco- gender; and (5) inclusion, to combat the growing
logical and social contract. Below we review the power of monopolies and oligarchs, ensure that
claims raised by some of these voices. developing countries can actually develop their
On Mandela day, 18 July 2020, the UN economies, and build tax systems that provide the
Secretary General stated that “the response to the income governments need to meet the needs of
pandemic, and to the widespread discontent that people and the planet (ITUC 2021).
preceded it, must be based on a New Social Business itself is preparing for its role in a
Contract and a New Global Deal that create equal new social contract. The McKinsey Global
opportunities for all and respect the rights and Institute proposes a systemic role for the private
freedoms of all” (United Nations News 2020b). sector in targeting vulnerable groups through the
He called on governments to implement affirma- provision of affordable goods and services such
tive action programs and policies to resolve his- as housing and child care, which they describe as
toric inequalities in gender, race or ethnicity, and “more cost-effective for the social contract than
to break the vicious cycle of corruption. He fur- aiming to stabilise incomes” ( 2020b: p. 12). This
ther said that a new social contract, between gov- would also include digital identification, pay-
ernments, people, civil society, business and ment channels and data for better targeting ben-
more, must integrate employment, sustainable efits to the neediest. Businesses have expressed a
development and social protection, based on number of demands regarding their role in a
equal rights and opportunities for all. The UN twenty-first century social contract, summarised
Secretary General’s proposal includes social by BSR (2020) as stakeholder capitalism; skills
safety nets, universal health coverage and the development and career pathways; economic
possibility of a universal basic income. To com- security and mobility; a just transition to net zero
bat climate change, he urges a greening of the emissions; and worker data protection.
economy to both protect the planet and create Social movements such as Fridays For Future
new jobs. He also calls for a renewed networked (2021), Black Lives Matter (2021) and Extinction
multilateralism including governments, trade Rebellion (2021) demand urgent climate and
unions, social movements, business and civil environmental action, intergenerational justice,
society. and gender and racial equality, as well as direct
Trade unions are also calling for a new social participation in decision making, for example
contract, as reflected in the International Trade through citizen assemblies. They are calling for a
Union Congress (ITUC) demands during the new eco-social contract that is inclusive and par-
World Economic Forum on 26 January 2021: ticipatory and brings in all actors under legally
“The choices made by world leaders and by busi- binding commitments in favor of social justice
ness in 2021 will either heed the call of workers and the environment. The Treaty Alliance (2021),
and civil society to reform the economic model a network of advocacy groups, wants to hold
and help create a just and sustainable future, or business accountable through laws on supply
maintain business as usual and see a model of chains and calls for a binding treaty on business
corporate greed entrench inequality, exclusion and human rights which would make social and
and despair perpetuating instability for our com- environmental standards legally enforceable.
munities and our planet” (ITUC 2021). They sug-
12 Why Recent Crises and SDG Implementation Demand a New Eco-Social Contract 175
Figure 12.1 shows similarities and differences tion and health in this transition. The UN and
between the different claims and proposals put social movements are both asking for urgent cli-
forward: the circle in the middle shows those mate action, promotion of equality and social jus-
demands that are similar, while the outside boxes tice, while also demanding an end to racial and
list those that are more specific to the different other group-based discrimination. While the UN
actors. sees this happening through networked multilat-
When comparing the demands of trade unions eralism, many movements question the capacity
to those of business (ITUC 2021; McKinsey of nation states and governments, and want more
Global Institute 2020b; BSR 2020), the concepts direct citizen participation in decision making
of non-discrimination and the need to address cli- and enabling (policy) environments for alterna-
mate change are common concerns, but business tive economic models.
puts emphasis on targeted social policies and What emerges from the different stakeholder
safety nets, while trade unions argue in favor of views on a new social contract is a broad consen-
universal social protection for all and in all coun- sus on the urgency to act, along with significant
tries. Both workers and business are asking for differences of perspective regarding the sub-
just transitions to achieve net-zero emissions stance and scope of necessary reforms, as well as
without compromising social justice. While busi- the distribution of costs and benefits associated
ness actors submit that this will be achieved with change processes. Now as in the past, the
through creation of high-quality jobs in the green social contract idea is a contested one. Moreover,
sector and new skills development, trade unions it is not necessarily a progressive one (Hickey
demand concrete policies for job creation, educa- 2011). A social contract will reflect ideational
struggles and the outcomes of bargaining pro- compliance and state revenues (Moore 2008;
cesses between actors with unequal power Hujo and Bangura 2020). Increasing decommod-
resources and influence. And while the idea of a ification of labour led to a substitution or supple-
social contract is associated with the notion of mentation of money wages with social wages,
consent, it can be necessary to opt for contesta- social security and other benefits, which made
tion instead of agreement, a pathway chosen by workers less dependent on the vagaries of mar-
several of the social movements discussed in this kets while protecting them in times of social con-
section. In this sense, it is important to distin- tingencies such as maternity, sickness, disability
guish between the process of negotiating a social or old age (Polanyi 1944; Esping-Andersen
contract vis-à-vis its outcomes, as well as 1990). Post-war social contracts at the national
between ideal types of social contracts and real- level were underpinned by a global normative
world examples, ideas which we elaborate in framework and a commitment to international
more detail in the next section. cooperation, as a growing number of states
agreed to respect human rights, abide to the UN
Charter and foster cooperation for development
4 Looking Back to Build and peace.
Forward Better: Recognising Beyond the social contracts associated with
the Diversity of Social Western welfare capitalism, which are still fre-
Contracts, Challenges quently seen as the benchmark for democratic
and Lessons Learned state-society relations, different types of social
contracts can be identified across the non-Western
When different actors demand a new social con- world. Several of them are associated with com-
tract, as discussed in the previous section, what munitarian or philosophical thinking related to
are they referring to? A social contract is usually religious or indigenous communities (Mårtensson
understood as a mutually beneficial agreement 2014). For example, ancient Islamic philosophy
between free individuals, which ensures legiti- emerging in medieval Maghreb developed the
macy for rulers and protection against oppression idea of a social contract as a just state and mem-
of the ruled (which could be interpreted as an bership of a community of believers, although
equivalent to the modern notion of rule of law), reality related to the first, implying good gover-
and reflects a concern for the common good and nance and fair taxation, typically fell behind ide-
a just society. In the pragmatic words of the als (Bennison 2014).
World Bank (2019, p. 124), it is “a policy pack- In sub-Saharan Africa, communitarian
age that aims to contribute to a fairer society”. approaches dedicated to the common good for
Concerns for social justice and equality were all, such as Ubuntu—"I am because we are”—
key features in twentieth century social contracts, illustrate how political philosophy in the global
which were commonly understood as more South differs from understandings of social con-
equalised relations between capital and labour. tracts associated with Western philosophers such
This was achieved through substantial expansion as Rousseau, Locke or Hobbes (Chemhuru 2017).
of social policies in industrialised welfare states Communitarian philosophy implies that individ-
during the so-called golden age of capitalism. uals define themselves through their relationship
Bargaining processes between employers, work- with the community. Humans are embedded in
ers and governments set out to combine social relationships and interdependencies, with
productivity-led growth with enhanced well- common interests, goals and values. Association
being of workers and their families. The expan- and participation become key features of social
sion of social security coverage and access to life (ibid). This approach is also reflected in the
public services led to greater equality, opportuni- concept of Buen Vivir, the Living Well paradigm,
ties and trust of citizens in their governments which is recognised as the normative foundation
(Kidd et al. 2020), with positive impacts on tax for national development strategies in the consti-
12 Why Recent Crises and SDG Implementation Demand a New Eco-Social Contract 177
tutions of Bolivia and Ecuador. Buen Vivir is a typical for urban wage workers in manufacturing
holistic and culturally inspired vision which pro- or services (the latter shaping social contracts in
motes harmonious relationships between humans continental welfare states such as Germany).
and nature, and a balance between material needs They also included a range of other measures
and immaterial needs such as recognition and such as producer subsidies, price controls or rural
affection (Paz Arauco 2020). development policies. Examples of these agrar-
Next to such communitarian visions which ian social pacts can be found in the Nordic coun-
have shaped social contracts in the global South, tries, but also in India, Poland or Senegal
different types of social contracts between rulers (Sheingate 2008; Palme and Kangas 2005). As is
and the ruled were forged in the colonial and the case with other types of social contracts,
post-colonial periods in Africa (Nugent 2010), agrarian pacts did not necessarily lead to egalitar-
though arguably not all of them lived up to com- ian outcomes: large commercial farmers would
munitarian values such as Ubuntu. Social con- usually dominate negotiations. As a result, sup-
tracts established by newly independent port policies often benefitted larger farmers and
governments were concerned with nation- capital-intensive producers to the detriment of
building and state legitimacy. These social con- smallholders and subsistence farmers (Sheingate
tracts took different shapes, with the more 2008).
developmental ones deriving their legitimacy A social contract of sorts also evolved in some
through state-led economic development and resource-rich countries with mineral rents owned
public provision of basic services such as health and distributed by the state. Often associated
and education (Nugent 2010). They also included with a political regime type labelled resource
negotiations over tax payments, with the type of nationalism, this contract reflects a close relation-
tax-welfare regime influenced by colonial heri- ship between natural resources, economic devel-
tage (Mkandawire 2009, Mkandawire 2020): for opment and national identity (Koch and Perreault
example, former labour reserve economies in 2019).2 While some progressive natural resource-
Southern Africa displayed higher taxation and based contracts could be forged (see Sect. 5),
higher social expenditures, compared to cash resource bargains in mineral-rich countries are
crop economies such as Ghana or Uganda. In the frequently characterised by elite capture and dis-
latter countries, peasants maintained their land, tributional conflicts (Hujo 2012, 2020). Lopsided
revenues were mainly derived from trade taxes elite bargains, rent-seeking, corruption and illicit
and public social protection was limited, with state capture of mineral rents upended the devel-
predominantly informal and community-based opmental post-independence social contract in
systems. Zimbabwe, for example (Saunders 2020).
Different manifestations of social pacts can be Mounting discontent with political leadership
found in countries with important agricultural and elite settlements, as well as stifled political
sectors. In agrarian-led development models, voice and economic and social opportunities, in
social contracts face the challenges of unequal particular for young persons, were the focus of
land distribution and exposure of smallholders or civil society contestation during the Arab Spring
landless workers to various types of risks. (Bayat 2017). Arguably, oil-rich countries, except
Agrarian social pacts linked producer organisa- for Libya, were less affected by the upheavals
tions, politicians and bureaucrats for policy for- compared to countries such as Egypt or Tunisia
mulation and coordination, or incorporated (Ross 2011), but radical regime shifts in mineral-
farmers into rural-based political parties. These
pacts were sometimes associated with a specific
design of social policy, universal and tax-financed The authors define resource nationalism as “… a geopo-
2
rich Latin American countries such as Bolivia, tively resulted in choiceless democracies
Ecuador or Venezuela show that oil-backed lead- (Mkandawire 2006; Nugent 2010). State-citizen
ership is not set in stone. relations and political legitimacy worsened as a
Looking at the variety of social contracts result of shrinking fiscal resources, deteriorating
across countries of the global North and South, public services and the social costs of structural
the question arises of which factors led to their adjustment. Donor bargains bypassed citizens
crisis or demise. First, far from living up to their and shifted government accountability related to
ideals, real-world social contracts were shaped development outcomes from national electorates
by power asymmetries, entrenched inequalities to external actors, while policy space shrunk as a
and financial constraints. They created insiders consequence of loan conditionality (Hujo and
and outsiders, for example between formal and Bangura 2020; Nugent 2010).
informal workers, often due to the greater bar- Since then, few social contracts have survived
gaining power of organised workers, with less the assault on state-led social development mod-
powerful unions and non-organised workers els across the world, with the global climate cri-
excluded (Mesa-Lago 1978). These social con- sis, multiple economic and financial crises, and
tracts also reinforced gender inequalities— the global health pandemic COVID-19, exacer-
between men as main income earners and women bating the challenges the SDGs set out to address.
as dependents. They usually did not include The discussion of social contracts so far has
groups such as migrants, refugees, or persons been silent on contracts between people and
unable to participate in formal paid work, on nature, an issue that extends beyond national bor-
equal terms, creating stratified and fragmented ders and present generations (O'Brien et al.
systems (Standing 2009). 2009). One could argue that the SDGs (and the
Second, while determinants are context- Paris agreement) as a follow-up to the Rio
specific and related to historical legacies and Declaration and other milestones in global envi-
shifting political and economic constellations, a ronmental governance are an agenda to fix our
common factor undermining social contracts was broken contract with nature, committing key
the ideological turn in the global political econ- stakeholders such as governments and business
omy that started in the late 1970s. The twentieth actors to protect natural resources and biodiver-
century social contracts began unravelling during sity, and to address climate change and pollution.
the period of neoliberal policies and accelerated This is all the more important as increasing
globalisation. They were increasingly replaced impediments to access natural resources such as
by new types of contracts that emphasised indi- land, clean air and water, fishing grounds or for-
viduals’ responsibilities for their own well-being ests due to land grabs, commercialisation or deg-
and social protection, sidelining communal val- radation, has alienated large parts of the global
ues, redistribution and public provision. While population from existing social contracts, under-
state retrenchment was less pronounced in the mining citizens’ trust in the contract and delegiti-
global North, the new ideology slowly permeated mising governments (Willis 2020; O'Brien et al.
established welfare states through commerciali- 2009). It also impeded traditional custodians of
sation of social policy, promotion of social invest- the commons such as indigenous peoples to sus-
ment states, employment activation policies and tain their livelihoods and protect the natural envi-
cuts in public social benefits (Cantillon and Van ronment. A paradigm shift is warranted: The
Lancker 2013; UNRISD 2016a). Social contracts rights of nature concept challenges twentieth
in the global South were even more quickly hol- century social contracts as based on the idea of
lowed out as a result of debt crises and austerity nature as “resource”, to be owned, used (and even
(Nugent 2010). Post-colonial African social degraded). Instead, the idea of planetary bound-
contracts, in particular the developmental- aries and doughnut economics (Raworth 2017)
productive types, were especially hard hit, failing show how societies, economies and nature are
on their developmental promise, which effec-
12 Why Recent Crises and SDG Implementation Demand a New Eco-Social Contract 179
interconnected and necessary for sustainable stituencies without paying sufficient attention to
development and the survival of humankind. the transnational dynamics and mobility which
In addition to the shifts in the global political are key features of our globalised system (Hujo
economy discussed above, two other global 2019).
trends have a bearing on the viability of existing Identifying lessons learned from these varied
social contracts: demographic change and tech- experiences and contemporary challenges, it
nological progress (UNDP and UNRISD 2017). becomes clear that the social contract is not a
Digitalisation, automation and artificial intelli- Western concept. Indeed, it can and has been
gence have created new global divides that used in various contexts in the global South and
exclude a large proportion of unskilled and infor- can represent powerful communitarian values.
mal workers from social progress and threaten to Everywhere, social contracts are shaped by his-
push countries and their populations in the global torical and contextual factors and change over
South further behind. While these processes bear time, in response to changing political settle-
both opportunities and risks, what is important ments or socioeconomic conditions, as the dis-
here is how digitalisation and its impact on the cussion of the impact of neoliberal globalisation,
world of work has led to calls for a new social demographic and technological change and mul-
contract that is “fit for purpose”, suggesting “a tiple economic, environmental and health crises
gradual shift towards the individual, portable and has shown. Finally, social contracts are more or
transferable build-up of social accounts” (Adecco less binding and explicit, often exclusionary, and
Group 2017: p.2; Meagher forthcoming). With a they run the risk of representing dominant pow-
focus on individualised and portable social pro- ers in society rather than the common good.
tection systems and calls on the state to assume
greater responsibility for basic income protec-
tion, more equal capital-labour relations and the 5 he Way Forward: Pathways
T
promise of dignified jobs are less and less part of towards a New Eco-Social
the equation in these proposals (Meagher forth- Contract to Achieve
coming; Behrendt et al. 2019). Sustainable Development
Finally, demographic change such as ageing for People and Planet
and migration creates challenges for labour mar-
kets, the financing of social insurance pro- The UN Secretary General’s warning that “In an
grammes, and social inclusion (ISSA 2019; interconnected world, none of us is safe until all
UNDP and UNRISD 2017; Hujo 2019): of us are safe” (United Nations News 2020a),
Decoupling the fate of younger workers from the echoes the idea that individual well-being is
rising costs associated with ageing through priva- closely linked to that of the community, as laid
tisation of pension programmes, a fashionable out in Sect. 4. Indeed, the philosophy of Ubuntu
approach of the 1990s, is now largely considered echoes the same conviction. A new eco-social
unsuccessful, as it has resulted in further exclu- contract will need to be based on solidarity and
sions and rising old-age poverty (Hujo 2014). the common good, replacing an attitude of “us
And while the generational contract could not be against them” with an “all of us united” stance—
saved through privatisation, requiring constant whether against COVID-19, climate change, or
adjustments of contribution rates and pension any of the other challenges enumerated through-
ages, young workers are also increasingly out this chapter. Most recently development
affected by tight labour markets, precarious thinking is picking up this idea of the common
employment and increasing demands regarding good as a central objective for development
experience and skills levels, as discussed in Sect. cooperation, as the example of Germany shows
2. Last but not least, migrants and refugees are (German Development Institute 2021).
still struggling to find their way into social con- Figure 12.1 in Sect. 2 shows where claims of very
tracts that were negotiated between national con- different groups of actors coincide. They coalesce
180 I. Kempf and K. Hujo
around issues such as environmental protection according to research undertaken just prior to the
and just transition, a changing world of work that crisis (Tebaldi 2019). While progress or regress
combines higher productivity and skills with in one goal has direct consequence on other
social protection, good governance and human goals, priority is given most of the time to the
rights as well as greater equality. Differences and economy leading to too little climate or environ-
trade-offs exist, and must be negotiated openly in mental action, too late. Willis (2020), for exam-
a fair and transparent way. Some movements ple, describes the current climate politics in the
(and authors such as Willis 2020) suggest that a United Kingdom as a silent stand-off, with nei-
new eco-social contract should be informed by ther citizens nor state representatives willing to
citizens through citizen assemblies bringing new make the first move, instead of seeing climate
perspectives and expertise to combat climate action as a social contract between citizens and
change and serving as a counterbalance to vested political actors necessary to improve lives, liveli-
interests. Grassroots participation and the inclu- hoods and nature. Her argument is that citizens
sion of previously excluded voices are especially are waiting for political will and signals to tackle
necessary when it comes to the process of how to the urgent crisis before making changes to their
get to a new eco-social contract. Southern voices lifestyles, while politicians wait for voters to
and indigenous peoples’ traditional knowledge claim climate action through votes for green
have been neglected in this debate, yet much can agendas.
be learned from them, in particular regarding the Further, demographic shifts due to climate
sustainable management of natural resources. change–induced migration, the need to care for
Bringing the green and the social agendas the elderly, and changes in labour markets driven
together through integrated rights-based policies by new technologies make a review of current
would represent real progress towards a new eco- social contracts urgent. As we have seen in previ-
social contract. The SDG framework forges inter- ous sections, not only are there different kinds of
linkages between the three pillars of sustainability. social contracts. Ideas also differ on how to estab-
This has helped to overcome the idea of develop- lish a contract with nature, what a new eco-social
ing first, and cleaning up later. We must design contract should look like and how it should be
and implement policies in an integrated and implemented. Coming to terms with the multi-
coherent manner. Poverty eradication, for exam- tude of perspectives and context-specificities will
ple, needs to be pursued hand in hand with envi- require decentralised participatory dialogues and
ronmental protection, with 70% of the GDP of decision making ultimately in favor of climate
the poor depending on the environment and natu- action, social justice and the common good. Here
ral resources (UNDP-UNEP 2015). Social poli- the concept of consensus found in many African
cies need to be designed in tandem with economic traditional societies and indigenous peoples’ cul-
and resource mobilisation policies to promote tures across the globe is important. According to
sustainable and transformative outcomes (Hujo Gyekye (1997), consensus means that the com-
2020; UNRISD 2016a). In the COVID-19 crisis, munity arrives at a decision by taking into the
economic, health and crisis management need to account the opinions and concerns of all, who in
be integrated for measures to be successful. In turn agree to abide by the decision that is best for
some Middle Eastern countries, for example, the common good. Yet, any consensus must also
existing social infrastructure was scaled up for respect the human rights of individuals. The
emergency income support during the pandemic, COVID-19 crisis has shown that it is possible to
but their social protection systems “have several put in place laws and policies to protect the com-
shortcomings when it comes to shock- mon good (for example, the health of the popula-
responsiveness, including limited coordination tion) and also finance social and economic sectors
between social protection, disaster management that were hit by lockdown restrictions (travel,
and humanitarian actors, a lack of contingency cultural events, restaurants, etc.). However, state
funds and limited national social registries” capacity to do so has differed greatly between the
12 Why Recent Crises and SDG Implementation Demand a New Eco-Social Contract 181
global North and the global South, as exemplified and exclusion of certain groups from different
in the fiscal stimulus gap affecting much of the social contracts. However, there are also
global South, while multilateral financial support examples where social contracts have been
is still insufficient (ILO 2020). For a new eco- extended to previously excluded groups, from
social contract to be sustainable, both the ques- religious minorities gaining access to social
tion of the commons (for example keeping global services (Mir et al. 2020), to domestic workers
warming under 2 °C) and the way of financing getting access to social protection and labour
them needs to have a broad consensus in society rights (Rojas-Scheffer forthcoming), to new
and globally. Arriving at such a consensus might rights granted to sexual and gender minorities
not be a smooth process as we stated before— such as LGBTQIA+ groups (Kaplani and
contestation and bargaining, protests and collec- Carter 2020). Progress has also been achieved
tive action, broad alliances between more and in extending labour rights and social protec-
less powerful groups, are necessary to challenge tion to informal workers, and small and
and overcome the status quo. medium-sized enterprises (SMEs), although
Based on the above analysis of previous con- coverage rates continue to be low for these
tracts and their flaws, and seeking to ensure that groups, exposing them to extreme hardships
relevant research is used in support of SDG during systemic crisis such as the COVID-19
implementation and the sustainability transition, pandemic (ILO 2020).
UNRISD is now undertaking further elaboration A progressive fiscal contract: A new eco-social
of the idea of an eco-social contract introduced in contract must go hand in hand with a new fis-
2016. The vision differs fundamentally from the cal contract that raises sufficient resources for
twentieth century social contracts, some of which climate action and SDG implementation, and
we reviewed above. A new eco-social contract is fairly distributes the financing burden.
one that will be grounded in accountable state- According to the OECD (2020), the pandemic
society relations and contribute to sustainable pushed developing countries into a shortfall of
development for people and the planet by rein- USD 1.7 trillion for 2020 in addition to an
vigorating the following principles (UNRISD existing gap of USD 2.5 trillion in annual
2021): financing to achieve the 17 SDGs by 2030.
Directing just 1.1% of the total global finan-
Human rights for all: A new eco-social contract cial assets (valued at USD 379 trillion) would
must surpass the twentieth century welfare be sufficient to fill the gap in financing the
state settlements by ensuring human rights for SDGs (OECD 2020). Indeed, it is not merely
all, including those excluded from previous reallocation of resources but the more intrac-
social contracts or relegated to a secondary table allocation of political will that are neces-
role, such as women; informal workers; eth- sary here, in the form of a new multilateral
nic, racial and religious minorities; migrants; agreement on financing the SDGs, debt relief
and LGBTQIA+ persons. This requires a and innovative financing solutions at national
human rights-based approach that goes levels. Here again we see the interconnections
beyond formal-employment-dependent social across goals, however, with domestic financ-
benefits. Universal human rights and inclusion ing schemes with progressive distributional
resonate with the SDGs in various ways. impacts supporting social integration by creat-
Consistent with its promise to address inequal- ing a social contract within society (between
ities, the 2030 Agenda commits “to leave no economic sectors, between rich and poor and
one behind”, to ensure “targets [are] met for different social groups) and between society
all nations and peoples and for all segments of and governments (Hujo 2020). A fiscal con-
society” and “to reach the furthest behind tract for the SDGs should favour financial
first” (UNGA 2015, p. 3). In the previous sec- instruments which are supportive of environ-
tion we discussed reasons for the breakdown
182 I. Kempf and K. Hujo
mental goals and the sustainability transition impacts. This includes changing consumption
(UNRISD 2016a). and production patterns to ensure climate and
Transforming economies and societies: A new inter-generational justice, which illustrates the
eco-social contract must be based on the com- link between resource use and equity (Cook
mon understanding that we need to transform et al. 2012). Moreover, the Rights of Nature
economies and societies to halt climate change approach describes inherent rights of ecosys-
and environmental destruction, and promote tems and species, as living beings that need to
social inclusion and equality. According to be given a voice and protected by law. It is
UNRISD (2016a), transformative change based on the recognition that the development
requires addressing root causes of problems and survival of human beings depend on a
instead of symptoms, which requires struc- healthy environment and biodiversity. By
tural, normative and behavioural changes that early 2021, 17 countries had enacted local or
are arguably difficult to achieve, not the least national rights of nature legislation. Ecuador
because they are related to entrenched inequal- was a pioneer here, amending its constitution
ities and power asymmetries. Transformative in 2008 to include the rights of nature. There
change demands deep seated structural is an increasing understanding of the concept
changes in order to overcome long-term strati- and associated legal action through the work
fication patterns that are likely to have impacts of the UN Special Rapporteur on Human
for future generations, locking people into dis- Rights and the Environment and Earth
advantage and constraining their choices and Jurisprudence (United Nations Special
agency. Such structural change can be cata- Rapporteur 2019) who is amplifying calls for
lysed through innovative social policies in Earth- centric rather than anthropocentric
areas such as social pensions, education, development. Earth jurisprudence (Berry
health care, employment, equal opportunity, 2002) considers the governance and regula-
based on universal approaches that enhance tions of relations between all members of the
the role of the state and community organisa- Earth community, not just between human
tions, and with strong regulatory frameworks beings, and is as thus an important aspect of a
and monitoring by citizens (UNRISD 2016a). new eco-social contract.
It is also highly compatible with alternative Addressing historical injustices: A new eco-
economic approaches such as social and soli- social contract must be decolonised, informed
darity economy (Utting 2015), new sustain- by indigenous knowledge, social values and
ability metrics used by enterprises (Utting and capacities from the global South. It must rem-
O’Neill 2020), as well as just transition strate- edy historical injustices and combat the cli-
gies which create synergies between social mate crisis fairly through just transitions. This
and climate justice (Morena et al. 2019). demand, originating in the trade union move-
A contract with nature: A new eco-social con- ment, refers to securing workers’ rights and
tract must recognise that humans are part of a decent work while economies are shifting to
global ecosystem. It must protect essential sustainable production and lifestyles (Morena
ecological processes, life support systems and et al. 2019). Addressing historical injustices is
the diversity of life forms, and pursue har- also paramount in view of the triple injustice
mony with nature. While the term green associated with climate change: unequal dis-
growth might suggest continued economic tribution of impacts, unequal responsibility
growth driven by green technologies, there is for climate change, and unequal bearing of
a need to assess real-life trade-offs, social costs for mitigation and adaptation (UNRISD
dimensions and planetary boundaries. Indeed, 2016a). A new eco-social contract needs to
economic growth cannot remain a predomi- replace the colonial tradition of resource
nant goal unless it is decoupled from natural exploitation with participatory and sustainable
resource use and adverse environmental use of natural resources, as well as benefit
12 Why Recent Crises and SDG Implementation Demand a New Eco-Social Contract 183
sharing. The historical injustice of colonialism solidarity with other organisations, such as
created mistrust and discrimination and is still human rights or religious organisations.
institutionalised. Self-determination and rec- New forms of solidarity: A new eco-social con-
ognition of indigenous peoples’ rights will be tract requires new bottom-up approaches to
a vital part of applying traditional knowledge transformative change for development, bring-
in climate change adaptation. The interna- ing together social movements and progres-
tional indigenous peoples’ movement has sive alliances between science, policy makers
brought youth voices into the debate at the and activists. It must unite broad coalitions
national and international levels as well, against as climate change, inequalities and
through UN and civil society supported net- social fractures. Greater inclusion and access
works and their own regional organisations.3 to rights does not happen automatically; it is
Traditional systems of resource management the result of political strategies and collective
have been analysed in the literature (Ghai and action putting pressure on public opinion and
Vivian 1992; Sarfo-Mensah and Oduro 2007; decision makers (UNRISD 2016a; Köhler
Chianese 2016; Wehi and Lord 2017) but have 2020; Phillips 2020), as showcased by power-
not found their way into mainstream public ful movements such as Black Lives Matter,
policy or action. There are still few examples Me Too and Fridays for Future, but also
of marginalised groups being brought into marches of indigenous peoples, the landless
social contracts through the broad distribution and peasants in Brazil and India.
of the benefits of resource extraction, as is the
case of the indigenous majority population in A new eco-social contract must connect sci-
Bolivia (Paz Arauco 2020; Koch and Perreault ence, policy, research and action communities in
2019). prognosis, diagnosis and dialogue for action. The
A contract for gender justice: A new eco-social contract, in terms of process and outcome, will
contract must recognize that previous social reflect a reconfiguration of a range of relation-
contracts have been built upon an unequal ships that have become sharply imbalanced—
sexual contract (Pateman 1988). It must go those between state and citizen, between capital
hand in hand with a contract for gender justice and labour, between the global North and the
in which activities of production and repro- global South, between humans and the natural
duction are equally shared by women and men environment. It will be based on rebalancing
(UNRISD 2016a; Esquivel and Kaufmann hegemonic gender roles and relations rooted in
2017), and where sexual orientations and patriarchy. Through co-construction and mutual
expressions of sexual identity are granted learning it will help define rights and obligations,
equal respect and rights. In light of recent give a voice to marginalised groups, promote
backlashes, there is a continued need for greater equality and solidarity, and provide legiti-
empowerment and solidarity among social macy, credibility, trust and buy-in for reforms
movements fighting for gender justice, includ- underpinning transformative change. Eventually,
ing LGBTQIA+ groups (Kaplani and Carter a binding, well-resourced and accountable eco-
2020). UNRISD (2016b) research in China, social contract will serve to reduce inequalities in
India and Indonesia has shown that End all their dimensions, help us to recover from
Violence Against Women campaigns were COVID-19 in an equitable and transformative
more effective when they were able to catalyse way, and improve our resilience for shocks and
crises yet to come.
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Index
A C
Acid deposition, 30 Capture fisheries production, 70, 71
Adaptation Gap Report, 97 Caribbean community (CARICOM), 48
Africa Renewable Energy Initiative Caribbean states
(AREI), 18 (post-)colonial context and political
African Monetary Co-operation Program economy, 49–51
(AMCP), 81 tourism, 51, 52
Agenda for Sustainable Development, 10 Central Banks, 32
Agriculture, 96 Chinese dam impoundments, 63
Aichi biodiversity, 37 Chronic Poverty Advisory Network
A new eco-social contract, 179–183 (CPAN), 130
fiscal contract, 181 Citizen investor programmes (CIPs), 49, 51
gender justice, 183 Claims and proposals, stakeholders, 175
green and social agendas, 180 Climate change, 8, 10, 20, 21, 48
historical injustices, 182 Climate change intervention programs, 13
human rights for all, 181 Colonialism, 22
new forms of solidarity, 183 coloniality, 51
transform economies and societies, 182 colonial processes, 50, 51, 54
UNRISD, 181 Communication strategy, 76
Aquaculture, 71 Community financing, 100, 101
Asian Crisis, 27, 28 Conservation farming (CA), 126
Asian Development Bank, 20 Cooperation mechanisms, 60
Asian financial crisis, 27 COVID-19 crisis, 27
Atma Nirbhar, 94 COVID-19 pandemic, 49, 51, 54, 87, 97,
Atmospheric emissions, 33, 34, 36 99, 101
economic impact, 2
financial crises, 2, 4
B support and recovery strategies, 5, 7, 8
BAIF DHRUVA Wadi project, 101
Bank financing for environmental regeneration, 102
Biodiversity loss, 8 D
Bonn challenge, 37 Debt repayment, 12, 82
Borrowing Dependent variable, 90
data source, 86 Descriptive statistics, 88
debt overhang’ theory, 83 Desertification, 95
debt repayment, 82 DHRUVA project, 101
economic growth, 82 Disaster risk management, 13
empirical model, 84–86 Disaster Risk Reduction 2015-2030, 99
finance investment opportunities, 83 Domestic philanthropic funding, 101
public external borrowing, 82 Donor and corporate social responsibility (CSR)
spline regression, 84 financing, 101
© The Author(s), under exclusive license to Springer Nature Switzerland AG 2022 187
A. Antoniades et al. (eds.), Financial Crises, Poverty and Environmental Sustainability: Challenges
in the Context of the SDGs and Covid-19 Recovery, Sustainable Development Goals Series,
https://doi.org/10.1007/978-3-030-87417-9
188 Index
E Fish-related losses, 74
Economic adjustment policy, 41 Fixed-effect panel threshold model, 85
Economic losses, 74 Foreign exchange, 53
Economic Survey 2020-21, 100 Forest land emissions, 37
Ecosystem deterioration, 61 F-statistic, 86
Employment effect, 102
Environmental Kuznets curve’ hypothesis (EKC), 27
Environmental regeneration, 97 G
Environmental sustainability, 29 G20 Energy Policy Tracker, 7
Ethiopia G20 fossil fuel support, 7
ADLI strategy, 117 Generalized Method of Moments (GMM), 36
annual percentage change, 112 German donor funding, 101
bilateral and multilateral donors, 110 Global Financial Crisis, 11, 28, 29, 32
chronic poverty in rural, 116 Government debt, 82
economic and financial stabilization, 108 Great Stagnation, 11, 26, 31–33, 36–38, 40
external sector reforms, 110 Green economics, 20, 23
fiscal reform, 109 Greenhouse gas (GHG) emissions, 26
monarchy’s reticence and lethargy, 108 Greenhouse rights development framework, 21
monetary and financial reforms, 110 Greenness of Stimulus Index’ (GSI), 7
privatization and deregulation, 110 Green Investment Bank, 21
economy, 114–116 Green New Deal, 21
environmental sustainability, 117, 118
equity, 116
fiscal, financial and external sector Reforms, 110 H
growth has reduced poverty, 115 Human Development Data, 86
growth rates, 111 Human development index (HDI), 2, 3, 85
high poverty and illiteracy rates, 119
inequity of growth, 117
per capita income and poverty, 115 I
structural adjustment programs (SAP), 108 ICICI Bank, 102
TBL methodology, 113, 114 India, SDGs
Ethiopian People’s Revolutionary Democratic Front banks and financial institutions
(EPRDF), 109 bank financing for environmental regeneration,
European Investment Bank, 20 102, 103
Eutrophication, 30 banks loans for livelihoods, 102
External borrowing, 90 NABARD, 102
External funding, 12 community financing, 100, 101
Extractive Industries Transparency Initiative, 22 donor and corporate social responsibility
Extractivism, 22 financing, 101
environmental regeneration, 97, 98
estimated need and possible sources of funds for
F livelihoods for all by 2030, 98
Falkenmark Index, 94 government’s responsibility, 99, 100
Financial crises, 2, 4, 40 individual household financing, 100
economic activity, 29 investment
environmental impact of, 26 on health and education, 96, 97
atmospheric emissions, 33, 34, 36 non-agricultural wage employment, 96, 97
biodiversity, 37–39 wage and self-employment, 96
environment-related domains, 30 jal (water), 94
forests and deforestation, 36, 37 jameen (land), 95
temporality of effects and consequences, 30 jangal (forest), 95
Environmental Kuznets curve, 27 twin strategies, 94
Great Stagnation, 31, 32 Indian Renewable Energy Development Agency
rescue and recovery funding, 29 (IREDA), 102
unsustainable patterns and implications, 29–30 Individual household financing, 100
Financial Crises and Environmental Sustainability, 26, 32 Infrastructure index, 87
Financial distress, 12 Integrated Rural Development Program (IRDP), 102
Fiscal deficit estimations, 98 Integrated Water Resources Management (IWRM) tools,
Fiscal Responsibility and Budget Management Act, 98 60, 77
Fishing practices, 28 International Financial Institutions, 2, 10
Index 189
International Fund for Agricultural Development National Sample Survey Office (NSSO), 100
(IFAD), 111 Natural Resource Management (NRM) projects, 102
International Institute for Sustainable Development (IISD), 7 New Education Policy, 96
International Monetary Fund (IMF), 29 New York Declaration on Forests, 37
International Trade Union Congress (ITUC), 174 NGO Bhartiya Agro Industries Foundation, 101
Irrigation development, 70 Non-agricultural wage employment, 96
Non-farm sector, 97
Non-timber forest produce (NTFP), 95
J
Jal (water), 94
Jalvayu, 94 O
Jameen (land), 95 ODA Recipients in Africa, 111
Jangal (forest), 95 Offshore sectors, 53
Janvar, 94
P
K Panel Smooth Transition Regression (PSTR) model, 84
Konjunkturforschungsstelle (KOF) index of globalization, 86 Panel Threshold Regression (PTR), 82, 84
Kwacha devaluation, 122 Patient capital, 21
Population and health access, Tejakula Sub-district, 142
Pradhan Mantri Mudra Yojana (PMMY) scheme, 102
L Private investment, 83
Linear fixed effects model, 12 Progressive taxation, 22
Linear specification model, 85 Protected Area Downgrading, Downsizing and
Living Standards Measurement Surveys (LCMS), 123 Degazettement (PADD), 39
LMB 20-Year Plan Scenario, 71, 72 Public indebtedness, 83
Lower Mekong Basin (LMB), 60–62 Public investment on health and education, 96, 97
Puerto Rican model of development, 51
M
Mafatlal family charity, 101 R
Mahatma Gandhi National Rural Employment Guarantee Ramsar Convention, 71
Act, 96 RAPFISH methodology, 140
Mahatma Gandhi National Rural Employment Guarantee RBL Bank, 102
Scheme (MGNREGS), 96–97 Reserve Bank of India, 101
Market-based logics, 9 Run-of-the-river hydropower schemes, 71
Mekong Agreement, 76 Rural Agricultural Livelihoods Survey (RALS), 123, 124
Mekong Delta, 72 Rural Infrastructure Assistance to State Governments
Mekong River basin (RIAS), 102
CIA assessment framework, 64
cross-sector impacts, 64, 65
economic indicators, 67–68 S
sustainability index, 63 SDG-based Sustainability Index, 72
transboundary impacts, 66 Self-help groups (SHGs), 101
water management, 59, 75–77 Sendai Framework, 94, 99
water security in, 60, 61 Single-threshold model, 86
Mekong River Commission Secretariat (MRCS), 62 Small-scale fisheries, COVID-19 pandemic, 138
Micro, Small and Medium enterprises (MSMEs), 102 communication, 144
Microfinance loan, 101 community resilience, 138
Millennium Developmental Goals (MDG), 19, 48 economic, 149
MUDRA scheme, 97 environment, 149
Multidimensional Poverty Index, 4, 99 health, 148
Multilateral Development Banks (MDB), 20 community vulnerability, 147–148
economic, 147–148
environment, 148
N health care system, 147
National Bank for Agriculture and Rural Development financial planning, 145
(NABARD), 101, 102 fisher households, 142
National Biodiversity Authority, 98 fisher monthly incomes, 145
National Food Security Act 2013, 99 historical data, 144–145
National health policy, 96, 100 household income diversification, 145
190 Index
Small-scale fisheries, COVID-19 pandemic (cont.) United Nations Research Institute for Social
household resilience indicator, 142 Development (UNRISD), 173
medical infrastructure, 142 United Nations Sustainable Development Goals
policy considerations, 152 (UN SDGs), 151
preparedness, 143–144 Upper Mekong Dam Scenario (UMD), 62
resilience indicators, 141 Urban informal sector, 97
SDGs, 150
social adaptability, 144
supply and demand, 145 V
Social contract, 176 Voluntary National Review (VNR), 99
agricultural sectors, 177 Vulnerable Groups in Kampong Thom, 162–163
communitarian approach, 176
demographic change, 179
global political economy, 179 W
mineral rents, 177 Water and sanitation project, Kampong Svay,
people and nature, 178 Cambodia, 156
social justice and equality, 176 beneficiaries, 157
state-led social development models, 178 Cambodia Climate Change Alliance’s (CCCA)
Western welfare capitalism, 176 funds, 156
Social movements, 174 key informant interviews (KIIs), 158
Socio-political instability, 5 poor households, 165
Soil depletion, 125 recommendations, 167
Soil fertility, 125 resilient infrastructure, 157
Spline regression, 84 rural facilities by village, 161
Structural Adjustment Program (SAP), 12, 108, 110, vulnerable groups, 162
111, 114 Water management, 78
Sussex Sustainability Research Programme, 32 Water-use cooperation, 78
Sustainability Index, 12, 63 World Bank Group, 20
Sustainable development commitments, 49 World Development Indicators, 86
Sustainable Development Goals (SDGs), 17, 66, 99 World Economic Forum, 8
Caribbean tourism and, 51, 52 World Energy Related CO2 emissions, 4
consumption and production patterns, 173 World Trade Organisation, 50
development community, 19
global socioeconomic model, 173
inequality, 173 Z
national and global responsibilities, 48 Zambian poverty dynamics
poverty rates in 2020, 172 chronic poverty, 124
production and consumption, 19 fishing, 126
projects and infrastructures, 20 provincial variation, 128
Sustainable economic development, 40 rural occupations, 125
small-scale farming, 126
social cash transfers, 128
T soil and water conservation, 126
Tax Justice Network, 22 women headed households, 127
Terrestrial protected areas, 40 Covid19, 131
Threshold effect test, 88, 89 debt crisis, 135
Tonle Sap Lake, 70 debt situation, 123
Tourism, 51 disaster risk management, 123, 134
Trade openness, 85 downward pressures, 130
Transboundary issues/conflicts, 78 energy supplies, 123
Transparency and public consultation, 78 food poverty, 122
Tributary dams, 70 Health shocks, 132
Triple Bottom Line analytical framework, 12, 114 inadequacy of public and private investment, 134
Troika Programme (TP), 28 macro-economic context, 122
Twin investment strategy, 12 phone surveys, 122
political context, 122
political economy analysis, 133
U poor households, 124
Umbrella Programme on Natural Resources Management rural households, 125
(UPNRM), 102 scarcity of assets among poor households, 134
United Nations Development Program (UNDP), 85 sustained escapes, 128–130