1.In the wake of the devastating COVID-19 pandemic and amid global macroeconomic uncertainties, including the spillover effects of the war in Ukraine, inflationary pressures and the climate crisis, adequate, equitable and efficient social spending is more important now than ever.

2.Fiscal policy aimed at reducing poverty and inequality can both spur growth and accelerate social justice and human wellbeing.

SEM helps to optimize links between expenditure choices and macroeconomic objectives, provides a basis for better statistics, and strengthens advocacy for much-needed fiscal policy reforms.

3.The Social Expenditure Monitor (SEM) presents a new framework for measuring social expenditures in the following seven dimensions by capturing critical social development priorities aligned with the SDGs: education; health and nutrition; housing, connectivity and community amenities; labour market interventions and employment generation; social protection, subsidies, and support to farms; arts, culture and sports; and environmental protection.

4.Arab countries face difficult questions around the fiscal sustainability of enhanced social expenditures. The present report stresses that “enhancing” means not just spending more but spending smarter.