New Zealand’s economy has stabilised, with solid growth supporting well-being through jobs and incomes. Ongoing implementation of the government’s new well-being approach to policymaking will offer further opportunities to create a more sustainable and inclusive economy for all New Zealanders, according to a new report from the OECD.
The latest OECD Economic Survey of New Zealand discusses the challenges of maintaining sound growth and improving well-being for all. The Survey projects growth of about 2.5% this year and next, against a backdrop of expansionary monetary policy, healthy public finances and tight labour markets.
The Survey, presented in Wellington by OECD Deputy Secretary-General Ulrik Vestergaard Knudsen and New Zealand Finance Minister Grant Robertson, discusses the need to boost productivity growth, address soaring housing prices and better integrate migrants into the labour market.
“Life is good for most New Zealanders, with high employment, an exceptional natural environment and strong levels of social support and trust,” Mr Vestergaard Knudsen said. “But not everyone enjoys the same levels of well-being, with gaps in health, education, employment, and income. The challenge going forward will be to continue improving well-being through building a more productive, sustainable and inclusive economy.”
New Zealand’s 2019 Budget used well-being evidence to set priorities, choose among different policy options and foster greater collaboration among agencies. Steps should now be taken to integrate well-being into other policy advice and tools, such as regulatory impact assessment and evaluation. Embedding the well-being approach further holds the promise of making policy advice and implementation more effective, through better targeted actions, a deeper understanding of trade-offs and more coordinated cross-government action, the Survey said.
To further develop the well-being evidence base, New Zealand can strengthen measurement of natural capital, innovation, human capital, cultural identity and the integration of indigenous perspectives. It should also ensure sufficient resources are available for collecting key indicators on a regular basis, and with the granularity needed to track inequalities.
Despite generally sound macroeconomic and structural policy settings, productivity and earnings are relatively low in New Zealand. The Survey attributes this to geographical remoteness, insufficient scale, qualification and skills mismatches, weak competitive pressures and low rates of capital investment and R&D activity. Policy settings should be adjusted to further support innovation, business dynamism and competition.
The Survey notes that house prices have risen, affordability has dropped and homelessness is high. Reforms to increase housing supply responsiveness to demand would improve affordability, enhancing well-being. This could include replacement of regulations that restrict new construction with rules that facilitate densification. Also, local government infrastructure funding pressures call for new sources of funding, such as special purpose vehicles financed by targeted rates. Greater priority should be given to new rental housing, including increased provision of social housing in areas with shortages.
Immigration has increased well-being for both immigrants and most of the New Zealand-born, according to the Survey. Migration policy could be improved through more effective targeting to address skills and labour shortages while greater action is needed to ensure that recent immigrants are better integrated into the labour market.
Smarter Food Policy Could Boost Health and Economic Recovery of Asian Cities
Across the world, the COVID-19 pandemic has highlighted the critical importance of reliable food systems that provide healthy and affordable diets to all. That is true also in Asia where cities, large and small, contend with a wide range of food-related issues on a daily basis but often lack a dedicated or coherent set of food policies.
Arguing that food systems are central to the topmost priorities of Asian cities, from nurturing jobs and businesses that are core to a city’s identity to managing waste and congestion, a new World Bank book calls for cities to “get smart to get RICH”—that is, to pursue policies that foster reliable, inclusive, competitive, and healthy (“RICH”) food systems that are better aligned with cities’ contemporary challenges and aspirations.
“RICH Food, Smart City seeks to put food on the menu of urban decision-makers in Asia to generate positive feedback loops between healthy people, a healthy planet, and healthy economies,” said Martien van Nieuwkoop, Global Director of Agriculture and Food, World Bank.
Based on the first systematic survey of urban food policies in 170 Asian cities in 21 countries, undertaken in partnership with the UN Food and Agriculture Organization, the study finds that only 8% of surveyed cities are “food-smart”—intervening in the food system in ways that are forward-looking, holistic, and inclusive. Nearly three-fourths are either at an early stage of effective engagement or fully in reactive mode, responding to problems as they emerge. A reactive approach could prove very costly, both in terms of realized risks and missed opportunities.
The COVID-19 pandemic has served to highlight the essential functions of urban food supply chains and businesses and the vulnerability of urban populations to food insecurity. Even before lockdowns and other responses to the pandemic impacted people’s purchasing power and disrupted supply chains, many residents of cities, especially low-income ones, faced challenges accessing safe, affordable, and nutritious food. In 2016, some 23 percent of urban residents in emerging Asia surveyed by the FAO reported being food insecure. Chronic malnutrition is similarly widespread. More than one-quarter of children under five are stunted in urban Bangladesh, Bhutan, India, Lao PDR, Nepal, and Pakistan, indicating that shortcomings in urban food systems could curtail the economic prospects of many Asian cities and their youngest generation.
Moving from a reactive approach to a more proactive management of food systems holds considerable promise for urban policy makers wishing to make progress on issues that matter to citizens, from food safety and affordability to good health, job opportunities, freedom from pollution and congestion, prosperity, and livability. Asia’s growing middle class and its demand for higher quality, more diverse, and convenient foods also provides enormous business, employment and revenue-raising opportunities for cities.
However, risks associated with urban food systems and changing demand patterns will need to be managed carefully. These include risks related to disease, biosafety, and environmental degradation. In 2017, the proportion of deaths attributed to dietary risks reached 30 percent in East Asia, 22 percent in Southeast Asia, and 19 percent in South Asia, according to the Global Burden of Disease. Overweight and obesity levels are growing nationally, and obesity prevalence tends to be three or four times higher in urban areas than in rural ones.
Many cities in emerging Asia are national if not international ‘hotspots’ for biosecurity and food safety risks, food waste, and the accumulation of plastic packaging waste. The rapid encroachment of cities into natural ecosystems and peri-urban cropland also raises risks to cities’ fresh food supply. Well-informed urban leadership is much needed to turn these urban, national, and even broader food system challenges around.
RICH Food, Smart City argues that city leaders and planners have a key role to play in molding the future trajectory of food systems and offers many examples of how they might do so. The study addresses cities of different sizes and resource levels, presents a menu of potential solutions, and provides concrete illustrations of the many policies and programs that Asia’s cities can learn from and implement to improve food system outcomes. For example,
- Measures to protect peri-urban cropland and develop short supply chain marketing channels can sustain a critical source of fresh produce to cities, contributing to urban productivity, resilience, and circular economies.
- Investments in upgrading community markets that provide fresh food can help ensure more equitable access to nutrition and reduce the incidence of foodborne and chronic illness.
- Neighborhood food loss and waste partnerships and initiatives can support waste prevention, secondary food use, composting, and the bioeconomy.
- Institutional food procurement and marketing standards, paired with technical support to food businesses, can exert significant influence over food markets and dietary patterns in ways that support public health and welfare, the environment, and local economies.
With their power to influence the uses of space and the built environment, to regulate and stimulate private enterprise, and to shape public service delivery, cities’ embrace of food policy can be game-changing, according to the book.
“Municipal leaders are uniquely placed to develop and pursue integrated food policies that respond to citizens’ needs and boost cities’ overall resilience” said Gayatri Acharya, study co-author and Lead Economist, World Bank. “We hope this study will inspire them to seek ambitious solutions for sustainable and healthy food systems that improve the welfare of urban populations.”
Sustainable infrastructure can drive development and COVID-19 recovery
Zimbabwe has long struggled with crippling power outages, some of which can last up to 18 hours a day. The cuts have been especially hard on the country’s hospitals and clinics, forcing nurses to deliver babies by candlelight and doctors to postpone emergency surgeries.
But that is starting to change. Since 2017, Zimbabwe has installed solar panels atop more than 400 healthcare facilities, steadying power supplies and replacing expensive and polluting diesel-fired generators. The “Solar for Health” initiative is a prime example of the type of sustainable infrastructure development that will be vital to combating climate change, improving public services and driving the economic recovery from COVID-19.
So says a new report from the United Nations Environment Programme (UNEP). It urges planners and policymakers to take a more systematic approach to sustainable infrastructure, incorporating it into their long-term development plans and ensuring human-made systems work with natural ones.
“We can no longer use the business-as-usual approach to infrastructure, which is leading to ecological destruction and massive carbon dioxide emissions. Investments in sustainable infrastructure are not only environmentally sound but also bring economic and social benefits. Low-carbon, nature-positive infrastructure projects can help minimize the sector’s environmental footprint and offer a more sustainable, cost-effective path to closing the infrastructure gap,” said Inger Andersen, Executive Director of UNEP.
A source of emissions
Built infrastructure, which includes everything from office blocks to highways to power plants, is responsible for 70 per cent of all greenhouse gas emissions, mentions the report, the International Good Practice Principles for Sustainable Infrastructure. Poorly designed, infrastructure can also displace communities, endanger wildlife and weigh, often for decades, on public finances.
“There is an urgent need to include sustainable and climate resilient infrastructure as an integral part of green growth to deliver energy, water, and transportation solutions that will facilitate opportunity, connection, and sustainable growth,” said Ban Ki-moon, former United Nations Secretary-General and the President of the Global Green Growth Institute, a UNEP partner.”
Ban said the new report is a “very useful guiding framework for governments to lay the groundwork for a future where sustainable infrastructure is the only kind of infrastructure we know.”
To help countries reach that goal, the new UNEP report offers guiding principles for governments to integrate sustainability into their decision making on infrastructure. Among other things, it recommends that states align their infrastructure planning with the United Nations Sustainable Development Goals, humanity’s blueprint for a better future. It also urges them to minimize the environmental footprint of construction projects and meaningfully engage local communities in infrastructure decision making.
Return on investment
The report also highlighted the economic return on sustainable infrastructure, which includes renewable energy plants, eco-friendly public buildings and low-carbon transport. Investing in renewables and energy efficiency, it said, creates five times more jobs than investments in fossil fuels. Similarly, investing in resilient infrastructure in developing countries can create a return of US$4 for every US$1 invested, according to the World Bank.
In Ecuador, the government has turned to nature-based solutions to bolster water supplies to several major cities. By replanting trees, fencing off rivers and purchasing land for conservation, one region has revived watersheds that support more than 400,000 people.
In Singapore, which is aiming to have 80 per cent of its buildings certified as green by 2030, builders have used recycled materials to construct everything from schools to corporate offices. (The country was the first to unveil a building constructed entirely of recycled concrete aggregate and demolition waste.)
With COVID-19 sparking a global wave of stimulus spending, Ambroise Fayolle, Vice President of the European Investment Bank said the publication of the principles “is timely, reminding us all of the importance of building back better by tackling the long-term challenges we face.”
COVID-19 is reversing the important gains made over the last decade for women
Progress for women in work could be back at 2017 levels by the end of 2021 as a result of the COVID-19 pandemic, according to analysis conducted for PwC’s annual Women in Work Index, which measures female economic empowerment across 33 Organisation for Economic Cooperation and Development (OECD) countries*. The evidence emerging globally is that the damage from COVID-19 and government response and recovery policies, is disproportionately being felt by women.
For nine years, countries across the OECD* made consistent gains towards women’s economic empowerment. However, due to COVID-19 this trend will now be reversed, with the Index estimated to fall 2.1 points between 2019 and 2021, according to analysis undertaken for PwC’s annual Women in Work Index. The Index will not begin to recover until 2022, where it should gain back 0.8 points.
In order to undo the damage caused by COVID-19 to women in work – even by 2030, progress towards gender equality needs to be twice as fast as its historical rate.
Bhushan Sethi, Joint Global Leader, People and Organization at PwC, said:
“The setbacks that we are experiencing with COVID-19 in terms of the workforce tell a worrisome story. While the impacts are being felt by everyone across the globe, we are seeing women exiting the workforce at a faster rate than men. Women carry a heavier burden than men of unpaid care and domestic work. This has increased during the pandemic, and it is limiting women’s time and options to contribute to the economy. In the labour market, more women work in hard-hit human contact-intensive service sectors – such as accomodation and food services, and retail trade. With social distancing and lockdowns, these sectors have seen unprecedented job losses.”
Between 2019 and 2020, the annual OECD unemployment rate increased by 1.7 percentage points for women (from 5.7% in 2019 to 7.4% in 2020). In the US, the female unemployment rate increased sharply from 4% in March 2020 to 16% in April 2020. The female unemployment rate stayed high for the remainder of 2020, ending the year in December 2020 at 6.7%, 3 percentage points higher than in December 2019. In the UK, the full impact of job losses from COVID-19 is yet to be realised due to job retention schemes, but furlough data shows that women are at greater risk of losing their jobs when these schemes come to an end. Between July and October 2020, a total of 15.3 million jobs were furloughed in the UK. For furloughed jobs for which gender was known, 52% of these were women’s jobs, despite women only making up 48% of the workforce.***
The disproportionate burden of unpaid childcare falls on women
Before COVID-19 hit, women on average spent six more hours than men on unpaid childcare every week (according to research by UN Women). During COVID-19, women have taken on an even greater share and now spend 7.7 more hours per week on unpaid childcare than men** – this ‘second shift’ equates to 31.5 hours per week; almost as much an extra full-time job.
This increase in unpaid labour has already reduced women’s contribution to the economy. If this extra burden lasts, it will cause more women to leave the labour market permanently, reversing progress towards gender equality and reducing productivity in the economy.
While some women may choose to leave the workforce temporarily due to COVID-19 with the intention to return post-pandemic, research shows that career breaks have long-term impacts on women’s labour market prospects, and women will return to lower paid and lower skilled positions.
PwC Women in Work 2021 Index (performance prior to COVID-19 pandemic)
Iceland continues to hold the top spot on the Index out of OECD countries. It is a consistent strong performer in female labour force participation (84%), has a small participation rate gap (5%), and even smaller female unemployment rate (3%).
Greece saw the largest increase in terms of Index score between 2018 and 2019, driven by improvement in all labour market indicators except for the share of full-time female employees. On the contrary, Portugal experienced the largest decline in Index score between 2018 and 2019 due to a widening of its gender pay gap by 5 percentage points.
New Zealand and Slovenia both increased their rankings on the Index by one position. New Zealand saw an upward trend across all five indicators and has risen by 5 spots on the Index over the course of nine years. Government policy and a history of female representation in political institutions have helped to drive these gains. Slovenia’s improvement was driven by a fall in the participation rate gap and in female unemployment, as well as an increase in the share of full-time female employment.
If OECD countries increased their rates of female employment to match Sweden’s (consistently the top performer), the gain to GDP would be over US$6 trillion per annum. The US, with one of the highest female unemployment rates, is expected to gain the most – as much as US$1.7 trillion per annum.
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