EESC’s Opinion on GDP and beyond Reply

The European Economic and Social Committee (EESC) has recently produced an own-initiative Opinion document on “GDP and beyond – the involvement of civil society in choosing complementary indicators.”

The document reports that the EESC recognizes the advances made in recent years in devising complementary indicators to Gross Domestic Product (GDP), at both world and European levels. However, it is stressed that, in the view of the EESC, the process leading to a new definition of well-being and progress of societies – beyond economic growth alone – cannot be separated from current European policies to tackle the renewed impact of the economic and financial crisis. At present, there is a wide gap between economic policies and policies for well-being and societal progress at both national and European level, but the authors see a possibility of narrowing this gap in connection with the adoption of indicators complementary to GDP by official statistical services.

The EESC proposes that there needs to be a thorough debate on the fundamental meaning of progress and the concept of development, and any decisions have to be based on contributions from the civil society. The Committee also emphasizes its willingness to act as a meeting place between organized civil society and official European bodies as part of a participatory decision-making process to identify and design indicators of progress for  the European Union.

Links: http://www.eesc.europa.eu/?i=portal.en.eco-opinions.15671

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Government of Canada is “re-defining progress” Reply

Policy Horizons Canada, a think-tank within the Government of Canada,  published a report at the end of 2011 entitled “Re-defining progress: The well-being objective.” The report documents the rise of the “well-being movement”  – that is, questioning the current practice of measuring progress in purely economic terms and shifting the focus towards well-being – and the forces that could move well-being onto the Canadian Policy Agenda by 2025. Beyond the international forces, the report identifies seven specific pressures internal to Canada, ranging from aging population to equity. The report also discusses the “well-being approach” and Canada-specific future  in a form of open questions focusing on topics such as GDP, metrics of well-being, globalization, resource constraints, etc.

Link: Re-defining progress: The well-being objective

Global Transition 2012: International initiative on ‘New Economy’ Reply

The Global Transition 2012 is an international network of organisations and leading thinkers striving for “an alternative global green economy that maximises well-being, operates within environmental limits  and is capable of coping and adapting to global environmental change.” The initiative has been introduced and supported by the Stakeholder Forum for a Sustainable Future, the new economics foundation (nef) and the New Economics Institute, with partnership with other organisations such as the Green Economy Coalition and BioRegional. The current focus of the initiative is to “grow the network of organisations from now, in the lead up to Rio+20 [United Nations Conference on Sustainable Development, 2012] and beyond.”

On their website, The Global Transition 2012 initiative publishes short blog articles from leading thinkers, information on events related to the Rio+20 conference, as well as series of ‘Challenge Papers’ on key topic areas covering: The Green Economy, Beyond GDP, Global Inequality, One Planet Living, The Blue Economy, Energy Resources and Services, Food Security, Managing Natural Capital, Global Finance and Banking, Green Jobs and Skills, and Trade.

‘The Gren Economy’ paper by nef urges that “we must devise and manage a rapid economic transition.” The authors propose that new economic models maximising human well-being, but at the same time working within the Earth’s environmental boundaries, need to be implemented. The paper “puts forward 6 challenges to lay the foundations for [the needed] systemic change: 1. Develop a national transition plan that puts countries on paths to operate within planetary boundaries, and on timescales sufficiently quick to preserve key, ecological life support functions; 2. Don’t start from a growth perspective; 3. Agree to develop and implement new measures of economic success; 4. Commit to reduce income and wealth inequalities between and within nations; 5. Put fiscal policy and public expenditure centre stage in managing economic transition; and 6. Recapture the financial sector for the public good.”

‘The Beyond GDP: Measuring Our Progress’ paper co-authored by nef, Global Footprint Network and National Secretary for Planning and Development, Ecuador, then focusses on ways of measuring environmental sustainability and well-being. The authors “call for governments around the world to: 1. Amend their national accounting systems to align what they measure with what really matters; and 2. Use those measures as a guide for policy and political action.”

In connection with the Global Transition 2012, the initiative has also developed ‘The Global Transition to a New Economy’ project. The key of this project is an interactive map of already existing projects and initiatives that can be put under the umbrella of ‘New Economy’.

Links: http://globaltransition2012.org/, http://www.gtne.org/

Harvard Business Review Jan 2012 issue on “The Happiness Factor” Reply

Harvard Business Review featured a series of articles on happiness, wellbeing and economics in its January 2012 issue, under the overall title “The Happiness Factor.” The articles within touched on the following topics: ‘The Economics of Well-Being’, ‘The Science Behind the Smile’, ‘Creating Sustainable Performance’, ‘Positive Intelligence’, and ‘The History of Happiness’. While the overall focus of the issue, based on the cover, appeared to be on improved company performance (thanks to happy employees), the articles inside gave a rather good and balanced overview of the bigger picture of New Economic thinking. (Requires purchase to view the whole issue, or consult your nearest library)

Link: http://hbr.org/archive-toc/BR1201

The quality of GDP in Chinese provinces does not correlate with GDP ‘quantity’ Reply

The Beijing-based China Economy Research Institute, a think-tank of China Economic Weekly under People’s Daily News Group, recently published the “2011 Gross Domestic Product (GDP) Quality Rankings.” The rankings have been published annually since 2009, so the current 2011 report is the third of its kind. The 2011 rankings lists the Chinese mainland’s 31 provincial-level regions based on their per capita GDP quality, or residents’ income happiness index (the ratio between per capita disposable income and per capita GDP, calculated as of Feb 22, 2012).

The website China.org.cn, an authorized news portal site established by the Chinese government, reports on the fact that “statistics show that regions with a greater GDP aggregate were not necessarily ranked high in GDP quality. Instead, some of them even came in near the bottom. In 2011, the top five regions with the highest GDP were Guangdong at 5.3 trillion yuan (US$820.59 billion), Jiangsu at 4.86 trillion yuan (US$752.46 billion), Shandong at 4.54 trillion yuan (US$702.92 billion), Zhejiang at 3.2 trillion yuan (US$495.45 billion) and Henan at 2.7 trillion yuan (US$418.03 billion). However, in terms of GDP quality, Guangdong came in third, Jiangsu 21st, Shandong 25th, Zhejiang fourth, and Henan 24th. Most notably, Guizhou Province, a mountainous region in southwestern China, took the fifth spot in 2011 though its GDP of 0.56 trillion yuan (US$86.7 billion) was ranked only 26th near the bottom.”

These findings show that, in Chinese provinces, the quality of GDP does not correlate with GDP ‘quantity‘. This is an issue that China’s economic experts have started to highlight in recent years. As China.org.cn puts it: “In recent years, China’s economic experts have pointed out that GDP should not be worshipped blindly. It’s more vital to consider its contributions to the improvement to people’s income, livelihood and sense of happiness.”

Beyond GDP (EU 2007 conference website) Reply

This is the principal website of the European Union’s project/conference on developing indicators that are “as clear and appealing as GDP, but more inclusive of environmental and social aspects of progress.” The initial conference — held in 2007 and co-sponsored by the European Commission, European Parliament, Club of Rome, OECD and WWF — was a landmark that helped pave the way for much that came later. However, the website seems to have been stopped being updated in Oct 2011. This legacy site contains info on indicators (GDP, Enlarged GDP, Social indicators, Environmental indicators, Wellbeing), relevant news [until Oct 2011], resource documents, the documentation of the conference, and many good links to other initiatives/organisations etc.

Link: http://www.beyond-gdp.eu/index.html