GDP does not capture the level of inequity which exists in a society. That’s where Social Progress Index comes into the picture.
World over, big leaders and people are rethinking the adequacy of gross domestic product (GDP) as a country’s development index, and are debating over it vigorously. GDP only and only focuses on economic growth. It is an old measure, which was developed in the 1930s, as a statistical tool for policy makers to determine the recovery from the Great Depression. GDP is calculated quarterly to primarily analyse the strength of an economy, and for setting economic goals and objectives. But, it does not capture the level of inequity, which exists in a society, regardless of overall economic growth. The fact is in a progressive country with a robust GDP figure, the inequality could be worse. And, GDP does not take into account the social and environmental processes of development which are vital.
History: In 2010, a group comprising economists, global leaders, philanthropists, business sector leaders and the social leaders sought to develop a better yardstick to measure a country’s level of progress by understanding the citizen’s development needs and priorities. This group was funded by private foundations, and Professor Michael Porter of Harvard Business School and Scott Stern of Massachusetts Institute of Technology guided them technically for setting indicators. The Group is named as Social Progress Imperative, a not for profit organisation; it launched a beta version, which means a premature version of a programme or an application that contains most of the major features for testing and feedback, which is yet to be completed. This is how the Social Progress Index was born and is based on the writings of Amartya Sen, Douglass North and Joseph Stiglitz.
In 2013, they tested it on 50 countries to measure a wide-ranging array of components of social and environmental performance and combine them into an overall framework. The index was developed based on extensive discussions with stakeholders around the world about what is excluded when policy makers focus on GDP. The Social Progress Imperative defines ‘social progress’ as the capacity of a society to meet the basic human needs of its citizens to enhance and sustain the quality of their lives to the fullest.
SPI 2017: India has been ranked 93rd out of 128 countries in the 2017 Social Progress Index (SPI). The list is topped by Denmark, Finland, Iceland, Norway and Switzerland. The 2017 SPI includes data from 128 countries on 50 indicators. India’s performance on health-related Sustainable Development Goals (SDGs) Index is the worst among BRICS nations. India scored lower than the other four from the BRICS group, as its score on Hepatitis B cases was 10.5/100 for deaths; this is attributed to unsafe water, sanitation and hygiene practices. India also scored poorly on incidences of those under 18 who experienced sexual violence. India still lags in areas such as water, sanitation and access to higher education.
GDP far from being the sole determinant: The SPI data reveals that many aspects of social progress tend to improve with income growth. Wealthier countries generally deliver better social outcomes than lower-income countries. Costa Rica, for example, is an achiever of a higher level of social progress, though it scores low on GDP. It’s been observed that where there is an imbalance between economic growth and social progress, political instability and unrest often arise, as in Russia and Egypt. Lagging social progress also holds back economic growth. Therefore, countries must invest on social progress.
One such example is of Bangladesh. It is one of the top performers in ensuring nutrition and basic medical care, and health and wellness, according to the Social Progress Index 2016 prepared on a study on 133 countries. In the basic human needs dimension, Bangladesh performs best on nutrition and basic medical care, and has most opportunity to improve on the shelter component. In the foundations of wellbeing dimension, Bangladesh scores highest on access to basic knowledge, but lags behind on the environmental quality component.
Bhutan’s GNH: A tiny country has rejected GDP, since 1971, as the only way to measure progress. In its place, it has supported a novel approach to development, which measures prosperity through formal principles of gross national happiness (GNH) and the spiritual, physical, social and environmental health of its citizens and natural environment. For the past three decades, this belief that wellbeing should take preference over material growth has remained a global oddity.
Government’s role in SPI: The government of any nation in the world is a provider of goods and services that individuals cannot provide for their own selves. The basic economic infrastructure of human connectivity requires elements such as infrastructure roads, bridges and ports of all kinds, and increasingly the means of virtual travel, such as broadband. Governments must alleviate the inability of citizens to provide for themselves, particularly, in the vulnerable conditions of childhood, old age, sickness, disability and unemployment due to economic forces beyond their control.
One-third of food produced globally every year does not reach human mouths; it is either lost in transit or wasted by consumers themselves—this amounts to a staggering 1.3 billion tonnes every year. These frightening figures are published in 2012 report called ‘Avoiding Future Famines’ released by the United Nations Environment Programme held at Rio+20 summit on sustainable development. Human development does not take place in a social vacuum. We all contribute to good and bad development of our nations. If we citizens decide to achieve happiness and progress, and help each other wholeheartedly, it’s not a difficult task at all!
Vidya Hattangadi is anagement thinker and blogger. Views are personal