- Category: Politics
18 Jun 2012
- Published on Monday, 18 June 2012 12:27
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Some countries leaning towards economic growth remain unsustainable when "natural capital," such as lands and ecosystems, is used as a basis for development, according to a new report that assesses the wealth of nations using wider standards. The report, launched by the International Human Dimensions Programme on Global Environmental Change, aims to go beyond the gross domestic product as an indicator of economic development because of the concept's supposed short term viability. Instead, the report offers a new economic index – the Inclusive Wealth Index - which measures a country's productivity using other assets like its natural capital, which refers to natural resources, land, and ecosystem services; produced capital like machineries and buildings; and human capital, which includes factors like education and health.
The index shows that China, the United States, Brazil and South Africa, despite their high G.D.P., have low natural capital. Using G.D.P., China grew by 422 percent, the U.S. by 37 percent, Brazil by 31 percent and South Africa by 24 percent, from 1990 to 2008. On the other hand, when measured according to the Inclusive Wealth Index, China only expanded by 45 percent, the United States by 13 percent and Brazil by 18 percent. South Africa actually decreased by 1 percent. The discrepancy reflects the depletion in these countries' natural resources, the report says. Natural resource decline In a 19-year period, decline in natural resources is evident in China by 17 percent, the U.S. by 20 percent, Brazil by 25 percent and South Africa by 33 percent. Among 20 countries considered, Japan is the only nation that did not have negative growth in natural capital, due to its increased forest cover. The index also revealed that six nations - Russia, Venezuela, Saudi Arabia, Colombia, South Africa and Nigeria - had experienced economic decline as opposed to their positive G.D.P. results. The 20 countries under the initial assessment were Australia, Brazil, Canada, Chile, China, Colombia, Ecuador, France, Germany, India, Japan, Kenya, Nigeria, Norway, Russia, Saudi Arabia, South Africa, United States, Britain and Venezuela. The assessment for these countries covered the period from 1990 through 2008. The 20 countries represent more than half of the world's population and about three quarters of the world's G.D.P. The Inclusive Wealth Index 2012 is the first among the series of reports which will be published every two years to track the growth and development of the world's nations. The Inclusive Wealth Report was launched last June 17 during the Rio+20 Summit. It is a collaborative effort of the United Nations University-International Human Dimensions Programme, a research that studies human and societal aspects of the phenomenon of global change, and the United Nations Environment Programme, an environment body of the U.N. system. – C. Dominguez