Economy

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What is clear in 2019 politcy makers responses have misjudged the global economy. The Inclusive Development Index (IDI)reflects more closely the criteria by which people evaluate their countries’ economic progress and is designed as an alternative GDP measures.

Inclusive Growth and Developement Indicators

Growth is a necessary but not sufficient condition for robustly rising median living standards. Accordingly, policymakers and citizens alike would benefit from having an alternative, or at least complementary, bottom-line metric that measures the level and rate of improvement in shared socioeconomic progress.- IDI

Why the need for a more accurate measure?

Slow progress in living standards and widening inequality have contributed to political polarization and erosion of social cohesion in many advanced and emerging economies. This has led to the emergence of a worldwide consensus on the need for a more inclusive and sustainable model of growth and development that promotes high living standards for all.

To help narrow the gap between aspiration and action, the World Economic Forum System Initiative on Shaping the Future of Economic Progress last year introduced a new economic policy framework and performance metric in its Inclusive Growth and Development Report 2017. The framework identifies 15 areas of structural economic policy and institutional strength that have the potential to contribute simultaneously to higher growth and wider social participation in the process and benefits of such growth

 Inclusive Growth aIndec 2018

Table 1 presents the updated 2018 results and global rankings of 103 economies for which data are available. It ranks economies in two groups – advanced and emerging. Individual indicator scores are compared in a traffic-light shading format in quintiles in Tables 4-7.

Results and Key Findings: 

Norway is the best performing advanced economy in 2018, with a consistently strong performance: it ranks second on one of the Index’s three pillars (Intergenerational Equity and Sustainability) and third on each of the other two (Growth and Development, and Inclusion).

Small European economies dominate the Index, with Australia (9) the only non-European economy in the top 10.

Of the G7 economies, Germany (12) is ranked highest, followed by Canada (17), France (18), United Kingdom (21), United States (23), Japan (24), and Italy (27).

In many countries, there is a stark difference between individual pillars:

For example, the US ranks 10th out of the 29 advanced economies on Growth and Development, but 26th on Intergenerational Equity and Sustainability and 28th on Inclusion; France, meanwhile, ranks 12th on Inclusion, 21st on Growth and Development, and 24th on Intergenerational Equity and Sustainability.

Low scores on the latter pillars suggest an economy may be storing up problems for the future.

In the ranking of emerging economies, six European economies are among the top 10: Lithuania (1), Hungary (2), Latvia (4), Poland (5), Croatia (7), and Romania (10).

These economies perform particularly well on Growth and Development,benefiting from EU membership, and Inclusion, with rising median living standards and declining wealth inequality.

IDI Trends by income

Latin America accounts for three top 10 economies: Panaop 10 economies: Panama (6), Uruguay (8), and Chile (9).

Performance is mixed among BRICS economies: the Russian Federation (19) is ahead of China (26), Brazil (37), India (62), and South Africa (69). Although China has ranked first among emerging economies in GDP per capita growth (6.8%) and labor productivity growth (6.7%) since 2012, its overall score is brought down by lackluster performance on Inclusion.

Turkey (16), Mexico (24), Indonesia (36), and the Philippines (38) are among economies which show potential on Summary and Data Highlights4 | The Inclusive Development Index 2018Summary and Data Highlights The Inclusive Development Index 2018  Intergenerational Equity and Sustainability, but lack progresson Inclusion indicators such as income and wealth inequality.

As for recent performance, 64% of the 103 economies for which data are available have seen their IDI scores improve over the past five years, attesting to recent efforts by policymakers to broaden socioeconomic progress.

This has been largely driven by gains among upper-middle-income economies, while low-income economies have fallen further behind . In 27% of the economies, however, IDI scores have decreased even as GDP per capita has increased.

Source: The Inclusive Development Index 2018

From The Traders Community Research Desk

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