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Financial resilience in small states: Lessons from Eswatini

The vulnerability burden of small states Small states are particularly exposed to the financial impacts of shocks, varying from natural disasters to the…

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By Barry Maher, Marko Kwaramba

The vulnerability burden of small states

Small states are particularly exposed to the financial impacts of shocks, varying from natural disasters to the ongoing COVID-19 pandemic and man-made events such as the Ukraine war. The shocks disproportionally and recurrently affect small states due to their peculiarities. They have small populations and economic bases combined with geographically concentrated economies, which makes them particularly vulnerable to shocks. They tend to be geographically isolated, which creates challenges in mobilizing resources to respond to shocks. Furthermore, their growth trajectories tend to rely on few sectors (undiversified) or large neighboring countries. These dynamics highlight the central importance of strengthening financial resilience in small states when driving toward development and poverty alleviation.

Eswatini, a landlocked country within South Africa, reflects these challenges in Africa.  Increasingly, like many other small states globally, Eswatini is struggling to manage the impacts of compounding shocks that spike inflation, drain the budget and current account, impede GDP growth, and increase debt and fiscal deficits. To take a sobering walk back through time (Figure 1): in 2015/16, an El Niño drought led to one-third of the population facing severe food insecurity, cost the government 19 percent of its annual expenditure (equivalent to 7 percent of GDP), and spiked inflation to 7.8 percent. In 2018/19, drought continued to grip the southern Africa region, in particular South Africa, which drove customs duties in the Southern African Customs Union (SACU) upon which the government of eSwatini (GoeS) relies for revenue, forcing the GoeS to raise additional debt. In 2020, the global COVID-19 pandemic struck, to which the GoeS mobilized a significant response package, estimated at $67 million, or 1.5 percent of its GDP. Today, in 2022, as the war in Ukraine continues, Eswatini faces current account, reserves, fiscal, and inflation pressures. Each of these compound shocks depletes budgetary resources and draws civil servants’ time and attention away from service delivery toward crisis response. To push the poverty rate lower than where it stubbornly stands at 28 percent, strengthening financial resilience needs to become a priority. And it has.

Figure 1. Repeat impact of compounding shocks in Eswatini

Sources: Authors.

The winds of financially resilient change

Emerging from the El Nino drought, the GoeS decided it was time to change. In March 2020, the GoeS requested support from the World Bank to conduct a disaster risk finance diagnostic. The diagnostic assessed the financial impact of shocks in Eswatini, the existing legal and regulatory structure for disaster risk management and response, and the financing approach for disaster response. The World Bank mobilized a team and crowded in resources from the Disaster Protection Program. The timing was (unfortunately) perfect—as the diagnostic began, COVID-19 hit the Africa region and the team observed the ability of the GoeS to finance shock response in real time.

The data uncovered confirmed that, like other small states, Eswatini faces challenges financing disaster response. Of particular importance in Eswatini, shocks devour (limited) fiscal space—an issue particularly acute for drought. Drought in Eswatini invariably means drought in South Africa, which experience has shown to lower SACU revenues. As revenue from SACU makes up nearly half of the GoeS’s revenue, droughts both increase expenditure and reduce revenue—the ingredients for a fiscal crisis. This was the case in 2016 when these dynamics led GoeS to increase debt to GDP from 13.9 percent in 2014 to 24.9 percent in 2016. Furthermore, although Eswatini’s currency is pegged to the South African rand, the high inflation triggered by rising food prices forced the Central Bank of Eswatini to increase the policy rate above the South African Reserve Bank policy rate in January 2017, increasing the vulnerability of the currency peg. The COVID-19 pandemic led again to a sharp increase in debt at 43 percent of GDP in 2021 up from 33.9 percent in 2018.

Exposure to shocks amid lack of financing instruments

Coupled with this acute fiscal exposure to shocks, the GoeS currently does not have any financing instruments in place to finance shock response and instead wholly relies on budget reallocations and ex post borrowing—a complete funding gap. The lack of financing capacity to respond to shocks was laid bare during the COVID-19 crisis when the GoeS had to rapidly seek funding from external sources to respond. To quantify the indicative financial benefits of developing a more comprehensive risk-layering approach to financing shock response, as part of the diagnostic the World Bank team conducted a Monte Carlo statistical simulation exercise.  Two financing strategies were compared (Figure 2):

  1. Base strategy. In effect the status quo where the GoeS would initially rely on $25 million of emergency ex post budget reallocation to finance shock response, and for shocks which are more costly it was assumed they would rely on ex post sovereign borrowing.
  2. Strategy B. Here an international best practice risk-layering strategy was modeled consisting of three instruments—a reserve fund, a contingency line of credit, and a sovereign insurance transfer product. Under this strategy, first the reserve fund would be used to finance response for minor shocks. For more severe shocks, the reserve fund would be exhausted, and the GoeS could draw on a contingent line of credit. Finally, for extreme shocks where the contingent line of credit is also exhausted, payouts from a sovereign insurance product would finance response efforts. This approach of combining multiple instruments is called risk layering and has been shown to be the most efficient way for governments to finance shock response.

The findings demonstrated the significant cost savings that small states like Eswatini can gain from a risk-layering strategy: $2 million to $6 million for frequent events (i.e., 1-in-5-year to 1-in-10-year events) and up to $26 million for more severe events. This analysis was of course indicative, and further technical work would be required to justify the adoption of risk financing instruments. However, it provides an important data point for small states in the Africa region regarding the benefits of adopting comprehensive risk-layering financing strategies.

Figure 2. Proposed risk-layering strategy for Eswatini

Figure 2. Proposed risk-layering strategy for Eswatini

Source: World Bank, 2022- Eswatini Disaster Risk Finance Diagnostic.

Lessons for small states

So, what lessons can we draw from the Eswatini case for strengthening resilience in small states?  Immediately three come to mind. First, small states need to get serious about improving their financial resilience—compound shocks will continue to manifest and without focused action in this space small states will find themselves in a perpetual cycle of scrambled, manic shock response. Second, adopting a National Disaster Risk Finance Strategy is critical to force prioritization of scarce fiscal resources in shock response. Currently Eswatini does not have such a strategy (although they are in the process of developing one) and so when a shock occurs multiple stakeholders advocate for their sector to be prioritized for fiscal resources, which invariably means no sectors are prioritized. Finally, developing robust risk-layering strategies can reap significant financial gains for small states when financing disaster response. Multiple financial instruments can ensure that the government has sufficient liquidity available to mobilize a rapid response and so avoid the fate that small states can suffer when impacted by shocks (inflation, increased deficits, reduced economic growth).

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Public support for extending the 14-day rule on human embryo research indicated by foundational dialogue project

The findings of a foundational UK public dialogue on human embryo research are published today, Wednesday 25th October 2023, as part of the Wellcome-funded…

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The findings of a foundational UK public dialogue on human embryo research are published today, Wednesday 25th October 2023, as part of the Wellcome-funded Human Developmental Biology Initiative (HDBI). The HDBI is an ambitious scientific endeavour to advance our understanding of human development. The dialogue project, which was co-funded by UKRI Sciencewise programme, engaged a diverse group of the public to consider how early human embryo research can be used to its fullest, the 14-day rule and the fast-paced field of stem cell-based embryo models.

Credit: Dr Matteo Molè (Babraham Institute)

The findings of a foundational UK public dialogue on human embryo research are published today, Wednesday 25th October 2023, as part of the Wellcome-funded Human Developmental Biology Initiative (HDBI). The HDBI is an ambitious scientific endeavour to advance our understanding of human development. The dialogue project, which was co-funded by UKRI Sciencewise programme, engaged a diverse group of the public to consider how early human embryo research can be used to its fullest, the 14-day rule and the fast-paced field of stem cell-based embryo models.

Headline findings include:

  • Appetite for review of the 14-day rule: Participants recognised that extending the 14-day rule could open up ways to achieve benefits in fertility and health, with participant support for reviewing this, including national discussion.
  • Confidence in regulation: There was a high level of confidence in how human embryo research is regulated, despite a low level of awareness of the regulators and statutes themselves. This included strong desire to see robust regulation governing any changes to the 14-day rule and further regulation for the use of stem cell-based embryo models.
  • Support for improved fertility and health outcomes: The strongest hopes for future human embryo research were where new knowledge would deliver improvements in understanding miscarriage, preventing health conditions such as spina bifida and raising the success rates of IVF procedures.
  • Concerns about genetically engineering humans: The public expressed concerns on the application of developments in this field to genetically alter or engineer humans.

The dialogue engaged a group of 70 people broadly reflective of the UK population in over 15 hours of activities including a series of online and face-to-face workshops with scientists, ethicists, philosophers, policy makers and people with relevant lived experience (such as embryo donors from IVF procedures).

Dr Peter Rugg-Gunn, scientific lead for the HDBI and senior group leader at the Babraham Institute, said: “Recent scientific advances bring incredible new opportunities to study and understand the earliest stages of human development. To ensure this research remains aligned with society’s values and expectations, we must listen and respond to public desires and concerns. This public dialogue is an important first step and as a scientist I am reassured by the findings but there is still a long way to go to fully understand this complex issue.” 

The report is exceedingly timely, following notable scientific advances in human developmental biology presented at conferences and in leading scientific journals in recent months. As well as generating excitement in scientific fields and with the public, announcement of these breakthroughs also prompted some concerns and criticisms, with the view that these findings raised significant ethical issues. The dialogue provides insight into public considerations following deliberation on early human embryo research. The hope is that it will act as a foundational reference point that others in the sectors can build upon, such as in any future review of the law on embryo research.

Professor Robin Lovell-Badge, co-chair of the HDBI Oversight group, senior group leader and head of the Laboratory of Stem Cell Biology and Developmental Genetics at the Francis Crick Institute, said: “We have learnt a lot about human development before 14 days, but there are areas of investigation that could change how we understand development, and associated diseases, that lie beyond our current window of knowledge. Despite low awareness of current laws, members of the public quickly recognised many of the critical issues researchers are keenly aware of when it comes to growing embryos beyond the current limit. This dialogue also reinforced the fact that the public are in support of research that will yield better health outcomes, and in this case, increase the success of IVF procedures.

Other countries will be looking to the UK to see how we deal with the 14-day rule; we are not there yet with any mandate to make a change, but this does give a strong pointer. The next step will be to delve deeper into some of the topics raised through this dialogue as they apply to specific areas of research, as well as feeding into policy changes.”

The 14-day rule and the regulation of stem cell-based models

When considering the regulation of research involving human embryos, the dialogue explored participant’s views on the 14-day rule. Introduced in 1990, the 14-day rule is a limit enforced by statute in the UK. It applies to early human embryos that are donated by consent to research and embryos that are created for research from donated sperm and eggs. It limits the amount of time early human embryos can be developed in a laboratory for scientific study to 14 days after fertilisation. Due to technical advances, it is now possible to grow embryos in the lab past 14 days, but researchers are not allowed to by the law. If the law changed, it would open up this ‘black box’ of development with researchers able to investigate this crucial time in development from 14-28 days after fertilisation.

Professor Bobbie Farsides, co-chair of the HDBI Oversight group and Professor of Clinical and Biomedical Ethics at the Brighton and Sussex Medical School, said: “It has been a fascinating experience to support HDBI in the undertaking of this exercise.  I commend the participants for the care and mutual respect they have shown throughout. Their engagement and commitment to a subject few of them had previously considered allowed for a wide range of views to be expressed and considered. I hope the scientists involved will be encouraged by the high level of interest in their work, and will want to keep the public conversation going around these important subjects.”

The dialogue included participant discussion on what a change to the 14-day rule might look like, and identified points that should be considered, such as defining what the benefits of extending the rule would be and potential mis-alignment with human embryo research regulations in other countries.

Participants acknowledged the astonishing possibilities of stem cell-based embryo models. The majority of participants would like to see these models further regulated. Work in establishing potential governance mechanisms is already underway. In recognition of the need for additional guidance and regulation in this area, the Cambridge Reproduction initiative launched a project in March 2023 to develop a governance framework for research using stem cell-based embryo models and to promote responsible, transparent and accountable research.

Future steps

A key outcome from the public dialogue is the identification of areas for further exploration, with participants proposing how future national conversations might be shaped. It is hoped that the project acts as a reference base for both widening engagement with the subject and also prompting deeper exploration of areas of concern.

Dr Michael Norman, HDBI Public Dialogue coordinator and Public Engagement Manager at the Babraham Institute, said: “This dialogue shows that people want the public to work closely with scientists and the government to shape both future embryo research legislation and scientific research direction. It is crucial that others in the sector build on these high quality, two-way engagement methodologies that allow for a genuine exchange of views and information to ensure that the public’s desires and concerns are listened to and respected. Transparency and openness around science is vital for public trust and through this we, as a society, can shape UK research in way that enriches the outcomes for all.”

Public Participant (Broad public group, south) said: “I do think that an extension of this public dialogue, and educating a wider society has a benefit in itself. This is really complex and sensitive and the wider you talk about it before decisions are made, the better.”


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Public support for extending the 14-day rule on human embryo research indicated by foundational dialogue project

The findings of a foundational UK public dialogue on human embryo research are published today, Wednesday 25th October 2023, as part of the Wellcome-funded…

Published

on

The findings of a foundational UK public dialogue on human embryo research are published today, Wednesday 25th October 2023, as part of the Wellcome-funded Human Developmental Biology Initiative (HDBI). The HDBI is an ambitious scientific endeavour to advance our understanding of human development. The dialogue project, which was co-funded by UKRI Sciencewise programme, engaged a diverse group of the public to consider how early human embryo research can be used to its fullest, the 14-day rule and the fast-paced field of stem cell-based embryo models.

Credit: Dr Matteo Molè (Babraham Institute)

The findings of a foundational UK public dialogue on human embryo research are published today, Wednesday 25th October 2023, as part of the Wellcome-funded Human Developmental Biology Initiative (HDBI). The HDBI is an ambitious scientific endeavour to advance our understanding of human development. The dialogue project, which was co-funded by UKRI Sciencewise programme, engaged a diverse group of the public to consider how early human embryo research can be used to its fullest, the 14-day rule and the fast-paced field of stem cell-based embryo models.

Headline findings include:

  • Appetite for review of the 14-day rule: Participants recognised that extending the 14-day rule could open up ways to achieve benefits in fertility and health, with participant support for reviewing this, including national discussion.
  • Confidence in regulation: There was a high level of confidence in how human embryo research is regulated, despite a low level of awareness of the regulators and statutes themselves. This included strong desire to see robust regulation governing any changes to the 14-day rule and further regulation for the use of stem cell-based embryo models.
  • Support for improved fertility and health outcomes: The strongest hopes for future human embryo research were where new knowledge would deliver improvements in understanding miscarriage, preventing health conditions such as spina bifida and raising the success rates of IVF procedures.
  • Concerns about genetically engineering humans: The public expressed concerns on the application of developments in this field to genetically alter or engineer humans.

The dialogue engaged a group of 70 people broadly reflective of the UK population in over 15 hours of activities including a series of online and face-to-face workshops with scientists, ethicists, philosophers, policy makers and people with relevant lived experience (such as embryo donors from IVF procedures).

Dr Peter Rugg-Gunn, scientific lead for the HDBI and senior group leader at the Babraham Institute, said: “Recent scientific advances bring incredible new opportunities to study and understand the earliest stages of human development. To ensure this research remains aligned with society’s values and expectations, we must listen and respond to public desires and concerns. This public dialogue is an important first step and as a scientist I am reassured by the findings but there is still a long way to go to fully understand this complex issue.” 

The report is exceedingly timely, following notable scientific advances in human developmental biology presented at conferences and in leading scientific journals in recent months. As well as generating excitement in scientific fields and with the public, announcement of these breakthroughs also prompted some concerns and criticisms, with the view that these findings raised significant ethical issues. The dialogue provides insight into public considerations following deliberation on early human embryo research. The hope is that it will act as a foundational reference point that others in the sectors can build upon, such as in any future review of the law on embryo research.

Professor Robin Lovell-Badge, co-chair of the HDBI Oversight group, senior group leader and head of the Laboratory of Stem Cell Biology and Developmental Genetics at the Francis Crick Institute, said: “We have learnt a lot about human development before 14 days, but there are areas of investigation that could change how we understand development, and associated diseases, that lie beyond our current window of knowledge. Despite low awareness of current laws, members of the public quickly recognised many of the critical issues researchers are keenly aware of when it comes to growing embryos beyond the current limit. This dialogue also reinforced the fact that the public are in support of research that will yield better health outcomes, and in this case, increase the success of IVF procedures.

Other countries will be looking to the UK to see how we deal with the 14-day rule; we are not there yet with any mandate to make a change, but this does give a strong pointer. The next step will be to delve deeper into some of the topics raised through this dialogue as they apply to specific areas of research, as well as feeding into policy changes.”

The 14-day rule and the regulation of stem cell-based models

When considering the regulation of research involving human embryos, the dialogue explored participant’s views on the 14-day rule. Introduced in 1990, the 14-day rule is a limit enforced by statute in the UK. It applies to early human embryos that are donated by consent to research and embryos that are created for research from donated sperm and eggs. It limits the amount of time early human embryos can be developed in a laboratory for scientific study to 14 days after fertilisation. Due to technical advances, it is now possible to grow embryos in the lab past 14 days, but researchers are not allowed to by the law. If the law changed, it would open up this ‘black box’ of development with researchers able to investigate this crucial time in development from 14-28 days after fertilisation.

Professor Bobbie Farsides, co-chair of the HDBI Oversight group and Professor of Clinical and Biomedical Ethics at the Brighton and Sussex Medical School, said: “It has been a fascinating experience to support HDBI in the undertaking of this exercise.  I commend the participants for the care and mutual respect they have shown throughout. Their engagement and commitment to a subject few of them had previously considered allowed for a wide range of views to be expressed and considered. I hope the scientists involved will be encouraged by the high level of interest in their work, and will want to keep the public conversation going around these important subjects.”

The dialogue included participant discussion on what a change to the 14-day rule might look like, and identified points that should be considered, such as defining what the benefits of extending the rule would be and potential mis-alignment with human embryo research regulations in other countries.

Participants acknowledged the astonishing possibilities of stem cell-based embryo models. The majority of participants would like to see these models further regulated. Work in establishing potential governance mechanisms is already underway. In recognition of the need for additional guidance and regulation in this area, the Cambridge Reproduction initiative launched a project in March 2023 to develop a governance framework for research using stem cell-based embryo models and to promote responsible, transparent and accountable research.

Future steps

A key outcome from the public dialogue is the identification of areas for further exploration, with participants proposing how future national conversations might be shaped. It is hoped that the project acts as a reference base for both widening engagement with the subject and also prompting deeper exploration of areas of concern.

Dr Michael Norman, HDBI Public Dialogue coordinator and Public Engagement Manager at the Babraham Institute, said: “This dialogue shows that people want the public to work closely with scientists and the government to shape both future embryo research legislation and scientific research direction. It is crucial that others in the sector build on these high quality, two-way engagement methodologies that allow for a genuine exchange of views and information to ensure that the public’s desires and concerns are listened to and respected. Transparency and openness around science is vital for public trust and through this we, as a society, can shape UK research in way that enriches the outcomes for all.”

Public Participant (Broad public group, south) said: “I do think that an extension of this public dialogue, and educating a wider society has a benefit in itself. This is really complex and sensitive and the wider you talk about it before decisions are made, the better.”


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UC Riverside physicist awarded National Medal of Science

RIVERSIDE, Calif. — Physicist Barry C. Barish, a distinguished professor of physics and astronomy at UC Riverside, was awarded the National Medal…

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RIVERSIDE, Calif. — Physicist Barry C. Barish, a distinguished professor of physics and astronomy at UC Riverside, was awarded the National Medal of Science by President Joe Biden at a ceremony held at the White House today. Established in 1959 by the U.S. Congress, the National Medal of Science is the highest recognition the nation can bestow on scientists and engineers.

Credit: Stan Lim, UC Riverside.

RIVERSIDE, Calif. — Physicist Barry C. Barish, a distinguished professor of physics and astronomy at UC Riverside, was awarded the National Medal of Science by President Joe Biden at a ceremony held at the White House today. Established in 1959 by the U.S. Congress, the National Medal of Science is the highest recognition the nation can bestow on scientists and engineers.

The President’s National Medal of Science is given to individuals “deserving of special recognition by reason of their outstanding contributions in biology, computer sciences, education sciences, engineering, geosciences, mathematical and physical sciences, and social, behavioral, and economic sciences, in service to the Nation.” It is administered by National Science Foundation.

Barish was recognized for “exemplary service to science, including groundbreaking research on sub-atomic particles. His leadership of the Laser Interferometer Gravitational-Wave Observatory led to the first detection of gravitational waves from merging black holes, confirming a key part of Einstein’s Theory of Relativity. He has broadened our understanding of the universe and our Nation’s sense of wonder and discovery.”

“UCR congratulates Prof. Barish on receiving the National Medal of Science,” said UCR Chancellor Kim A. Wilcox. “The distinguished names of previous winners make this recognition very exceptional. Prof. Barish is a strong inspiration for our students, researchers, and faculty. UCR continues to benefit from his extraordinary achievements.”

Barish won the 2017 Nobel Prize in physics for the discovery of gravitational waves. He joined the UCR faculty in 2018. He earned his bachelor’s degree in physics in 1957 and his doctorate in experimental particle physics in 1962, both from from UC Berkeley. He joined Caltech as a postdoc in 1963, became a professor in 1966, and was appointed Linde Professor of Physics in 1991. He led the Laser Interferometer Gravitational-wave Observatory, or LIGO, effort from its inception through the final design stages, and in subsequent discoveries. In 1997, he created the LIGO Scientific Collaboration, which enables more than 1,000 collaborators worldwide to participate in LIGO.

Barish has served on many committees, including co-chairing the subpanel of the High Energy Physics Advisory Panel that developed a long-range plan for U.S. high-energy physics in 2001. He chaired the Commission of Particles and Fields and the U.S. Liaison Committee to the International Union of Pure and Applied Physics.

He is the recipient of the Fudan-Zhongzhi Science Award (China), Princess of Asturias Prize for Science and Technology (Spain), Giuseppe and Vanna Cocconi Prize from the European Physical Society, the Enrico Fermi Prize from the Italian Physical Society, and the Klopsteg Award from the American Association of Physics Teachers. He is a member of the National Academy of Sciences, which awarded him the Henry Draper Medal. From 2003 to 2010, he served as a presidential appointee to the National Science Board.

He is an elected member of the American Academy of Arts and Sciences and a fellow of both the American Association for the Advancement of Science and of the American Physical Society, where he also served as president. He has received honorary doctorates from the University of Bologna, University of Florida, University of Glasgow, and Universitat de València in Spain. He has been inducted as honorary academician into the Royal Academy of European Doctors, based in Spain. He was elected a foreign member of the Royal Society in 2019. Last year, he won the Copernicus Prize, bestowed by the government of Poland. Earlier this year, he was elected a corresponding member of the Royal Academy of Sciences and Arts of Barcelona. 

The University of California, Riverside is a doctoral research university, a living laboratory for groundbreaking exploration of issues critical to Inland Southern California, the state and communities around the world. Reflecting California’s diverse culture, UCR’s enrollment is more than 26,000 students. The campus opened a medical school in 2013 and has reached the heart of the Coachella Valley by way of the UCR Palm Desert Center. The campus has an annual impact of more than $2.7 billion on the U.S. economy. To learn more, visit www.ucr.edu.


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