New Report : Social Expenditure Monitor for Arab Countries : Joint Report by ESCWA / UNDP / UNICEF

Click here to download the report (PDF) or here for the Policy Brief

An interactive presentation is available here.

Amman/Beirut - Public spending in the Arab region, measured as a share of GDP, has remained virtually unchanged over the past decade at 34 per cent, only one percentage point below the global average, and with the outbreak of the COVID-19 pandemic in 2020, the global average rose to 40 per cent, while the regional average only increased by two points, to nearly 36 per cent, due to the narrow fiscal space and shrinking incomes that the region's economies face, according to a new report issued today by the Economic and Social Commission for Western Asia (ESCWA), the United Nations Development Program (UNDP)and the United Nations Children's Fund (UNICEF).

The report, titled “Social Expenditure Monitor for Arab Countries: Towards Making Budgets More Equitable, Efficient, and Effective to Achieve the Sustainable Development Goals,” is based on a tool developed by ESCWA to support decision-makers in enhancing the efficiency of social spending in Arab countries and directing it in a meaningful and “smarter” way to support national development priorities.

The report shows that Arab countries allocate huge amounts of money to subsidies, which represents a chronic pattern of unfair spending that is not directed towards the formation of human capital. The other worrying trend is that about 80 per cent of social spending in the region goes to current expenditures on wages, salaries and public transfers, while the percentage allocated to health, education and social protection does not exceed 8 per cent. Despite the progress made in Arab countries in expanding access to education and health care, these efforts have not translated into better outcomes in these areas.

UNICEF Regional Director for the Middle East and North Africa, Adele Khodr said that at a time when social spending, especially focusing on the poorest and most vulnerable segments of the population was most needed, public finances were under greater stress than ever in the region. Launching this joint report aimed to provide a solid evidence base to make the case to prioritize social sector budget allocations, whilst also ensuring such financing is used in the most efficient and equitable manner to achieve better outcomes, especially for the most vulnerable.

In light of the increasing burdens of debt on Arab countries, the report recommends improving local tax revenues by increasing the ability to collect taxes, enhancing tax fairness and the progressive nature of taxes, in addition to controlling illicit financial flows, provided that these efforts are linked to increased investment in public services that enhance confidence of taxpayers. The report also recommends utilizing innovative debt relief tools, such as debt swaps for climate action financing and projects that accelerate the achievement of the Sustainable Development Goals.
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