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Theme of reflection for new government: Inclusive Development Index – Romania, 10th position among emerging countries

de Marin Pana , 5.2.2018

The Inclusive Development Index (IDI) makes an annual assessment of 103 countries, which, besides GDP, considers 12 elements of the economic growth, based on three main pillars:

  • growth and development,
  • social inclusion and equity between generations,
  • sustainability in the management of natural and financial resources.

The first pillar consists of GDP per capita, employment rate, labour productivity and healthy life expectancy, the second is related to the median household income, the poverty rate, the Gini coefficient for incomes and Gini coefficient for wealth, and the third pillar refers to the adjusted net saving, public debt (as a share of GDP), dependency ratio and the intensity of GDP in carbon emissions.

IDI is a project of the World Economic Forum, the System Initiative on Shaping the Future of Economic Progress. It aims to facilitate the inclusive economic development by deepening the public-private partnership through analysis, strategic dialogue and concrete co-operation, including the social impact acceleration by corporate action.

IDI has been conceived as an alternative to GDP, as an attempt to better reflect the criteria by which people assess the economic progress of their countries. States are divided into two categories, advanced and emerging. The scores, based on a rating from 1 to 7, are not strictly comparable between the two categories of states because of the different definitions of poverty.

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  • Ranking of inclusive development
  • Advanced economies             score   trend in last five years

*

Very interesting, the Czech Republic is already ranked 15th, ahead of South Korea, Canada and France, followed by other two former socialist states, Slovenia and Slovakia, ahead of the UK, plus Estonia ahead of the USA and Japan.

We appear in the second ranking, dominated by former CAER colleagues:

*

  • Emerging economies              score   trend in last five years

*

Beyond the fact that we have just exceeded very little our Bulgarian neighbours, despite the fact that we have advanced in terms of GDP per capita, it is still significant that we are positioned ahead of countries such as Turkey (16th position with a score of 4.26), the Russian Federation (19th position, 4.20) or China (26th position, 4.09). The progress illustrated by the five-year trend (2012-2016) is relatively good, although it remains half the one of Latvia or Hungary.

Interpersonal trust affects our economic performance

Noteworthy to us, the relationship between the performance in terms of inclusive development and interpersonal trust, presented graphically, places us near Uganda, Armenia and Brazil among the states ranked somewhere in the mid of the 5% -10% trust interval.

That is, well below the 20% level achieved by Bulgaria, Poland or the Republic of Moldova, the weakest in the former eastern bloc, where Hungary and the Czech Republic head to 30%.

For reference, we mention that the most developed countries also have the highest rates of interpersonal trust, about 75% in Norway, about 65% in the Netherlands and Sweden, and 60% in Finland.

Somewhat surprising, but to be considered if we are willing to advance faster, China is positioned between the latter two.

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Publicat la data de 5.2.2018

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