Even as India commits itself to move on the fast track of economic growth, it must be mindful of the need to invest in improving its social indicators as well
Is Gross Domestic Product (GDP) an adequate measure of a country’s development across many dimensions? This has been debated vigorously in recent years. The discontent with GDP stems from the fact that it focusses exclusively on economic growth. Even there, it does not capture the level of inequity which can exist in a society despite overall economic growth. The inequity can in fact even be exacerbated by it. More importantly, it pays no attention to the social and environmental measures of development which are as important as economic development. Indeed, the United Nations has identified three pillars on which the post- 2015 Sustainable Development Goals (SDGs) must rest: economic, social and environmental.
Several alternative measures have been proposed to capture the social dimension of development, combined with or independent of economic indices. Bhutan has embraced and espoused the concept of Gross National Happiness. A World Happiness Report is now periodically published from the Columbia University which compares self-reported levels of happiness of people from different countries. A composite Wellness Index was proposed by noted economists Stiglitz, Sen and Fitoussi in response to a request from the then President of France, Nicolas Sarkozy, for a measure of development that looks beyond GDP. A Global Multidimensional Poverty Index was developed at Oxford to gauge inequity within and across societies.
We may continue to measure GDP, but we must also measure social progress lest we end up as a soulless society characterised by gaping equality
However, none of these has really caught on because economists, industrialists and politicians alike are conditioned to place a high premium on economic development as the measure of progress and do not like to see the clarity of a single measure like GDP cluttered by a host of other indicators they view as imprecise or even irrelevant. So, an index of social progress is needed which does not try to displace GDP (not yet anyway) but has additive value. Such an index can be used to remind political leaders that their bifocal vision must accommodate both economic and social progress as being important for a country, recognising, of course, that these two tracks are closely interlinked and sometimes inseparable.
Such an index of social progress has recently been created by a group of academics and institutions constituting the Social Progress Imperative (www.socialprogressimperative.org). This index has three major domains: Basic Human Needs, Foundations of Wellbeing and Opportunity. Each of these has several clusters of specific indicators (as shown in the table).
The environmental dimension is partly incorporated into the Social Progress Index (SPI) as a cluster of indicators related to ecosystem sustainability. While there can be debates on which other indicators could have been included in any of the clusters, the SPI does provide a list of key areas which need to be tracked and acted upon to ensure a higher level of social progress. The index is still evolving, with validation studies being conducted on data from different countries. The authors have extended an open invitation to groups from anywhere in the world to use their data sets for validation and suggest refinements.
The designers of this index draw our attention to three overarching findings of their study so far: social progress is distinct from economic development, though correlated with it; some aspects of social progress are more closely related to the level of economic development than others; countries have relative strengths and weaknesses in social progress, both across the major dimensions and across components within the dimensions.
Of the three domains, Basic Human Needs is best correlated with per capita GDP, Foundations of Wellbeing being intermediate and Opportunity the least so. However, in each domain there is variability in the degree of correlation between the individual components and per capita GDP. As the developers of SPI affirm, the index offers a new tool to explore the complex two-way relationship between economic and social progress. At the same time, it provides a metric for comparison of countries, and States within a country.
In inter-country comparisons, the top three countries were New Zealand, Switzerland and Iceland. Not surprisingly, Netherlands, Norway, Sweden, Finland and Denmark feature in the top 10. India scored lower than the other four from the BRICS group because of lags in areas such as water, sanitation and access to higher education. In specific indicators, there is variability across these countries. For example, China lags in personal rights and Brazil in personal safety. Costa Rica has an SPI close to that of far richer countries like Spain and Italy. Costa Rica’s outstanding health status and access to education may be related to investment priorities (it has no defence budget) and social harmony. For the present, India need not concern itself with comparisons with other countries or even debate on how accurately the individual components of the index measure social progress. It would help if the SPI indicators serve as a checklist to monitor our progress over time in each of these important areas of human welfare.
Even as the country commits itself to move on the fast track of economic growth, it must be mindful of the need to invest in improving the social indicators as well. We may continue to measure GDP if that is still considered the talisman of economic progress by the worlds of politics and finance, but we must also simultaneously measure social progress lest we end up as a soulless society characterised by gaping inequality and glaring social backwardness despite gaining wealth. Let GDP and SPI be the inseparable Gemini twins that herald our ascent to higher levels of balanced development.