Malawi Poverty-Environment Initiative
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Malawi Poverty-Environment Initiative Economics Assessment/Valuation of Environment and Natural Resources Country Experience Presented to the PEI Africa Regional Economic Forum 8-11 November 2010. Outline. Government of Malawi UNDP-UNEP Poverty- Environment Initiative.

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Malawi poverty environment initiative

Malawi Poverty-Environment Initiative

Economics Assessment/Valuation of Environment and Natural Resources

Country Experience

Presented to the PEI Africa Regional Economic Forum

8-11 November 2010


Government of malawi undp unep poverty environment initiative

Outline

Government of MalawiUNDP-UNEP Poverty- Environment Initiative

PEI Program Objectives

Key Achievements related to Economic Valuation of ENRM

Objectives and Methodology

Key Findings/Recommendations

Policy Impact

Challenges and Response

Lessons Learned

Next Steps


Government of malawi undp unep poverty environment initiative1

BACKGROUND

Government of MalawiUNDP-UNEP Poverty- Environment Initiative

The UNDP-UNEP PEI supports Government to:

Include environmental sustainability as a core objective in national development planning (e.g. Malawi Growth and Development Strategy) & implementation so that poverty reduction and other economic development objectives are not undermined by the unsustainable use of natural resources.

Build capacity so that decision-makers know:

How environmental sustainability contributes to development; and

How to include environmental sustainability in development planning & implementation.


Government of malawi undp unep poverty environment initiative2

Government of Malawi UNDP-UNEP Poverty- Environment Initiative

Draft report presented to and approved by the PEI Technical Committee

Draft report presented to a national consultative workshop

Consultants currently incorporating comments

Report yet to be presented to the Steering Committee for vetting

KEY ACHIEVEMENTS


Government of malawi undp unep poverty environment initiative3

Government of Malawi UNDP-UNEP Poverty- Environment Initiative

The report has been used in drafting the socioeconomic chapter for the Environmental Outlook Report

The draft report has already generated a lot of debate in the media

KEY ACHIEVEMENTS


Study context

Study Context

  • About 80% of Malawians depend on renewable natural resources for subsistence and income

  • Dependence on rain-fed agriculture implies significant role of natural resources

  • Sustainable management of key natural resources is crucial


Study context1

Study Context

  • Attainment of MGDS targets could be threatened by unsustainable use and degradation of natural resources

  • Hence “conservation of natural resource base” is an MGDS sub-theme under Theme 1

  • This buttresses Goal 7 of MDGs

  • The MPEI complementing Government efforts

  • The Economic Study seeks to support evidence-based policy-making and resource allocation


Objectives of the economic study

Objectives of the Economic Study

  • Provide evidence on the costs and benefits of natural resource management

  • Examine the link between natural resource management  poverty reduction, economic well-being & development

  • Assess net benefits of key interventions that encourage sustainable natural resource use


Study design and general methodology

Study Design and General Methodology

  • Desk reviews and interviews

    • Characteristics

    • Significance

    • Threats/loss

    • Policies

  • Case studies in 3 catchments

    • Linthipe

    • Lower Shire

    • Middle Shire

       Visits

       Analyses of satellite images for 1994-2008


Key findings

Key Findings

National GDP figures are understated:


Malawi losing 191m 5 3 of gdp annually

Malawi losing $191m (5.3%) of GDP annually!

MPEI Economic Study Report #1


Key findings1

Key Findings

  • Malawi is losing significantly!

    • 5.3% of GDP annually ($191m) at 2007 prices

    • More than allocation to key ministries in 2009

      • Education: $175.3 million

      • Health: $163.6 million

    • 28% of this ($54 million) is due to reduced yields from soil loss

    • $600m over 10 years @ 10% discount rate

      • $200 per household


Key findings2

Key Findings

Adjusted Net Savings (ANS)

= green accounting rate of national wealth creation

= national saving + human capital formation – unrenewed NR use

  • WB estimate = 12.24% of GNI

  • WB/Authors = 7.14% of GNI

  • Thus, environmental and natural resource degradation implies that wealth is being created more slowly

  • At 4.87% of GNI, educational expenditure is outweighed by natural resource degradation (5.1% of GNI)


  • Some implications yield loss

    Some implications: yield loss

    • Recall: Yield loss due to soil degradation = $54m p.a.

    • Conservatively, this reduces agricultural yields by 6%

      • Other studies document higher losses

      • 4-11% p.a. (WB, 1992)

      • 8-25% p.a. (Bishop, 1995)

    • Benin et al (2008) argue:

    • 6% improvement in agricultural yields during 2005-2015, would increase overall GDP growth from 3.2% to 4.8% p.a.

      proportion in poverty falling to 34.5% by 2015 i.e. the incidence of poverty falls 12.5% resulting in 1.88 million people being lifted above the poverty line by 2015


    Some implications overall

    Some implications: Overall

    • Benin et al (2008) consider GDP growth of 4.2% p.a. above the baseline case.

      • Over 2004 – 2015, the proportion in poverty would be halved from its 1990 level – to 25.2%

      • i.e. sustainable NR use could have enabled the MDG1 target to be reached

    • If the lost economic value from unsustainable resource use each year across all ENRM sectors (5.3% of GDP) is converted into economic growth, the impact on poverty would be much larger


    Government of malawi undp unep poverty environment initiative4

    POLICY IMPACT

    Government of MalawiUNDP-UNEP Poverty- Environment Initiative

    Policies likely to be affected/adjusted.

    Review of the Malawi Growth and Development Strategy (MGDS)

    Review of the Policy Forestry 1996

    Budget Guidelines

    Public Environmental Expenditure Review (PEER) in the offing

    Incorporation of ENRM into the Guide to Executive Decision Making

    Fisheries and Aquaculture Management Act


    Government of malawi undp unep poverty environment initiative5

    CHALLENGES AND RESPONSE

    Government of MalawiUNDP-UNEP Poverty- Environment Initiative

    • The study has taken unnecessarily long due to lack of capacity to conduct such detailed analysis

    • There is a temptation and interest by stakeholders to cover all natural resource sectors. This can make the study loose focus and unmanageable

    • Hybridisation of local and international consultants

    • Continuous negotiations and consultations with the consultants

    • Concise TORs and agreement by TC on the areas to be covered


    Government of malawi undp unep poverty environment initiative6

    LESSONS LEARNED

    Government of MalawiUNDP-UNEP Poverty- Environment Initiative

    The consultative process requires heavy investment and patience

    The need to involve all stakeholders especially those that may challenge the results

    There is great interest to mobilise evidence for the cost of sustainable use of natural resources in Malawi

    The analysis should be quite instrumental in convincing decision makers to invest in ENRM


    Government of malawi undp unep poverty environment initiative7

    NEXT STEPS

    Government of MalawiUNDP-UNEP Poverty- Environment Initiative

    Vetting of the report by the Steering Committee

    Capacity building for research institutions

    Capacity building for Cabinet and Parliamentary Committee

    Capacity building for journalists

    Advocacy using media and CSOs

    Monitoring on the use of the report


    Government of malawi undp unep poverty environment initiative8

    NEXT STEPS

    Government of MalawiUNDP-UNEP Poverty- Environment Initiative

    Based on the results of the study, the PEI Country Team is improving its work in order to help promote behavioral change and improved plans, policies, budgets and monitoring frameworks

    Involvement of different stakeholders to deliberate on the report

    Inclusion of the academia on the use of the report

    Moving in to position issues of ENRM in all current developments e.g. ASWAp, MGDS

    Using the report to lobby for incorporation of ENRM in Government Policies and Planning including in Budgetary frameworks


    Government of malawi undp unep poverty environment initiative9

    Government of MalawiUNDP-UNEP Poverty- Environment Initiative

    Thank you for listening

    http://www.unpei.org/programmes/country_profiles/malawi.asp


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