Territorial Approach to FSN Policies Territorial Approach to FSN Policies Vito Cistulli – Stefano Marta TCI Investment Days 15 December 2014 – Rome

Structure 1.What is not Territorial Approach 2.What is Territorial Approach: main principles 3.Why territorial approach in FAO 4.How can Territorial Approach support better investment policies 5.Examples: Al Ghab (Syria), Oman

What is Not Territorial Approach Not synonymous with – Local development – Community development – Rural development – Integrated rural development But can be applied to all of them as well as to other areas such as urban areas, industrial areas, etc.

What is Territorial Approach (TA): Main Principles Place-Based Policies Theoretical foundations NEG + Institutional and Evolutionary Economic Geography + Endogenous Growth Theory Policy ObjectivePrimarily efficiency, with equity concerns Agglomeration for economies of scale Yes (but also the potential cons – backwash effects – have to be considered) Environmental concernsTo be mainstreamed in public policy Social concernsTo be mainstreamed in public policy Territorial targeted policiesNeeded to address market failures InstitutionsFormal + Informal History and development processesDevelopment processes are highly heterogeneous MigrationEconomic, social and political costs Pathways to Economic Development Multiple possible pathways and multiple spatial arrangements Approach to DevelopmentAll regions have a development potential Inter-regional Convergence May result from a more efficient use of local potential in peripheral areas Decision makingBottom-up (within a multi-level governance system)

Moreover TA recognizes the interlinkages of all the dimensions of sustainable development: social, economic, environmental, institutional. One perspective is not enough TA takes into consideration tensions and trade offs between – the dimensions – the actors – the policy choices – the local preferences and national priorities (i.e., infrastructures) Hence the 4I model based on four prerequisites: – Information: transparency – Inclusion: participation, ownership, cohesion – Innovation: technological, social processes – Institutions and governance: accountability

Why Territorial Approach in FAO 1.Exclusive growth: most excluded living in rural areas 2.Strong correlation between poverty and rural population 3.and between inequality and agricultural employment 4.FAO has gradually shifted from sectoral priorities to multi-dimensional priorities (food security & nutrition, rural poverty reduction) 5.In developing countries poverty = hunger = inequality = rural areas 6.Rural areas are therefore at greatest risk and require special attention

The policy response and the role of territorial approach Need to CONNECT People, Places and Markets  People: more inclusive policy making processes and redistributive policies  Places: recognize the diversity of local socio-economic dynamics and understand opportunities that would be missed with one-size-fits-all policies  Markets: diversification and integration Hence Investments in local Markets + infrastructures + institutions + transfers

How this approach can support investments Tailored to real local needs and “endogenous” opportunities and challenges – higher returns – increased environmental sustainability (if standards are well defined and enforced) – increased climate resilience for livelihoods as investments tailored to local climate conditions – increased resilience of local livelihoods if appropriate mix of investments in markets, infrastructures, institutions, transfers Targeted as opposed to “across the board” expensive investments i.e., sectors where a territory has a comparative advantage, education, etc.) – budget savings Inclusive as opposed to exclusive – higher probability to trigger private investments (should not forget that rural households are by far the most important investors in the rural areas) – ownership and accountability – private/public partnerships – hence long term resilience of local livelihoods

Examples of Application Al Ghab (Syria) Oman

Example: Al-Ghab Rural Development (1/3) Objective: resolve the paradox of a resource rich area with a poor and food insecure population Analysis of root causes with a territorial approach (Chart below) Main drivers of food insecurity: Education, Labour Market Efficiency, Sectoral Diversification The investment plan was identified and designed in a way to be aligned to the above mentioned drivers.

Example: Al-Ghab Rural Development (2/3) Labour market efficiency: preparation of a Legal Framework for a Special Economic Zone in Al Ghab Education and institutional development: Capacity Building ( ): incubators, vocational training, strengthening of local institutions, establishment of a AL Ghab Development Agency Sectoral diversification: agriculture remains the engine of growth of the region but its development is triggered by investments in other sectors

Example: Al-Ghab Rural Development (3/3)

The Territorial Capital Index of Oman TERRITORIAL ASSETSVARIABLE SOCIAL CONDITIONS Poverty: less than 300 RO - HH Income Food Cash Expenditure (%) Economic Dependency Ratio (Av. per cons. unit) Recipients of social welfare/population Gini Index INFRASTRUCTURE Source of drinking water (con. network, public + private) Telephone lines/pop Road Lengths Main Source of Water Supply (Non - Drinking) Networks p+p HUMAN CAPITAL Gender ratio (male/female) for public school student Teacher student ratio Average study years per adults HEALTH Low Birth Weight (% of Children registered ) Anemia (at 9 months) Diarrhea among Children below 5 Years (Rate/1000 children) Malaria Case (% of Plasmodium) MOH Hospital Death Rate (Infectious and Parasitic Diseases) Life Expectancy at Birth (in Years) Under-five Mortality Rate (for 1000 living births) WEALTH GDP per capita Average monthly Household income % of rural income in Gov. LABOUR MARKET Civil service employment Private sector employment DEMOGRAPHY Foreign pop. (%) Population density Average Household Size PRODUCTIVE CAPITAL N. Registered Bus. Ent. with Less Than 50 Empl/pop (*100000) N. of firms / Pop. Less than 50,000 RO (*100000) N. of firms / Pop. More than 1000,000 RO (*100000) Added value of firms/pop ENVIRONMENT Exposure to environmental problems

Example: Oman SARD Strategy 2040 Only three regions have a Territorial Capital Index (TCI) above the national average: Muscat, Al-Batinah (N and S) and Al-Dakhliyah.

Example Oman: The Agricultural Potential Index Only in Dhofar and Al-Batinah improvements in agriculture have the potential to yield significant changes to trigger a dynamism that will be able to percolate to other sectors

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