Why an inclusive and sustainable recovery from Covid is more critical than ever for the Arab world

The Middle East and North Africa region is at another crossroads. Many countries were grappling with economic and social challenges before Covid-19 hit, compounding issues they already faced with water scarcity, pollution, and increased climate risks. The pandemic is fast eroding their hard-won gains in development, and now the gap between them and other middle-income countries is at risk of growing.

The burden of all the challenges they face has landed disproportionately on the poor and vulnerable, widening social and economic divisions and pushing more people into poverty. Fiscal constraints limit their capacity to recover at the speed and scale they need. Some countries are even fighting a second wave of the coronavirus, seeing a resurgence in cases.

As they struggle with their plans, a resilient, inclusive, sustainable and efficient recovery is more critical than ever. It could usher in a new model of growth. "Supporting a Resilient Recovery" is also the theme of this year's World Bank and IMF Annual Meetings from October 12-18. In particular, a high-level event titled "A Sustainable Recovery for People and Planet" will look at what investments today can unlock short-term gains—jobs and economic growth—as well as deliver the benefits of resilience, decarbonisation, cleaner air and cleaner water, healthier oceans, and more sustainable food and agriculture systems.

For the Mena region, recovering from the crisis will require a quick rebound in jobs—sorely needed even before Covid-19. About 4.9 million jobs are on the line because of the pandemic; 300 million young workers are still due to join the labor force over the next 30 years. Transitioning to a green economy has the potential to create millions of jobs, while making countries more resilient and competitive in tomorrow's world.

The right investments, such as upgrading infrastructure to meet sustainability standards, expanding climate smart and digital agriculture, improving landscape management, and upgrading slums can reap triple dividends: short-term jobs, more sustainability, and stronger inclusion.

Morocco is creating the next generation of green entrepreneurs by focusing on getting young people in rural areas into agri-smart enterprises, with a target of creating 350,000 new farmers by 2030. In Tunisia, conservation efforts and land and water management have helped diversify livelihoods in local communities and created additional sources of income, especially for women. More than 200 micro-projects have given outlying areas a boost, benefiting some 17,000 people, and helped combat desertification.

Around the world, countries are promoting green stimulus packages that support cleaner technologies, renewable energy, and smart cities, accelerating the switch to a low-carbon path and expanding productive investments at the same time.

Having to work around limited fiscal resources, presents an opportunity to tackle inefficiencies in public spending and at the same time improve natural resource management.

Reforms that support cost recovery in water services, promote water re-use, repurpose agricultural spending, or foster energy efficiency can help slim down government budgets—all with better outcomes for both people and the planet.

The cost of air pollution in Greater Cairo is estimated to be equivalent to 1.35 per cent of Egypt’s gross domestic product, while in Iraq the cost of environmental degradation represents losses of as much as 6.4 per cent of GDP a year. In Jordan, poor resource management and the Covid crisis have pushed the water authority’s annual deficit up to 2 per cent of GDP.

Recovery from this crisis must be inclusive. Before Covid, a weak state–citizen social contract threatened to undermine peace and stability in the region. It is critical now to use recovery to rebuild trust and ensure inclusivity.

Key to that is understanding the impact of the pandemic on different population groups and geographic regions within a country. With this information to hand, programmes can be designed to ensure no one is left out when it comes to accessing services, including digital and financial services, to soften the blow of other shocks.

The World Bank's response to the devastating explosion in Beirut is a case in point. Together with the United Nations and European Union, the bank developed a people-centred Rapid Damage and Needs Assessment to coordinate reconstruction efforts  and to devise a way for much needed and long overdue reforms without which the already badly shattered trust between the state and its citizens will definitely fade away.

Last but not least, the pandemic is a cruel reminder of the importance of being proactive and prepared before disaster strikes. The estimated impact of climate change-induced water scarcity, for example, already amounts to 6 to 14 per cent of the Mena region’s GDP. In some countries, agricultural productivity could drop by up to 60 per cent. Parts of the region could experience more than 200 days a year of extreme heat and floods, while rising sea levels could displace millions of people and jeopardise coastal assets.

Climate-smart design is much less costly than repairing the damage. Targeted reforms, investments in green and grey infrastructure, research and development for coastal resilience, flood and drought risk management, land restoration, and reducing the urban heat island effect could each transform major challenges into new economic opportunities.

By virtue of their size, recovery programmes themselves present a rare chance to strengthen resilience to climate change.

The pandemic has presented the Mena region with a set of unprecedented challenges. The World Bank is ready to help it chart its way forward. We have already provided new financial commitments of up to $3.6 billion to Mena countries recovering from the dual economic shock of the pandemic and subsequent collapse in oil prices. The hope is to emerge from this crisis stronger. A resilient, inclusive, sustainable and efficient recovery could pave the way toward a more prosperous, sustainable, and equitable future.

Ferid Belhaj, is the World Bank's vice president for the Middle East and North Africa