That Development Lady

September 12, 2009

At a time when Europe struggles to emerge from economic recession, the European Union vows to create indicators for its well-being that go beyond calculating the Gross Domestic Product (GDP). The European Commission said Tuesday that it will propose in 2010 a pilot environmental index that complements GDP as a measure of progress by gauging water use and pollution, greenhouse gas emissions, loss of natural landscapes, air pollution and waste generation.

The EU also plans to implement more timely social indicators, including more accurate reporting on inequality.

“GDP was not intended to be a measure of well-being,” a Commission press release said Tuesday. “It doesn’t pick up on issues that are vitally important to the quality of our lives such as a clean environment, social cohesion or even how happy people are.”

The proposals are part of the Union’s efforts to make the shift towards a low-carbon, resource-efficient economy.

“To meet the challenges of the 21st century we need more integrated and transparent policies,” European Environment Commissioner Stavros Dimas said in the press release. “To change the world we need to change the way that we understand the world, and to do this we need to go beyond GDP.”

The proposed actions, however, will only complement, and not replace, GDP as a yardstick of economic and social development.

Introduced after the Great Depression in the 1930s, GDP measures the total final market value of all goods and services produced within a country during a given period. Although it effectively indicates a country’s economic growth, it has long been criticized by civil society groups for overlooking non-marketed economic activities as indicators of well-being and wealth.

Despite the Commission’s plans to move beyond it, however, some NGOs are still skeptical, EUobserver reported.

“Fifteen years have passed since initial discussions, and we are no closer to implementing measures for environmental sustainability, societal progress and well-being,” said Tony Long, director of the European Policy Office at the World Wildlife Fund (WWF).

He added that the Commission’s plans also exclude other indices, such as WWF’s “Living Planet Index” – which reflects the health of the planet’s ecosystems — and the “Ecological Footprint” — which shows the extent of human demand on these ecosystems

via

southpol:

Joseph E. Stiglitz: Rethink GDP fetish

The big question concerns whether GDP provides a good measure of living standards. In many cases, GDP statistics seem to suggest that the economy is doing far better than most citizens’ own perceptions. Moreover, the focus on GDP creates conflicts: political leaders are told to maximize it, but citizens also demand that attention be paid to enhancing security, reducing pollution, and so forth - all of which might lower GDP growth.

The fact that GDP may be a poor measure of well-being, or even of market activity, has, of course, long been recognized. But changes in society and the economy may have heightened the problems, at the same time that advances in economics and statistical techniques may have provided opportunities to improve our metrics.

Global recognition including the Nobel Peace Prize and the Presidential Medal of Freedom has not kept Muhammad Yunus from his main goal - getting people out of poverty with the help of small loan-interest loans. The Nobel Laureate announced that his banking organization, Grameen America, has issued micro-loans to 1000 low-income borrowers in the United States.

Muhammad Yunus says he is on a mission to make the financial system accessible to every human being on the planet, whether they reside in a village in his native Bangladesh, or in the financial capital of the world - New York City.

President Barack Obama (l) places a 2009 Presidential Medal of Freedom around the neck of Muhammad Yunus at the White House, 12 Aug 2009Hours before receiving the Presidential Medal of Freedom from U.S. President Barack Obama in the White House Wednesday, Yunus told reporters in Washington that credit should be a human right available to anyone who needs it.

“Now we can build a new kind of financial system, a financial system which can work just like we do in Jackson Heights, giving people who are never able to open even a bank account, forget about taking a loan,” said Muhammad Yunus.

Yunus began giving small personal loans to women in Bangladesh in the 1970’s. The villagers eventually paid him back with interest, and this money was put back into the system, to provide loans to more low-income women.

Yunus was awarded the Nobel Peace Prize for his work in 2006, and his micro-lending program has launched into a worldwide movement.

Since January of last year, Yunus’ Grameen America has lent over $2 million to U.S. women at or below the poverty line, allowing them to start or expand a small business. The loans are low-interest and collateral free, and so far, Yunus says they have been paid back at a rate of nearly 100-percent, despite a recession.

The Nobel Laureate says his locally-based micro-credit programs are unaffected by the global economic crisis.

“It’s tied to real economy, not paper based economy where you create a fantasy world of finance, and that’s what created the crisis, so we don’t belong to the fantasy world,” he said.

Yunus says micro-credit programs are especially vital at a time when unemployment rates are rising. He encourages governments to give people options that include the ability to become self-sufficient with the help of small, low-interest loans.

“They will build their own employment and in the process they will inspire other people that look I can handle myself, because I am an experienced person, I am a skilled person, why should I be sitting around and taking government money and live my life,” said Yunus.

Yunus is taking this message and his micro-lending services to other parts of the U.S., as well as China, hoping to help lift more people out of poverty.

Posted by Christine Ahn

Women may already hold up half the sky, but their burden is about to get heavier in this financial crisis.

Caren Grown

In ordinary times, women and girls are the majority of the world’s poor and illiterate, but in times of financial crisis, women and girls are disproportionately impacted. Exactly how is a very important question—not only to chart solutions, but also to prevent the reversal of significant gains made in women’s rights.

To tell us how were Caren Grown, economist at American University, and Maya Rockeymoore, President of Global Policy Solutions. Over 75 listeners called in for a webinar, “Women’s Work: A New Blueprint for Economic Recovery,” sponsored by the Global Fund for Women and the Women’s Foundation of California.

One obvious way women will be impacted is that many women will earn less, but Grown said this depends on the sector, occupation and country. When the financial crisis hit Asia in 1997, more men than women lost jobs in the Philippines, whereas in South Korea, for every man, seven women were laid off. In a bizarre twist of patriarchal irony, the Korean government launched a “get your husband energized” campaign encouraging women to support depressed male partners.

Today, 60 percent of the global workforce are now women, which means policymakers will have to eliminate “breadwinner bias,” an assumption that men are more entitled to paid work than women.

Furthermore, women will have to do more with less, as food and fuel prices rise, and because key public services will be cut, such as education and health care. This doesn’t bode well for the gains made to some of the world’s most intractable problems through investments in girl’s education.

Yet the predominant government response (by 60 countries) to the crisis has been stimulus packages focused on physical infrastructure, creating jobs mostly dominated by men. Yet we need investments in social infrastructure — education, public health, childcare, and community services – both because these sectors are where women are more often employed, and because they benefit communities as a whole. Social infrastructure creates jobs for women!

Maya Rockeymoore

According to Rockeymoore, the sub-prime mortgage crisis wasn’t contained to just low-income communities of color. Women, regardless of race and class, were disproportionately targeted for these risky loans. Yes we need tighter regulations of financial transactions to reduce volatility, but we also need more women at the finance table for more transparency and accountability. Studies show that male testosterone played a role in driving the crisis, whereas women, who are more risk-averse, can put a much-needed brake on risky activity. (see related New Yorker articles “Cocksure” and on Sheila Bair).

The two presenters proposed long-term solutions, like reinstating affirmative action for women, and foundations investing in advocacy and grassroots organizing, and immediate actions, such as the one in Vermont where women state legislators organized to mandate that the state document beneficiaries of the stimulus package by race, ethnicity and sex. Rockeymoore reinforced the need to reclaim democracy as U.S. policies and the rules of the capitalism are not dictated by the voting public, but by powerful corporate interests. And Grown called for more women economists analyzing the crisis from a gender equality lens and to connect with women’s grassroots efforts.

Perhaps then we can begin to construct another global economy that isn’t built on exploiting women who hold up half the sky.

Christine Ahn is the Communication Research Analyst at the Global Fund for Women