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Focus on GDP Fuelling Inequality and Short-Termism

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Decades of prioritizing economic growth over social equity has led to historically high levels of wealth and income inequality and caused governments to miss out on a virtuous circle in which growth is strengthened by being shared more widely and generated without unduly straining the environment or burdening future generations. These are the findings from the World Economic Forum’s Inclusive Development Index 2018, which is released today.

Excessive reliance by economists and policy-makers on gross domestic product as the primary metric of national economic performance is part of the problem, since GDP measures current production of goods and services rather than the extent to which it contributes to broad socio-economic progress as manifested in median household income, employment opportunity, economic security and quality of life.

The Inclusive Development Index is an annual assessment that measures how 103 countries perform on 11 dimensions of economic progress in addition to GDP. It has three pillars: growth and development; inclusion; and intergenerational equity – sustainable stewardship of natural and financial resources.

According to this year’s index, over the past five years, the 29 advanced economies included in the study have on average flatlined in terms of inclusion, which is measured by median household income, poverty, and wealth and income inequality, despite boosting their Growth and Development score by over 3%. The four indicators that make up the index’s Growth and Development pillar are: GDP per capita; labour productivity; employment; and healthy life expectancy.

Over the same period, only 12 of the 29 advanced economies were successful in reducing poverty and only eight saw a decrease in income inequality.

More worrying still: rich and poor countries alike are struggling to protect future generations. The index’s Intergenerational Equity and Sustainability pillar – which takes into account public debt; carbon intensity of GDP; dependency ratio and adjusted net savings (which measures savings in an economy after investments in human capital, depletion of natural resources and the cost of pollution) – actually deteriorated in upper-, middle- and low-income economies since 2012 and improved only marginally (0.6%) in advanced economies.

Top performing countries

According to the index, the most inclusive advanced economy in the world in 2018 is Norway. The Nordic nation ranks second overall for intergenerational equity and third for the two other pillars of the index: Growth and Development, and Inclusion. Small European economies dominate the top of the index, with Australia (9) the only non-European economy in the top 10.

Of the G7 economies, Germany (12) ranks the highest. It is followed by Canada (17), France (18), the United Kingdom (21), the United States (23), Japan (24) and Italy (27). In many countries, there is a stark difference between individual pillars. For example, the US ranks 10 out of 29 for Growth and Development; however, it ranks 28 on Inclusion and 26 on Intergenerational Equity. France, on the other hand, fares less well on Growth and Development (21 out of 29); however, it ranks 12 for Inclusion. Its low ranking on Intergenerational Equity (24) suggests it may be storing up problems for the future.

Six emerging European economies are located in the top 10 spots in the emerging economies’ ranking: Lithuania (1), Hungary (2), Latvia (4), Poland (5), Croatia (7) and Romania (10). These countries perform well on Growth and Development, benefiting from EU membership, as well as on inclusion indicators, as median living standards rose and wealth inequality declined significantly. Latin America also performs well, with three countries featured in the top 10: Panama (6), Uruguay (8) and Chile (9).

Performance is mixed among BRICS economies, with the Russian Federation ranking 19th, followed by China (26), Brazil (37), India (62) and South Africa (69). Although China ranks first among emerging economies in GDP per capita growth (6.8%) and labour productivity growth (6.7%) since 2012, its overall score is brought down by lacklustre performance on Inclusion. Other emerging countries such as Mexico (24), Indonesia (36), Turkey (16) and the Philippines (38) show more potential on Intergenerational Equity and Sustainability but lack progress on Inclusion indicators such as income and wealth inequality.

Key findings and policy implications

IDI data suggest that relatively strong GDP growth cannot be relied upon by itself to generate inclusive socio-economic progress and rising median living standards. All but three advanced countries have experienced GDP growth over the last five years, but only 10 of 29 have registered clear progress in the IDI’s Inclusion pillar. A majority, 16 of 29, have seen Inclusion deteriorate, and the remaining three have remained stable. A majority of those countries with the best GDP growth performance failed to improve on Inclusion. This pattern is repeated in the relationship between GDP growth and performance on Intergenerational Equity and Sustainability with 11 of 29 showing clear progress and 18 of 29 deteriorating.

Emerging -country data show a similar disconnect between GDP growth and Inclusion. Of the 30 emerging economies with the highest GDP per capita growth over the past five years, only six have scored similarly well on a majority of the Inclusion indicators, while 13 have been no better than mediocre and 11 have registered outright poor performance. With respect to Intergenerational Equity, only eight have scored similarly well on a majority of the Intergenerational Equity and Sustainability indicators, while 12 have been no better than mediocre and 10 have registered outright poor performance.

This evidence suggests that GDP growth is a necessary but not sufficient condition for achievement of the broad-based progress in living standards by which most people judge countries’ economic success. This message is particularly relevant at a time when global economic growth is returning to a more robust level and policy-makers could do more to future-proof their economies and make them more equitable. Political and business leaders should not expect higher growth to be a panacea for the social frustrations, including those of younger generations who have shaken the politics of many countries in recent years.

“Economic growth as measured by GDP is best understood as a top-line measure of national economic performance. Broad, sustainable progress in living standards is the bottom-line result societies expect. Policy-makers need a new dashboard focused more specifically on this purpose. It could help them to pay greater attention to structural and institutional aspects of economic policy that are important for diffusing prosperity and opportunity and making sure these are preserved for younger and future generations,” said Richard Samans, Managing Director and Head of Global Agenda at the World Economic Forum.

About the Inclusive Development Index

The IDI is a project of the World Economic Forum’s System Initiative on Shaping the Future of Economic Progress, which aims to inform and enable sustained and inclusive economic progress through deepened public-private cooperation, thought leadership and analysis, strategic dialogue and concrete cooperation, including by accelerating social impact through corporate action.

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Eurasian Research on Modern China-Eurasia Conference

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October 26-27, 2018,National Academy of Sciences, Armenia.

Address: Marshal Bagramyan 24, Yerevan, Armenia.

Organizers:“China-Eurasia” Council for Political and Strategic Research, Foundation, Armenia,Institute of Oriental Studies,National Academy of Sciences, Armeniaand Department of Oriental Studies, ISEC, National Academy of Sciences, Armenia.

Supported by:“Transport Project Implementation Organization” SNCO,Armenia,“Diplomatic Foundation of Armenia” and “Modern Diplomacy”, Greece.

Table of Contents

(English Language Panels)

  • Panel 1։ China and Eurasian Economics
  • Panel 2։China’s One Belt, One Road and the World
  • Panel 3։ China and One Belt One Road Initiative
  • Panel 4։ China, Eurasia and Politics
  • Panel 5: The History of Interaction between China and Eurasia
  • Panel 6։ China and the South Caucasus
  • Panel 7:China and Eurasia (International Relations)

October 26, 2018

Welcome Address (11:00-11:30)

Panel 1: (English Language). China and Eurasian Economics(11:45-13:40)

Ma Bin, (Fudan University, China), “Railway Express between China and EU:New Model of International Transportation or Traditional tool of Economic Growth?”.

Connor Judge (SOAS, University of London, Great Britain), “Competing Narratives for Chinese Investment: Serbia and Mongolia”.

Srdjan Uljevic, (American University of Central Asia, Kyrgyz Republic),

“India’s Foreign Policy in the Age of China’s Dominance in Asia”.

Arjun Chapagain, June Wang, Linda Che-lan Li, (City University of Hong, China),

“The Trans-Himalayan Trade of Medicinal and Aromatic Plants: AGeo-Historical Political Lens”.

Anna Zalinyan, (Armenia), “Peculiaritiesbetween China and European Countries on Public Administration Reforms”.

Key note Speech 13:40-14:00

Zachary Paikin (University of Kent, Great Britain, Senior Editor at Global Brief Magazine)

“The Future of Liberal Order: Russia-China Relations and Eurasian Consequences”.

October 26, 2018 (11:50-12:30)

Panel 2: (Russian Language) China’s One Belt, One Road and the World-Панель 2 Китайская инициативаОдин пояс, один путь и мир

AnatolyTsvyk, (RUDN University, Russia),

“The EU and OBOR: Mutual Benefit or Competition?” / ЦвыкАнатолий. (Российский университет дружбы народов, Россия).«Европейский союз и инициатива «Один пояс, один путь»: взаимная выгода или конкуренция?».

Konstantin Tasits,(Russian Institute for Strategic Studies, Russia),

“Sino-Georgian Economic Relations in Modern Era”. Тасиц Константин. (Российский институт стратегических исследований Россия).  «Экономические отношения Грузии и Китая на современном этапе».

Coffee/Pastries (14:00-14:30)

October 26, 2018

Panel 3։ (English Language) China and One Belt One Road Initiative (14:30-17:00)

Jukka Aukia, (University of Turku, Finland),

“Belt and Road: the Baltic States within the 16+1”.

Uzma Siraj,(Federal Urdu University Islamabad, Pakistan),

“Eastern Europe Between Constraints, Coercion, and Opportunities: BRI and China Challenging Russia and EU in their Backyard”.

Mher Sahakyan, (“China-Eurasia” Council for Political and Strategic Research, Armenia).

“China’s One Belt, One Road Initiative and Armenia”.

Ma Xiaoyun, (Party School of CPC Tongling Municipal Committee, China),

“OBOR and China’s Midland Open Economy Development-A Case Study on Anhui”.

Gabriel de Rezende Piccinini, Alena Vysotskaya Guedes Vieira(University of Minho, Portugal),

“The Eurasian Economic Union and the One Belt, One Road Initiative: how Brazil and the European Union See It”.

Clayton HazvineiVhumbunu, (University of KwaZulu-Natal, Republic of South Africa).

“The Economic Impact of China’s One Belt, One Road Initiative on Eurasia”.

Ani Hakhverdyan (Russian-Armenian University, Armenia), “The Energy Silk Road”.

October 26 (17:20) ****Drinks and Pizza (Reception).

October 27

Panel 4։ (English Language) China, Eurasia and Politics(10:00-12:20)

Anahit Parzyan, (“China-Eurasia” Council for Political and Strategic Research, Foundation, Armenia), “Some aspects of Digitalization of China”.

Maximilian Ohle, (Nankai University), Richard J. Cook, (Nankai University), Zhaoying Han, (Nankai University China, the Editor-in-Chief of the Nankai Journal),

“China’s Engagement with Kazakhstan and Russia’s Zugzwang: Why is Astana Incurring Regional Power Hedging?”

Izabella Muradyan, (Chinese Centre Culture and Science, Armenia),

“Geo-Economic Cooperation with China under One Belt, One Road Initiative: Armenian Keys from EAEU”.

Luiza Grigoryan, (European University in Armenia),

“China and the Brics”.

October 27, 2018 (10:00-11:20)

Panel 5: (Russian Language) The History of Interaction between China and Eurasia-Панель 5. Историясношения (Китай-Евразия)

Sergey Kozlovsky, (The Ivan Franko National University of Lviv, Ukraine), “The Theory and genesis of Pax Sinica”/КозловскийСергей. (Львовский национальный университет имени Ивана ФранкоУкраина). «Теория фронтира и генезис PaxSinicia».

KhusnutdinovaLiailia, (Ufa State Petroleum Technological University, Russia), “On Historical Aspect of Chinese nation in Republic of Bashkortostan”. /ХуснутдиноваЛяйля. (Уфимский государственный нефтяной технический университет. Россия).«К проблеме истории Китайского народа в Республике Башкортостан».

Coffee/Pastries (12:30-13:00)

Panel 6: (English Language)China and South Caucasus (13:10-14:30)

Vakhtang Charaia,(Ivane Javakhishvili Tbilisi State University, Georgia),

“Trade and Investment between South Caucasus, China and EU”.

Gabriela Radu, (Strategic Analyst,Romania),

“Foreign Direct Investment Trends in the Southern Caucasus”.

Saren Abgaryan. (Shanghai Jiao Tong University, China),

“China-Armenia Bilateral Investment Treaty (BIT) in the Context of Chinese Evolving BIT Practice and Jurisprudence”.

October 27 (11:20-12:30)

Панель 7. (Russian Language)КитайиЕвразия (Внешняяполитика)- China and Eurasia (International Relations)

Andranik Hovhannisyan, (Russian-Armenian University, Armenia), “The Pivot towards Asia: Perspectives of Formation of Asian NATO”. /ОваннисянАндраник(Российско-Армянскийуниверситет, Армения).«ПовороткАзии: перспективыформирования «АзиатскогоНАТО»».

OganesyanArusyak, (RUDN University, Russia), “The Role of Eastern Asia in China’s Foreign Policy”. /ОганесянАрусяк.(Российский университет дружбы народов, Россия).«Роль Восточной Азии в современной китайской внешней политике».

KhubrikovaBadma, (BuryatStateUniversity, Russia), “SoftPowerintheEraofXiJinping”. /ХубриковБадма, Бурятскийгосударственныйуниверситет.

«Мягкая сила» в эпоху Си Цзиньпина».

October 27 (15:00) ****Drinks and Pizza (Reception).

National Academy of Sciencesis in the Center of the city, in the front of National Assembly of Armenia.Address: Marshal Bagramyan 24, Yerevan, Armenia.

Nearest Subway station is “Marshal Bagramyan”.

Working languages in different panels are English or Russian.

All audience members are required to register for the conference. Please contact info@chinastan.org

Conference Facebook Page:

https://www.facebook.com/ChinaEurasiacouncil/ and

https://www.facebook.com/DiscoverChinastan/

Conference Website:

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A new bioeconomy strategy for a sustainable Europe

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European Commission has put forward an action plan to develop a sustainable and circular bioeconomy that serves Europe’s society, environment and economy.

As announced by President Juncker and First Vice-President Timmermans in their letter of intent accompanying President Juncker’s 2018 State of the Union Address, the new bioeconomy strategy is part of the Commission’s drive to boost jobs, growth and investment in the EU. It aims to improve and scale up the sustainable use of renewable resources to address global and local challenges such as climate change and sustainable development.

In a world of finite biological resources and ecosystems, an innovation effort is needed to feed people, and provide them with clean water and energy. The bioeconomy can turn algae into fuel, recycle plastic, convert waste into new furniture or clothing or transform industrial by-products into bio-based fertilisers. It has the potential to generate 1 million new green jobs by 2030.

Vice-President for Jobs, Growth, Investment and Competitiveness Jyrki Katainen said: “It has become evident that we need to make a systemic change in the way we produce, consume and discard goods. By developing our bioeconomy – the renewable segment of the circular economy – we can find new and innovative ways of providing food, products and energy, without exhausting our planet’s limited biological resources. Moreover, rethinking our economy and modernising our production models is not just about our environment and climate. There is also great potential here for new green jobs, particularly in rural and coastal areas.”

Commissioner for Research, Science and Innovation, Carlos Moedas, added: “The EU aims to lead the way in turning waste, residue and discards into high value products, green chemicals, feed and textiles. Research and innovation plays a key role in accelerating the green transition of the European economy and in meeting the United Nations Sustainable Development Goals.”

Delivering a sustainable circular bioeconomy requires a concerted effort by public authorities and industry. To drive this collective effort, and based on three key objectives, the Commission will launch 14 concrete measures in 2019, including:

Scaling up and strengthening the bio-based sectors:

To unleash the potential of the bioeconomy to modernise the European economy and industries for long-term, sustainable prosperity, the Commission will:

  • establish a €100 million Circular Bioeconomy Thematic Investment Platform to bring bio-based innovations closer to the market and de-risk private investments in sustainable solutions;
  • facilitate the development of new sustainable bio-refineries across Europe.

Rapidly deploying bioeconomies across Europe:

Member States and regions, particularly in Central and Eastern Europe, have a large underused biomass and waste potential. To address this, the Commission will:

  • develop a strategic deployment agenda for sustainable food and farming systems, forestry and bio-based products;
  • set up an EU Bioeconomy Policy Support Facility for EU countries under Horizon 2020 to develop national and regional bioeconomy agendas;
  • launch pilot actions for the development of bioeconomies in rural, coastal and urban areas, for example on waste management or carbon farming.

Protecting the ecosystem and understanding the ecological limitations of the bioeconomy

Our ecosystem is faced with severe threats and challenges, such as a growing population, climate change and land degradation. In order to tackle these challenges, the Commission will:

  • implement an EU-wide monitoring system to track progress towards a sustainable and circular bioeconomy;
  • enhance our knowledge base and understanding of specific bioeconomy areas by gathering data and ensuring better access to it through the Knowledge Centre for the Bioeconomy;
  • provide guidance and promote good practices on how to operate in the bioeconomy within safe ecological limits.

The Commission is hosting a conference on 22 October in Brussels to discuss the action plan with stakeholders and highlight tangible bio-based products.

Background

In their letter of intent to the Presidencies of the European Council and Parliament, President Juncker and First Vice-President Timmermans announced this Communication as part of the Commission’s priority to boost jobs, growth and investment in the EU. It is an update to the 2012 Bioeconomy Strategy.

The bioeconomy covers all sectors and systems that rely on biological resources. It is one of the EU’s largest and most important sectors encompassing agriculture, forestry, fisheries, food, bio-energy and bio-based products with an annual turnover of around €2 trillion and around 18 million people employed. It is also a key area for boosting growth in rural and coastal areas.

The EU already funds research, demonstration and deployment of sustainable, inclusive and circular bio-based solutions, including with €3.85 billion allocated under the current EU funding programme Horizon 2020. For 2021-2027, the Commission has proposed to allocate €10 billion under Horizon Europe for food and natural resources, including the bioeconomy.

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UN resolution paves way for mass use of driverless cars

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A resolution to ensure the safe use of automated vehicles was passed at the UN Economic Commission for Europe (UNECE) Global Forum on Road Traffic Safety in Geneva, on Wednesday.

In a statement, the UNECE said that automated vehicles have the potential to create safer, more efficient and environmentally friendly transport, which could reshape entire sectors of the economy and improve the lives of millions of people, notably those unable to drive or with limited access to mobility.

However, there are still many questions relating to areas such as road safety standards, traffic rules, insurance regimes, cybersecurity and data protection, which must still be addressed before the mass introduction of driverless cars to the market.

The resolution offers recommendations to ensure the safe interaction between automated vehicles, and road users, and stress the key role that people need to play, whether as responsible drivers, occupants or on the road in general.

These include making road safety a priority, safely interacting with the surrounding traffic environment and safely tolerating user error.

The resolution also recommends that the high-tech cars should be able to communicate with their users and other road users, in a clear, effective and consistent way, react to unforeseen situations, and enable their deactivation in a safe manner.

“With this resolution, we are paving the way for the safe mobility of the future, for the benefit of all road users” said UNECE official Luciana Iorio.

In September, a UNECE automated/autonomous and connected vehicles working group met for the first time in Geneva, to begin addressing issues such as technical requirements, cyber security and software updates, and innovative testing methods.

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