Explain the major challenges confronting Sustainable Development.

  The term sustainable development entered the vocabulary of policy planners and decision-makers following the publication of Our Common Future, the report of the World Commission on Environment and Development (commonly known as the Brundtland Report after the Commission’s chairwoman) in 1987 (United Nations, 1987). The Commission described sustainable development as: “Development that meets the needs of the present without compromising the ability of future generations to meet their own needs”.

This characterisation implies that future generations should enjoy the same opportunities for consumption as the present generation does. The definition has a strong human need-centred ethical stance, concentrating on the satisfaction of human needs rather than the protection of the environment. This is in contrast to the above mentioned strategy from the World Conservation Union. It is noticeable however that the definition is not very strict. This was a deliberate policy of the commission.

It thus reflected the growing spirit of cooperation that had sprung up in tackling environmental issues as well as the increasing focus in the sustainability discourse on “participation”. Its aim was to achieve consensus on ways to balance economic development processes against global ecological conservation.

By the mid-1990s, other noticeable shifts could be observed in the definition of sustainable development. The first was the increased focus on social issues; a tendency that was also reflected in the EU approach to sustainability. The other important change was the demand for the simultaneous achievement of economic, social and environmental objectives. A win-win approach was increasingly advocated in which all three dimensions are comprehensively integrated and trade-offs are avoided to the extent possible.

Sustainable Economic Growth

Today, there is little doubt about the wisdom of sustainable development. But the world is still far from having reached such a development path. In the environmental field, the challenges range from accelerating climate change to loss of biodiversity and increasing water scarcity. 

Natural resource management is congruent with the concept of sustainable development, a scientific principle that forms a basis for sustainable global land management and environmental governance to conserve and preserve natural resources.

Natural resource management specifically focuses on a scientific and technical understanding of resources and ecology and the life-supporting capacity of those resources. The term Environmental management is also similar to natural resource management. The WSSD “Tills some gaps in the Agenda 21 and the Millennium Development Goals and addresses some newly emerging issues, including to halve the proportion of people without access to basic sanitation by 2015; to use and produce chemicals by 2020 in ways that do not lead to significant adverse effects on human health and the environment; to maintain or restore depleted fish stocks to levels that can produce the maximum sustainable yield on an urgent basis and where possible by 2015; and to achieve by 2010 a significant reduction in the current rate of loss of biological diversity”.

It was clear that such disequilibria could not continue indefinitely. A globally coordinated adjustment, whereby surplus countries would expand domestic demand to compensate for slower growth in the deficit countries, had been consistently advocated by many observers and institutions, including UNCTAD in several of its Trade and Development Reports (TDRs). In 2004, for example, the TDR on its very first page stated: “Large disparities in the strength of domestic demand persist among the major industrial countries, and increasing trade imbalances between the major economic blocks could increase instability in currency and financial markets”. However, policymakers failed to acknowledge the need for an internationally balanced macro-economic management of demand, and in several cases greatly overestimated inflationary risk. A hard-landing scenario was thus predictable. 

Policy-makers also failed to draw lessons from the experiences of earlier financial crises. Like previous ones, the current crisis follows the classical sequence of expansion, euphoria, financial distress and panic.

In the build-up to the present crisis, a large proportion of the credit expansion in the United States and other developed economies financed real estate acquisitions, fuelled asset price inflation and spurred debt financed private consumption rather than investment in productive capacity that could have generated higher real income and employment in a sustainable manner. After 2000, household debt increased rapidly in many countries, particularly in those economies where current-account deficits had widened, leading to an accumulation of external liabilities. What makes this crisis exceptionally widespread and deep is the fact that financial deregulation, “innovation” of many opaque products and a total ineptitude of credit rating agencies raised credit leverage to unprecedented levels. Blind faith in the “efficiency” of deregulated financial markets led authorities to allow the emergence of a shadow financial system and several global “casinos” with little or no supervision and inadequate capital requirements. 

In all dynamic panel models, the lagged variable “FDI” appear significant at 1% level; foreign investors investing in countries that traditionally attract FDI. The variables: GNI/cap, trade openness, inflation, and public expenditure appear again significant in estimations and generally have the expected sign (except for inflation). Other variables such as growth, real exchange rate, hard infrastructure and political risk (which can be correlated with business climate) are not significant. Hence, compared with the fixed effects models, the relationship of FDI and business climate is a more robust one. In specification, the variables “inflation” and “growth” are not significant and the final variable has the expected sign. Overall, FDI inflows correlate positively and significantly with stable government’s track record (GDI per capita and trade openness as complements) while business climate score matters.

The business climate change and the political risk represent defining issues of our time and their favourable levels offer huge opportunities for foreign investors. The aim of this chapter was to analyse the linkages among business climate, political risk and foreign direct investments for a data sample of 33 developing countries over the period 1996-2008. For this purpose, we used two main models: a fixed effect model and a dynamic panel model using the Arellano-Bond GMM estimator. Our main results could be summarized as follows: 

The fixed effect model highlights the importance of the political risk and the soundness of the government track record (the role of the trade openness and GNI per capita) while the business conditions do not significantly associated to FDI inflows. As concerns the dynamic panel model, the results are more convincing regarding the business climate in the sense that favourable business conditions are significantly and positively associated with FDI inflows. To put our results into perspective, the scale of FDI will depend on the progress made in delivering sound economic policies, good governance, socio-political stability and adequate infrastructure. 

Population, health, education, employment, social integration, governance and empowerment are all socioeconomic issues of crucial importance to sustainable development. Individuals and institutions are the basic contributors to social capital formation. Growing disparities in wealth, unemployment, education, job insecurity, create inequities that marginalize vulnerable groups such as women, children and the elderly. Good and effective governance is a challenging prerequisite to achieve sustainable development. It includes strengthening the institutional and legal frameworks, nurturing equitable participation in decision-making, approaching policy-making from an inter-disciplinary approach and promoting effective participation by civil society.

On the occasion of holding the World Summit on Sustainable Development (WSSD) in Johannesburg from 26 August to 4 September, 2002, as a continuation to its efforts in the field, has issued a number of Briefing Papers identifying primary issues regarding sustainable development. 

The summit aims to emphasize international commitment to achieving sustainable development through:

1. Assessing implementation of Agenda 21;

2. Reviewing the challenges and opportunities to achieve sustainable development.

3. Suggesting actions and required institutional and financial arrangements to achieve sustainable development;

4. Identifying means to support institutional structures nationally and regionally. 

Effective public participation, as noted in Principle 10 of the Rio Declaration, is also based on adequate access to information. Since 1992, the region’s interest in sustainable development has generated greater effort to incorporating environmental considerations in decision-making. Progress has been made possible thanks to advancements in cost-effective information and communication technology, the mass media, and the establishment of more effective monitoring and reporting networks. Overseas Development Assistance (ODA) is declining. The commitments made by industrialized countries at the Earth Summit in Rio a decade ago remain largely unmet. This is a cause for concern which has been voiced by several developing countries. Industrialized countries must honour their ODA commitments.

 The new instruments and mechanisms, e.g. the Clean Development Mechanism, that are trying to replace ODA need to be examined closely for their implications for the developing countries.

In view of the declining trend in ODA, developing countries must explore how they can finance their sustainable development efforts, such as by introducing a system of ecological taxation.

Private investment cannot replace development aid as it will not reach sectors relevant for the poor. Such investments and other mechanisms can at best be additional to, not replacements for, development assistance.

Conditions attached to financial assistance need to be rigorously scrutinized, and the assistance accepted only if the conditionalities are acceptable. Financial support for sustainable development programmes must not be negatively influenced by political considerations external to the objectives of the assistance.

From quantity to quality: To ensure the sustainability of the natural resource base, the recognition of all stakeholders in it and their roles in its protection and management is essential.

There is need to establish well-defined and enforceable rights (including customary rights) and security of tenure, and to ensure equal access to land, water and other natural and biological resources. It should be ensured that this applies, in particular, to indigenous communities, women and other disadvantaged groups living in poverty.

Human self-development is the core of sustainable economic growth: While conventional economic development leads to the elimination of several traditional occupations, the process of sustainable development, guided by the need to protect and conserve the environment, leads to the creation of new jobs and of opportunities for the reorientation of traditional skills to new occupations. 

From patriarchal society and male supremacy towards a holistic paradigm of equity: Women, while continuing to perform their traditional domestic roles’ are increasingly involved in earning livelihoods. In many poor households they are often the principal or the sole breadwinners. A major thrust at the policy level is necessary to ensure equity and justice for them.

From TINA approach to a Strategy of design: TINA stands for There Is No Alternative. Creating dignified work that contributes to social and environmental well-being is a cornerstone of community economic development. These types of jobs need to be accessible and are important because they pay family sustaining wages and enable people to have a sustainable livelihood. City council plays an instrumental role in helping to set policies that support the creation of meaningful work.

Polluter pays principle: To ensure the sustainability of the natural resource base, the recognition of all stakeholders in it and their roles in its protection and management is essential. Development decisions regarding technology and infrastructure are a major determinant of consumption patterns. It is therefore important to evaluate and make development decisions which structurally lead to a more sustainable society.

Appropriate technology and community-owned firms: Technologies exist through which substantial reduction in consumption of resources is possible. Efforts to identify, evaluate, introduce and use these technologies must be made. 

The traditional approaches to natural resource management such as sacred groves and ponds, water harvesting and management systems, etc. should be revived by creating institutional mechanisms which recapture the ecological wisdom and the spirit of community management inherent in those systems. There is need to establish well-defined and enforceable rights (including customary rights) and security of tenure, and to ensure equal access to land, water and other natural and biological resources. It should be ensured that this applies, in particular, to indigenous communities, women and other disadvantaged groups living in poverty.

Achieving Sustainable Livelihood 

 The world’s poor depend disproportionately on ecosystem services, and are highly vulnerable to their disruption (DFID and others 2002). With few alternative income sources, their survival and livelihoods are based on small-scale agriculture, grazing, harvesting and hunting or fishing. Without adequate infrastructure to provide safe drinking water, electricity and fuel, and transportation, people rely on fresh air, natural sources of fresh water, soil, and biodiversity to meet their basic needs.

About 1.3 billion people live on marginal lands (UNDP 2003a); these people are both the victims and the agents of environmental damage (Duraiappah 1998). Yet the role of sustainable resource management and environmental protection for poverty reduction is understated in most countries’ poverty reduction and development aid strategies.

While consumption patterns of the rich drive overexploitation of natural resources, poor families, in their daily struggle for survival, often lack the resources required to avoid degrading their local environment. Their fragile resources, often poorly defined property rights, and limited access to credit and insurance markets prevent the poor from investing in sustainable environmental management. With few alternative sources of income, they rely extensively on natural resources and ecosystem services to supply such basic human needs as food, fuel and drinking water. However, overextraction of resources disrupts the environment, causing many to lose access to the ecosystem services on which their survival depends. And when countries draw down natural capital without compensating increases in human, social, financial, or consumption substantially lower national savings rates if incorporated into national accounts. Physical capital, they become poorer. Environmental degradation and resource Environmental sustainability must be viewed not only as an issue for the poor. In fact, considerable evidence suggests that the greatest threats to environmental sustainability derive from actions taken in the rich countries of the world. The Johannesburg Declaration on Sustainable Development and Plan of Implementation notes that “Fundamental changes in the way societies produce and consume are indispensable for achieving global sustainable development” and calls on developed countries to take the lead in “Changing unsustainable consumption and production patterns.”

Since the 1992 Rio Earth Summit the number of people living in absolute poverty, particularly in developing countries has increased. According to the 2003 UN Human Development Report, there are 900 million people living in absolute poverty in rural areas. The trends are not much better in the cities, where 1 billion people live in slums. More than 1 billion people lack access to clean water supplies and more than 2 billion people worldwide lack access to adequate sanitation. 

The first Millennium Development Goal is to eradicate extreme poverty and hunger. The targets, which have to be achieved by 2015, are to:

● reduce by half the proportion of people living on less than a dollar a day; and to

● reduce by half the proportion of people who suffer hunger. The links between poverty and environment:

● Livelihoods: The poor often depend directly on a diversity of natural resources and ecosystem services for their livelihoods. They are the most severely affected when the environment is degraded or their access to natural resources is limited or denied.

● Health: The poor suffer most from unclean water, indoor air pollution and exposure to toxic chemicals. Environmental risk factors are a major source of health problems in developing countries.

● Vulnerability: The poor are particularly vulnerable to environmental hazards (such as floods, prolonged drought and attacks by crop pests) and environment-related conflict, and have the least means to cope when they occur. 

UNEP’s Global Environment Outlook 3 shows that the environment is deteriorating in many regions due to natural and man-made pressures. Such pressures include climate variability, rapid population growth and rising consumption trends that are leading to over-harvesting of resources and the pollution of air, water and land.

The report also points out that these environmental changes impact human livelihoods by reducing food security, increasing vulnerability to natural hazards and disease, and limiting opportunities for economic growth.

Livelihood frameworks are designed to assist with analysing and understanding the livelihoods of the poor and to assess the effectiveness of current efforts aimed at reducing poverty; increasingly such frameworks are being used in development planning and policy . Here, we employed the DFID Livelihoods framework described by Ashley and Carney (1999) and DFID (1999). This framework is based on the concept that people require a range of assets (including both material and social resources) in order to achieve positive livelihood outcomes.

The individual draws his/her livelihood through five types of capital assets :

● Natural Capital: Which includes the natural resource stocks from which products and services useful for livelihoods are derived.

● Physical Capital: Which comprises the basic infrastructure and producer goods needed to support livelihoods (e.g. shelter and buildings; tools and equipment used for farming or forest management; transportation, energy and communications; etc.).

● Human Capital: Which includes the skills, knowledge, ability to work and health that people need to pursue different livelihood strategies and achieve their objectives.

● Financial Capital: Which includes the financial resources that people use to achieve their livelihood objectives, including savings in various forms, access to credit, earnings and remittances.

● Social Capital: Which refers to the social resources that people draw upon to help meet their livelihood objectives, including networks and connections between people, and the rules, norms and sanctions associated with different institutions.

Following the DFID approach, we consider that communities and individuals involved in NTFP commercialization as part of a livelihood strategy will require access to each of these five types of asset in order for commercialization to be successful. Furthermore, we propose that the process of NTFP commercialization can be considered as the conversion of one form of capital asset into another. Principally, during NTFP commercialization natural capital will be converted into financial capital, but during this process the availability of other forms of capital (human, social and physical) is also likely to change. Therefore, according to this approach, the process of NFTP commercialization can be conceptualized as a change in the availability of the five different types of capital asset. The extent and pattern of this change will be influenced by the initial availability of each of these asset types. Furthermore, the overall impact of NTFP commercialization on livelihoods can be considered as a function of the change in the availability of these assets.

The extent to which the availability of different types of asset varies as a result of NTFP commer-cialization will depend on a wide range of social, economic and environmental factors, as well as the cultural and political context under which the commercialization takes place. These factors include the characteristics of the product to be commercialized, and also the characteristics of the value chain (or market chain). The list of factors that could potentially influence the success of NTFP commercialization is not only large, but also varies between products and between the socio-economic circumstances under which commer-cialization takes place.

Appropriate Knowledge: A perspective on knowledge as a sustainable resource for development has not been formulated yet. In the final analysis knowledge is an intimate communion with the essence of reality and a capacity to transform this reality for development. In this perspective efficient knowledge is required for grasping and changing this reality. It is required for natural environments to be conserved, protected and rehabilitated. The law alone cannot enforce the common interest. It principally needs community knowledge and support, which entails greater public participation in the decisions that affect the environment. This is best secured by decentralizing the management of resources upon which local communities defend and giving these communities an effective say over the use f these resources. It will also require promoting citizens’ initiatives, empowering people’s organisations and strengthening local democracy. In its broadest sense, the strategy for sustainable development aims to promote harmony among human brings and between humanity and nature. 

Equitable: The central ethical principle behind sustainable development is equity and particularly intergenerational equity. The Brundtland Commission, which played such a prominent part in popularising the notion of sustainable development defined it in equity terms as: “Development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” Subsequently the Commission’s 1987 report, Our Common Future, was endorsed by the United Nations and its definition was adopted by nations all over the world. Since then the rhetoric of equity has been incorporated into numerous sustainable development strategies and policies. The Earth Summit in Rio in 1992 reaffirmed the centrality of equity in its Agenda 21 and the Rio Declaration.

Equity is about fairness: Equity derives from a concept of social justice. It represents a belief that there are some things which people should have, that there are basic needs that should be fulfilled, that burdens and rewards should not be spread too divergently across the community, and that policy should be directed with impartiality, fairness and justice towards these ends.

Equity means that there should be a minimum level of income and environmental quality below which nobody falls. Within a community it usually also means that everyone should have equal access to community resources and opportunities, and that no individuals or groups of people should be asked to carry a greater environmental burden than the rest of the community as a result of government actions. It is generally agreed that equity implies a need for fairness (not necessarily equality) in the distribution of gains and losses, and the entitlement of everyone to an acceptable quality and standard of living.

 Participatory: Participatory monitoring and evaluation is an umbrella term for a set of new approaches that stress the importance of taking local people’s perspectives into account and giving them a greater say in planning and managing the evaluation process. Local people, community organisations, NGOs and other stakeholder agencies decide together how to measure results and what actions should follow once this information has been collected and analysed.The emphasis on participatory goes beyond the choice of particular methods and techniques to wider consideration of who initiates and undertakes the evaluation process and who learns or benefits from the findings. Recent literature stresses the significance of attitudes and behaviours (on the part of the evaluator) as integral to a participatory approach. Although the focus has tended to be on community based approaches where local people are the primary focus, other forms of participatory monitoring and evaluation are geared to engaging lower level staff in assessing the effectiveness of their organisation and working out how it can be improved.

Flexible/adaptable: It will provide all partners engaged in these with tools for decision-making and self-assessment. It will include methodological and practical resources for identifying and implementing specific solutions for the conservation, integration, enhancement and exploitation of archaeological sites in an urban setting. In order to make accessibility projects compatible with a perspective of sustainable development, these resources will be developed in a reasoned way adopting flexible, adaptable and applicable criteria.

Enforceable: The enforcement of common interest often suffers because areas of political jurisdiction and areas of impact do not coincide. Energy policies in one jurisdiction cause acid precipitation in another. The fishing policies of one state affect the fish catch of another. No supranational authority exists to resolve such issues, and the common interest can only be articulated through international cooperation.

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