Transformation Bartholomew Armah Policy and Planning Coordinator - - PowerPoint PPT Presentation

Sustainable Structural Transformation

Bartholomew Armah Policy and Planning Coordinator UN Transition Team

Outline

• Structural transformation in the context of sustainable development
• The UN approach to structural transformation
• Recent socio-economic and environmental trends and trade-offs in

structural transformation

• Policy sequencing and structural transformation

Structural Transformation and Sustainable development

• Traditional definitions of ST have focused on productivity with little

emphasis on inclusion and sustainability

• Definitions emphasize:
• A relative decline in the sectoral shares of low-productivity agriculture and

low value-added extractive activities;

• a relative increase in manufacturing and high-productivity services;
• a decline in the relative share of agricultural employment in GDP;
• increasing rural-to-urban migration that stimulates the process of

urbanisation;

• and the rise of a modern industrial and service economy.
• In Africa the shift has been from agriculture to not necessarily high

productivity services

Sustaining Structural Transformation – the new UN approach

• Explicitly takes into account inclusion and environmental

sustainability

• Economic transformation comprises long lasting fundamental

changes in the economy that raise the overall productivity level while ensuring adequate quantity and quality of employment, equitable distribution of income and wealth, and access to quality public services, and protection of and respect for environment

• Addressing the social and environmental consequences of policies

should not be viewed as an afterthought to the economic growth process.

Trade-offs

• Few developed countries have been successful in simultaneously

achieving rapid, green, and inclusive growth.

• Some studies [e.g., Dastidar (2012)] found that where structural change is

characterized by a transition from agriculture to industry, inequality did not increase in developing countries.

• On the other hand, inequality was found to rise in developing countries

experiencing an agriculture-service transformation. In the latter case, the increase in inequality rises with when initial levels of inequality exceed the average.

• Studies [Qizilbash, 2010] find that countries that perform well in indicators
• f well-being and poverty had the highest levels of environmental

degradation

• Sweden and Denmark rank 39th in Carbon Dioxide emissions

Territorial emissions in Metric tons of CO₂

2000 4000 6000 8000 10000 12000 1960 1962 1964 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 EU28 China United States of America India Indonesia

Positive growth trends in Africa

• 4
• 2

2 4 6 8 10 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Advanced economies Emerging market and developing economies Sub-Saharan Africa World

But evidence of de-industrialization in Africa

5 10 15 20 25 30 35 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Manufacturing value Added (% of GDP)

Sub-Saharan Africa East Asia & Pacific World 5 10 15 20 25 30 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Employment in industry % of total

Sub-Saharan Africa East Asia & Pacific World

And growth not associated with rising

• pportunities for decent work

Vulnerable Employment % of Total Wage and salaried workers % of Total

10 20 30 40 50 60 70 80 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Sub-Saharan Africa East Asia & Pacific World 10 20 30 40 50 60 70 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Sub-Saharan Africa East Asia & Pacific World

Perspectives on policy sequencing

• How can we ensure that positive changes along social and

environmental dimensions reinforce economic transformation?

Prioritizing social inclusion interventions catalyzes inclusive structural transformation in Africa

Direct Social Environmental Total Economic 1.09

• 1.75

0.81 0.15 Direct ST impact Economic Social Total Environmental

• 0.19

1.71

• 1.25

0.27 Direct ST impact Economic Environmental Total Effect Social 0.02 2.79

• 2.37

0.44

Parting thoughts

• Sequencing matters: Structural transformation measures should be

informed by efforts to assess the likely effects of policy interactions

• n inclusion and sustainable development
• Reflect the environmental dimension in indicators of decent work:
• The Decent Work Agenda currently combines access to full and

productive employment with rights at work, social protection and the promotion of social dialogue

• But decent work should also be about the environment impacts of
• nes occupation
• Domestic job creation may not always be consistent with free trade

in the short run

Ongoing projects in Africa – glimpses of industrial development

• Ethiopia’s flagship Hawassa Industrial Park is a 300-hectare industrial park, which is

focused on textile and garment production and is expected to create about 60,000 jobs when fully operational.

• The park has state-of-the-art infrastructure and facilities, which will be mostly powered

by renewable energy, making it the first sustainable textile and apparel industrial park in Africa.

• The Derba-Midroc Cement Project a $350 million integrated cement plant project which

is uses local limestone deposit of 165 million tons

• The government banned cement imports on 27 March 2012 to protect upcoming

domestic cement production.

• It is helping to meet 100% of the country’s cement needs and exporting to nearby

countries.

• The plant resulted in a 75% drop in the price of cement and a reduction of cement

import dependency.

• The project created about 2,000 jobs during construction and presently employs 739

permanent workers of which 17% are females.