Economic Development – How We Measure It, How It Varies Around the World V

31/03/2015 Pedro Pereira Leite Deixe o seu comentário

We’ve been looking at the level of economic development across countries in the world, we’ve been using the short hand of the gross domestic product per capita. One of the most important questions we want to know is whether today’s poor countries have the chance, and are indeed on a path to close the gap with the higher income countries.

We know that if they make that transition successfully It will raise their well being but it will also improve other aspects of life. The health, the life expectancy of the population, educational attainment, opportunities of the population more generally. We’re interested therefore both in understanding whether poor countries tend to narrow. The development gap with richer countries. And from that normative or goal directed perspective were interested in how that can be achieved.

Economists use a couple of terms that are very important for this concept. The term convergence Is the term that is used to convey a narrowing of the proportionate gap of a poor country and a, a richer comparison country. Is the proportion of income per person in the poor country relative to the rich country Rising. Is the poor country closing that gap? If so, the poor country is said to be converging with the higher income country. The opposite is divergence.

Divergence means that the poor country, in relative terms, is becoming even Poorer when compared to the rich country. Maybe the poorer country is making progress, maybe it’s income per person is rising 1% per year. But if the richer country is making even faster economic growth, say 2% per year. Then the poorer country will have a declining relative size in gross domestic product per person relative to the higher income country.

So we want to study whether countries are converging or diverging. That will tell us a lot about, whether overall differences of material life, life expectancy, health, education levels, degree of urbanization, are tending to narrow between the rich and the poor countries, or tending to widen. I would say in this very complicated question with a very diverse record of now the 193 countries around the world.

So no one story line that fits all. We could say in broad terms that one part of the period of modern economic growth has. Tended to be characterized by a kind of divergence. And more recently, by a pattern of broad convergence.

What do I mean by that? We’re going to be studying how modern economic growth took off in the industrial revolution. And we know that until the Industrial Revolution began, most of the world was poor. Most of the world was rural. The gaps of, rich and poor countries were quite narrow, not like the huge gaps today. And then, a takeoff started with the Industrial Revolution. And with that take-off a certain part of the world a relatively small part of the world starting in England spreading to Great Britain more generally spreading to Western Europe the United States, Australia a very few other places initially experienced that industrialization.

In the first part of the 19th Century. Most of the rest of the world remained poor and rural, and the overall process was one of divergence. The rich were becoming richer because they were industrializing; the poor were like they always were. Eking out survival in peasant farming in most of the world. Relatively untouched by the new inventions of the steam engine, or the railroad, or the telegraph, or the other technological advances that helped to set off the process of long term economic growth.

One could say that the rich were getting richer. And the poor were kind of stuck at the bottom. And the relative gap between the two was tending to widen. Then came a huge political phenomenon. And that is the phenomenon of imperialism. Because as Western Europe became industrial and quite powerful, it took political control over more and more of the world. Will see that the British empire expand the world will see that other European powers. Took on more and more imperial possessions, notably in Africa and in Asia. This, I think, was a big set-back to the potential of convergens. Because, when countries are dominated by other countries, it’s very hard for those who are in that subservient position politically to undertake the kinds of steps improving the infrastructure of the country raising education levels that are crucial for achieving economic development, and often the imperial masters. Are not so interested in the economic development of their possesions, rather they’re interested in taking out as many of the resources of those countries as they can, for the development of their own home industries.

I think it’s fair to say, from the period of around 1850 to 1950 The world was broadly characterized by economic divergance, where a few parts of the world were becoming richer and richer, more and more industrialized, more and more millitarily powerful, other parts of the world were stuck in poverty and Many parts of the world were stuck as the imperial possessions, of, European imperial powers.

Of course, there was much history during that century and two devastating world wars. And at the end of the second world war, A quite different political dynamic, one very important for global economic development occurred, and that was the so-called end of the colonial era, and the decolonization of countries around the world who gained political independence. One of the bright spots of a political sovereignty, freedom from imperial domination was the ability of more and more countries to undertake economic development on their own. And many countries, when they got independence, said hey we’re far behind; now it’s our turn to industrialize We need to take crucial steps. Build roads, build rail. electrify, the countries, so that electrification provides a basis for industrial development. Attract industry. Both the domestic and foreign investors. So that we, too, can experience the process of economic development. And with that massive global political change, and with further technological developments, better transport, better communications, the new information age, that enabled. The poor countries of the world to pick up the pace of their economic development. And convergence that is faster economic growth in the poor countries became more of the usual condition that it had been in the years up to 1950.

Since the middle of the last century, therefore, the end of World War II, the end of the Imperial Age, the beginning of the economic development in many former colonies, we’ve seen a tendency towards conversions. And that is enabling more and more Low income countries to join the ranks of the middle income countries, and middle income countries to join the ranks of the high income countries.

One of the crucial goals of sustainable development is that all of today’s low income countries and especially the least developed countries remember the. 50 or so poorest and most vulnerable among the low income countries, should make that transition successfully through convergence to middle income status. And most of them, or perhaps all, have the goal of achieving high income status through their own economic development. One of our key goals is to understand how that process can work and what is it that impedes convergence among some countries.

When we look around the world today we see ample evidence of countries that were once poor achieving very rapid. A convergence. China is our most exemplary case. Astounding economic performance over roughly 35 years since 1978 when China began many important economic reforms that put it on a path of convergent growth. We also see parts of the world, today’s least developed countries, stuck in poverty, we’ll call that a poverty trap that is so tight, that they are not yet achieving economic conversions. Niger is an example of such a country. It is a land locked country in the Sahel region of Africa. You can see it on the map that it is a country just south of the Sahara Desert. It’s far from the coast. It’s one of the world’s poorest countries. It’s a country that’s just at the bottom of the world’s human development index, meaning that not only is it income poor but also it’s conditions of education and health, are very dire indeed. But not only has Niger had to suffer this kind of poverty It’s been stuck in a poverty trap for a long period. So unlike China, it has not been achieving economic conversions. Let’s look at at the numbers just as an example. We’ll measure the gross domestic product Per person, in purchasing power parody adjusted terms. Remember, taking into account different price levels across countries. If we look back at 1980, the per capita income in the prices of those days, in the United States was about $12,000 per person. In China about $250 per person, very poor. In the Niger, maybe even higher than China on the, official date at about $450 per person. Now let’s fast forward to the year 2010. What’s happened? China experienced decade after decade. Of double digit economic growth with the economy doubling every few years, every seven years on average. And that meant that by the time 2010 came around China was no longer at $250 per person. It was now at merely. $10,000 per person the United States by then at about $50,000 per person Niger unfortunately still stuck at below $1,000 per person and still among the least developed countries. If you ask the question about. Divergence and convergence China, went from being 2% of the U.S,. gross domestic product per person to being around, 20% of the us gross domestic product per person. Still. Far below the US income level, even adjusting for price level, but narrowing the gap very quickly. Niger sadly, started out at around 4% of the US per capita level, but by 2010, less than 2%. In other words, experiencing divergence rather than convergence.

One of our most important objectives in the coming talks will be to examine this process of convergence versus divergence to try to understand the underlying factor. And really to unlock the keys that can help today’s poorest countries get on a trajectory of convergence so that they too can have the improvements of material life, improvements of health, education, income per person that we know can be important component of improved well being.

Lectures / Readings

Economic Development – How We Measure It, How It Varies Around the World IV

31/03/2015 Pedro Pereira Leite Deixe o seu comentário

Measuring Wellbeing

We’re interested in the quality of life. Part of that of course is the level of income. Can people feed themselves? Can they afford healthcare? Can they afford basic amenities? But we know that, there’s more to life than bread alone. We know that material possessions aren’t everything. We know that simple measures, like the income per person, only give us a rough reflection of the overall level of well-being of an individual or a nation. And since in sustainable development what we’re really interested in, is not raising market income per se, we’re really interested in raising human well-being.

It’s important for us to ask then, how can we measure well-being? I’ve used so far the shorthand of the gross domestic product per person. Because it’s not a terrible indicator. It gives us some relevant information. It is not only related to income and not only related to the absence of poverty when that income per person is high enough, but it also is related to other things that we know we care about, education levels, health and opportunities in life. But of course, we can do better than using one simple indicator of human well-being, and we know that whatever indicator we use we can’t just rely on averages.

We have to look at the variation within a society, or across societies, as well as the average numbers that we’re using. So what are some of the options of measuring human well-being that go beyond the simple calculation of the gross domestic product per person? One important innovation championed by the United Nations Development Program during the last quarter century is the human development index.

It tries to give a more holistic account of human development to take into account things which empower people. Which help them meet their capacities. And it does that by looking at income per person as just one of the three basic dimensions of well-being.

Adding in indicators of educational attainment, whether it’s literacy or enrollment rates, together with measures of health typically looking at life expectancy at birth. And by taking a kind of weighted average a part due to income, a part due to education, and a part due to health, The United Nations Development Program has created and now tracked for a quarter century an overall index of human development, or HDI. And we’ve learned a lot from that.

If you look at the HDI, or the human development index you can see that it looks similar to the map of gross domestic product per person. But, it’s by no means the same. There are countries that are relatively low on income per capita and do quite well on the human development index because they have good indications of life expectancy and educational attainment.

There are, on the other hand, many countries that rank very high in income per capita, but do not have good outcomes when it comes to health and education. Let’s take a look at some examples of countries that are rather rich in terms of their gross domestic product per capita. But rather poor on their human development indicators. Equatorial Guinea is such a case.

Equatorial Guinea was a completely impoverished country in West Africa until a few years ago when it struck it rich with the oil and gas discoveries. That’s potentially good if those oil and gas earnings are used wisely and invested in raising overall well-being. But there’s a lag and there’s a question of the equality of governance to accomplish that. As it stands today Equatorial Guinea ranks rather high on income per person. It’s 32nd in the world in income per person, but it ranks 136th in the human development index meaning that its education and health outcomes are still pretty miserable. It has not yet turned its oil and gas earnings into real benefit broadly for the society.

Another example is similar, Angola. Angola is a country in Southwest Africa, also a major hydrocarbons economy. Also with the opportunity to take those earnings of oil and gas and convert them into broad based improvements of living conditions. But, there has been a serious gap, and a lot of corruption along the way. So that Angola ranks in the middle of the pack, 88th in the gross domestic product per capita, but 148th in the human development index.

So you see that the human development index adds a lot of useful information for us by giving us a broader based snapshot than taking the gross domestic product per person alone. If you flip it around and ask about countries that are ranking higher on their human development than on their income per capita, the reverse of the phenomenon that we just saw an Equatorial Guinea and Angola.

You could look to a country like Sri Lanka which traditionally, even though it’s had a lot of violence and upheaval, has had relatively high social indicators of health and education even at a relatively low level of domestic product per person. Another country quite developed at this point. A high level of gross domestic product per person, but even a higher human development outcome is South Korea.

South Korea is an amazing country. It’s had a huge success in economic growth, meaning that the GDP per person has soared over the last half century. Its become one of the richest countries in the world. But part of that has been an incredible focus on raising education standards and on the health of the population. So that as high as South Korea now ranks in the GDP per capita, roughly around 30^th in the world, its ranking in human development is near the top of the world’s charts roughly around the 12th position in HDI.

So this has been a quite useful expansion of our ability to assess and categorize countries, because just as the World Bank categorizes countries as high income, middle income and low income, the United Nations has categorized countries as high human development, medium human development, and low levels of human development.

But there’s another absolutely fascinating way that we can attempt to assess well-being. And you think about it for a moment you say, hey, why not? And that is, ask people. Ask people about the quality of their lives. Are they satisfied with their lives? How would they rate their lives in terms of a a, a ladder where the top rung of that ladder would be full satisfaction, the bottom rung of the ladder is feeling pretty glum.

And asking people where they stand on that ladder of life say between the lowest rung of zero, and the highest rung at ten. In recent years there has been a huge, absolutely fascinating effort to assess well-being in that straightforward way. Asking people, are you happy in essence?

And it’s important to note that psychologists and, and scholars of happiness have found two quite distinct dimensions of happiness and two quite different kinds of questions to elicit that. One is to ask, emotionally, did you have a good day yesterday? Were you happy? Positive emotions and that’s sometimes called emotional or affective happiness. And the other is to ask people a quite different kind of question. How do you evaluate your life? Are you satisfied with your life? Where would you put yourself on the ladder of life? That’s called evaluative happiness. You’re evaluating life. And that’s the kind that I think we should look at to try to understand where countries and individuals feel they are in the path of broader economic development.

We have a map. We can look at the distribution of reported happiness in that evaluative sense, in the sense of life satisfaction around the world. One thing you do notice, richer countries tend to be happier. But that’s not all there is to happiness. There are countries that are middle income countries close to the top of the charts. There are richer countries at the top of the league in GDP per capita but not so happy and we learn a lot from this.

Looking at this I’m happy to say that the Americas, that’s my part of the world, that’s a pretty happy part of the world. You can see it in, in the maps. Western Europe Australia and New Zealand rank very high on happiness. Some of the poorer regions perhaps not surprisingly rank much lower.

What do we learn when we study the differences of happiness in this evaluation sense around the world? We find out that income per person, or GDP per capita, matters but it doesn’t matter all that much. We have to keep focused that it’s just one aspect of happiness.

A second major reason for happiness or unhappiness is the quality of what we call social capital, social connections. Do people have good networks of friends and colleagues? Do they trust others in their community? Do they trust their government to be honest or is their government corrupt? That’s a huge determinant of whether people report their lives to be of high satisfaction or not. Their own health, physical health and mental health, of course, plays a very important role.

And what I find absolutely fascinating and important. A theme that I want us to reflect on as we think about sustainable development is that an individual’s values, things that an individual holds to be important, are shown to be strongly related whether that individual is happy or not. Interestingly, the people who report a very strong fixation on getting rich, on very materialist values, turn out to be a bit more frustrated. They don’t report as much satisfaction in life. People who report that generosity is very important to them, volunteering, giving, a sense of altruism, contributing to the community are also values that are shown repeatedly in many studies to be related to a higher level of life satisfaction.

This is quite important for us as we think about sustainable development. If we simply pursue income per capita. Just raise that gross domestic product per capita no matter what. We’re going to lose it on many counts. Societies will become highly unequal. The physical environmental will come under great threat. But also people will not necessarily achieve the kind of happiness and life satisfaction that they want.

If we take a more balanced and holistic approach as sustainable development bids us to do. Paying attention to higher income per person, but also focusing on healthy societies, social inclusion, honest government, networks of social support. And if we promote values of generosity, of compassion, of voluntarism rather than values of strong materialism, of just trying to get rich, that also can help people to become happy.

In the end, our goal is satisfaction with life. It is human well-being. We need to take a rich and varied perspective. Fortunately we have more and more tools to be able to measure, assess and ultimately to help to promote improvements of human well-being in this deeper and more inclusive sense.

Lectures / Readings

Economic Development – How We Measure It, How It Varies Around the World III

31/03/2015 Pedro Pereira Leite Deixe o seu comentário

Income Inequality Within Countries

We’re interested in economic development. We measure that in shorthand as the gross domestic product per person. But we’ve noted that the variation in incomes across households within a country across individuals within a country can be very large. So we have to take into account not only the average level income, but the inequality of income within a country. You all know the famous quip of the man whose feet are on fire, whose head is on ice, and he’s asked how’s the temperature? He says on average it’s fine. But of course it’s devastating with the inequality of fire, and ice. And societies can be like that also.

On average income can be just fine. But if income is just fine because a few people are, fantastically rich, and the rest of the country is excruciatingly poor. It’s not so fine, after all. And so in addition to measuring, the average level of development as the gross domestic product. Per person, we want to find ways to measure the inequality of income within the country.

There are several indicators that are used. We can look at the ratio of incomes of those at the top of the income distribution. To those at the bottom, sometimes we look at the, income of the top 20% of the population compared to the income average of those in the bottom 20% the poorest 20% of the population. Another measure that is quite useful a little bit fancier. Is a measure called the GINI coefficient, it’s a measure that varies between 0 and 1, 0 meaning complete equality, everybody has the same income and 1 is exactly the case of one person in the country having everything.

You know the king, the potentate, he owns everything and everybody else is completely impoverished. They have nothing. They would be a GINI coefficient of one. Of course, real societies aren’t at 0 or 1, they’re somewhere in between. Societies that we would regard as. Rather equal with the broad middle class. A lot of countries in Scandinavia, for example, have a GINI coefficient around 0.25. Whereas countries that are much less equal. Where there really is a lot of wealth at the top but then a lot of poverty alongside it, might have a GINI coefficient not of one, the pure inequality, but a GINI coefficient around 0.5 or 0.6, and so that’s the variation.

It’s an extremely useful measure. We can put it on a map, and have a look at where inequality tends to be high, and when inequality tends to be relatively low. The lowest inequality tends to be in. Western Europe and especially in Scandinavia I mentioned. Countries like Sweden, Norway, Denmark, tend to have relatively equal income distribution, a broad middle class. Not so many super rich and basically no super poor. And you see on the map the, the light shading of those countries indicates a quite low GINI coefficient. Canada is similar.

The United States, if you look at just south of Canada. That’s shaded in red. The US is quite unequal in income distribution compared with Canada or Western Europe, and especially compared with the countries in Scandinavia. In the United States we have a lot of super-rich, more billionaires than in any other part of the world, and we have a lot of very poor people, maybe not as excruciatingly poor as one would find in the least developed countries, but relative to the billionaires, poor people in the United States really don’t have very much at all. You can see looking at this map a very interesting phenomenon that most of the Americas, with the exception of Canada. It is shaded in red and quite unequal. The Americas as a whole, both North America and South America are relatively unequal societies. Africa for the countries where we have the data. Also, rather unequal and in comparison, for example, with the India or other parts of South East Asia. Africa tends to rank relatively high in inequality.

China was quite equal. In its poverty 50 years ago but with a lot of economic development with a widening of the gap between those living in the urban areas doing rather well and those living in the rural areas remaining still rather poor. The inequalities in China have risen to levels similar to those of the United States and that means on an International comparative bases, a relatively high degree of inequality.

Now, it’s interesting to look in a little bit more refined way at this GINI coefficient among the high income countries. Because it shows us that there are different pathways to economic development. Getting richer doesn’t mean necessarily becoming more unequal, nor does it guarantee becoming less an inequality, or more equal.

There are different pathways for development. Northern Europe has chosen a pathway of becoming wealthier with a lot of social equality. Whereas the United States has been on a path of rising incomes alongside rising inequality. If you look at the Gini coefficient across the high income countries in this bar chart, you see countries like Denmark and Norway, Sweden, with the lowest Gini coefficients and it.

Those with the highest Gini coefficients it, countries eh, like the United Kingdom, Israel, United States, Turkey, Mexico and Chile. Countries with big gaps between the rich and the poor. How do we explain these gaps?

Well, this is a very complicated challenge and it is of course contentious issue, as well. There are many reasons for inequality that we want to direct attention to, to make sure that we don’t treat such a complicated challenging device of topic.

In a simplistic manner, because history plays a big role, geography plays a big role. Government policy plays a big role. Let me mention a few of the causes of inequality or reduced inequality across countries. Traditionally, the size of land holdings made a big difference. Some countries especially in the America’s had huge farms. Huge haciendas often taken by the European settlers who came to the America’s, and they often displaced indigenous populations. They often brought in slaves actually to work those large farms And so while there were some with huge land holdings, there were others that were landless, or, so displaced from the land. And in traditional societies were agriculture’s so important, the size of land holdings is a crucially important dimension. Of inequality. Variations in education levels are a very important source of inequality. Those young people who are lucky enough by dent of their own hard work or their family’s support. Usually a combination of the two, to be able to get higher education. That higher education will translate in the modern economy into higher income levels as well. Whereas kids that are unlucky growing up in very poor families, very poor communities and aren’t able to make it through to higher levels of training. May get stuck with the very low income levels, so in, their employment. So education, can become an equalizer if everybody has the opportunity, but it can also become a source of inequality as well.

I mentioned earlier that the world urban divide is key. Families that move to urban areas often find better employment prospects and higher incomes. Those left in villages as small holder farmers often eek out survival in a lot of poverty.

Discrimination matters tremendously of course, still in this world. Women all over the world are not given the same chance as men in the labor market. They don’t earn the same incomes, even when they’re doing the same job or better. They face a discrimination that is deeply entrenched even though fortunately it is, being reduced in, in many places. racial, minorities ethnic groups that are minorities, the religious groups that are minorities often face terrible conditions in the labor market. Not able to get education, not able to get the kind of employment that they would deserve. If they were treated fairly.

Government policies make a huge difference. Corrupt governments that collect big,rents on, oil holdings or diamond holdings or other mineral deposits in the country and then use that income for a very small class of insiders. And maybe for those in power, the royal family, the the politicians, the political class, can create a huge amount of inequality. Often countries that live off of a few mining resources, oil, gold, diamonds, are very unequal because of the ways that That, that government revenue is allocated. At the same time, governments can be great equalizers. If governments collect revenues and then ensure that the poor can go to school, that poor people can get access to health care, that everybody has a chance, that poor families are given some income support as they are in Scandinavia. To ensure that their children will have a good chance, then governments can narrow the income inequality as well.

Let me turn back to why the Americas are relatively unequal. Well, they were settled by conquest. European settlers took the large landholdings. European settlers brought in slaves. European settlers displaced. Indigenous populations. Over time, those forces turned into different forces. The descendants of Europeans today tend to have better educational opportunities. But, as democracy has come to the Americas, there’s also a very powerful trend Of equalization taking place in at least some countries. More kids able to go to school, governments leaning towards social inclusion rather than away from it as was historically the case. In sustainable development, not only do we try to understand inequality. But we hold it as one of the goals, that there should be social inclusion in economic development, and yet at the same time the forces of politics, the forces of market change, the forces of trade and globalization often favor the rich who are able to use those forces to their advantage.

So that the rich tend to get rich and the poor even poorer. That’s our battle and that’s our challenge. Understand the inequalities of income within societies, find ways as those impressive societies in Scandanavia have done to ensure. A big middle class, and a chance even for a child born into a relatively poor family, and that can become the path to social inclusion, one of the pillars of sustainable development.

Lectures / Readings

Economic Development – How We Measure It, How It Varies Around the World II

31/03/2015 Pedro Pereira Leite Deixe o seu comentário

Urban/Rural Inequality

We’ve looked at gross domestic product per person as a, pretty good summary measure of how to categorize countries in, economic development. But that’s an average for countries. Countries have great variation within them and it’s very important, especially in view of our commitment to social inclusion, to broad-based prosperity to understand the variation and the inequalities within countries. Perhaps the starkest kind of variation within countries is the difference of rural and urban life.

In almost every country in the world with just a few exceptions parts of the population live in. Rural areas, other parts live in urban areas and often their lives are very different. And, since many countries are in a transition, moving from rural to urban life, it’s quite important for us to understand the differences of the rural and urban living.

What it means in terms of well being. Income levels kinds of activities. The starting point for us is that, before the industrial revolution, before the era of modern economic growth, virtually the entire world lived in rural areas. Perhaps 90%. Even more of the world’s population were small holder farmers or peasant farmers eking out an existence by trying to grow enough food for themselves, their families and perhaps for the marketplace each year. And we know that when we think about that era, we could think about bucolic. England we see it in the great masterpieces of the 16th and 17th century landscape painters, but we can think about the countryside as characterizing if, almost all of the country. And that kind of rural scene.

Is still very familiar in many parts of the world. In Africa as, in this village site in Malawi and of course in many rural areas of small holder farmers. Rice patty farmers all through Asia. But more and more, the world looks like this. Whether it’s the huge crowds of Seoul, South Korea New York City skyline, the bustling crowds in Beijing. The world is becoming more and more urbanized, and this is changing lives in fundamental ways. It also leading is leading to vast differences. And big inequalities within countries as well. What do we mean by urban?

You’ll be surprised to know, there is no official definition of what it means to be an urban area. Generally, the United Nations, which keeps the books on the proportion of the world that’s rural and the proportion of the world that is urban.

Relies on national definitions which differ across countries. Generally speaking, an urban area is a place where a few thousand people live in a relative, densely settled area. Of course, up to millions of people living in a densely settled area. But, that minimum threshold, whether it’s 2,000 people, or 5,000 people that defines what’s urban versus what’s rural depends on each country.

The difference between rural and urban has some pretty basic points to it that are very important for us to remember as we think about the process of economic development. And as we think about the nature of inequality within countries.

First huge differences what people do in rural areas versus what they do in urban areas to earn a living is quite distinct, overwhelmingly people living in rural areas are in farm families generally. These families own some land or work some land, and agriculture is the mainstay of rural areas, whereas industry and services are the mainstays of urban areas. What that means is that as. Countries experience economic development with a rising proportion of the population in urban areas and a shrinking proportion of the population in rural areas.

That also signifies that a rising proportion of the labor force, of the workers, are in industry and services and a declining proportion. Are in agriculture. This is a nearly universal trend as part of the process, of gross domestic product per capita rising, a rising share of the population, working in industry and services as opposed to agriculture.

Generally speaking, though it can vary, rural areas are poorer. Than urban areas. So income per person tends to be higher in urban areas than in rural areas and that’s one of the magnets that is pulling people in migration children of farmers that are moving from the farms to the cities in search of work. And higher incomes.

Generally the location of rural and urban areas differs when you think about it. Urban areas tend to be at the coasts. They tend to be where it’s easier to engage in trade. Whereas rural areas tend to be where it’s propitious to grow food often. In the interior of the country. So, even the balance of rural and urban is also, typically, a balance of interior and coastal orientation of the country.

Of course, population density, very different. It’s low in rural areas, a high land to person ratio. Whereas the land per person in an urban area can be very low, urban areas can be packed with the thousands of people per square kilometer. The quality of public services tends to differ it’s harder to provide electricity, piped water sewerage systems in rural areas where populations are disbursed. Relative to urban areas. This is one of the reasons why income levels tend to be higher in urban areas.

And one other factor that is quite notable is that the fertility rates meaning how many children note woman tends to have on average in this society tends to be higher in the rural areas then in the urban areas. There are many reasons for this, but one is that children are often seen as good economic workers for the farm, where as in an urban area, children are expensive. Children are going to school, not working on a farm, and the result is that often when households move from the rural to urban areas they also choose. To have fewer children.

Now, if you look at the map of the proportions of populations in urban and rural areas, it looks a bit like the map of income per person.

The richer parts of the world tend to be more urban, the poorer parts of the world tend to be more rural. But looking at the map you can notice a few things.

First, the Americas both North and South America, very highly urbanized societies. 70 or 80% of the population. Again tropical Africa still quite rural, perhaps 65 or 70% of the population living in rural areas only. 30%, or so of the population living in urban areas. One thing that is for sure, though, everywhere in the world, urbanization is proceeding rapidly. It’s part of the economic development process, and if you look at the map of the growth rates of the urban areas, that is the. Annual proportionate increase of populations living in urban areas.

It’s actually in Africa where urbanization rates are extraordinarily high. Sometimes urban areas growing 5% per year. How long does it take for an urban area to double? If it’s growing at 5% percent per year. Remember the rule of 70 that I entioned earlier? Divide 70 by 5%. That’s 14. It’s 14 years then for an urban area to double. For a city of 1 million that’s growing at 5% per year to become a city of 2 million.

That’s a pretty short period of time. You can see that the growth rates of the rural areas is extraordinarily high. The worldwide trend, is for urbanization. On net, as the world’s population grows, another billion people by 2025, another 2 billion people. Roughly by 2045, on average that additional 2 billion of world population taking us from 7 to 9 billion will be an extra 2 billion in urban areas.

Because the world’s rural population has probably peaked at this point, it may even be declining in absolute numbers, whereas the world’s urban population is going to continue to soar. And the proportion of the world living in urban areas is going to rise from the current proportion of roughly half and half, 50 %, to perhaps 70% of the world living in urban areas.

By around 2030, you can see that environmental sustainability healthy cities, are going to be a core challenge of sustainable development, and as that process of urbanization takes places. The country side is also transformed. You look at a country like the United States where the rural population is maybe only 10 to 20% and where the farm population is only around 1% of the entire labor force. Farmers are very efficient working huge farms like you can see here in a wheat farm of huge dimensions in the American Midwest, whereas in today’s rural and poor countries you have farmers working very small plots. As the populations move to urban areas. A number of those farms are going to become much bigger more industrial type of farming less of the small holder farms and the peasant farming that has characterized these countries till now. So this is, in short, one of the big divisions within countries, the rural. Urban divide.

The process tends to be in one direction. The arrow is pretty strong from rural to urban in the process of economic development. Along the way, societies are divided. Cultures are divided. A lot of urbanization though is associated with higher incomes, better public services. Better education, declining fertility rates, and that is a pattern that we see in many parts of the low income and the middle income regions of the world.

Lectures / Readings

Economic Development – How We Measure It, How It Varies Around the World I

31/03/2015 Pedro Pereira Leite Deixe o seu comentário

Incomes Around the World

Sustainable development we’ve seen has three major aspects, economic development, broad-based inclusion and environmental sustainability, all supported by good governance. But what do we mean by economic development?

I want to introduce the main concept of how we measure economic development. Of course, there are many different aspects of a true and proper understanding of economic development, but we tend to use a short hand, and that is called the gross domestic product of a country. The gross domestic product has three words and three concepts in it. It means the total production taking place within the geographic boundaries of a country in a given year, so the gross of the gross domestic product means you’re measuring everything that is taking place within the country. You’re not taking into account in that measurement the depreciation of capital and so forth which would give us a different concept called net domestic product. Domestic signifies the fact that we’re talking about a geographic area, and we’re concerned with how much economic activity or production takes place within the boundaries. Of course, usually we’re talking about a country, but we could be talking about the production of a city or a region. And sometimes of course, we also want to talk about the gross world product which is adding up the domestic production across all of the countries of the world.

And product, or production, signifies the fact that what we’re interested in measuring is not the accumulated wealth, the wonderful buildings and monuments and roads and infrastructure, the natural beauty, of a country, which may tremendously raise the quality of life. We’re interested in the actual flow of production in a given time period. Now, for most purposes we look at a year, though when policy makers are trying to understand short term dynamics of unemployment and production, they’re interested often in measuring the gross domestic product even over a quarter of a year. We’re going to look at national measurement or countries. We are going to look at the annual measurement.

Now, one more critical point about measuring the gross domestic product. In general, we are interested in getting a sense of the standard of living of a country, and to do that we take the total production in the country over a given time period, usually the year, and divide it by the population so that we’re interested in the gross domestic product per person, or per capita.

Why is that? Well, of course, larger countries produce more because there are more people. There are more workers, but if we simply were to compare countries in terms of the total production, we’d find that highly populous countries would have higher production but we wouldn’t learn very much about whether the living standards of those larger countries is really higher than the living standards of a small country, which may produce a little bit but quite a bit for each person in the economy.

So when we think about economic development, we tend to think about the gross domestic product per person. Let me emphasize again. That’s not really a comprehensive measure of economic development. We want to know whether people are healthy or not. We want to know levels of education.

We want to know other indicators of well-being, but as a shorthand, when I want to get a sense of a country’s overall level of economic development, I start by looking at the gross domestic product per person because it’s going to be a pretty good indicator of where things stand. And indeed that’s what the keeper of the accounts, which is the World Bank, does.

The World Bank keeps very systematic tabulations on gross domestic product per person, and it classifies countries in a way that is also extremely helpful for us. The World Bank gives three categories of countries, high income countries, middle income countries and low income countries, and it puts each nation into one of those three bins, depending on its measured gross domestic product per person.

Roughly speaking, a low income country is a country where the domestic production per person is at a level below a threshold of about $1,000 per person per year. In other words, roughly $3 per day, and a middle income country is a country that is in a band between $1,000 roughly per person and about $12,000 per person per year. And the high income countries are countries that are above the $12,000 per person threshold. There are then refinements. The middle income group which is quite a big one, is divided between the upper middle income and the lower middle income, with the dividing line of about $4,000 per person per year.

The World Bank categories provide us with a, a useful depiction, a, a good map of the world, and if you look at the map in front of you, you can see that those few areas that are shaded blue are the high income countries, the US and Canada, Western Europe, Japan and Korea, Australia, and New Zealand, and a few other parts of the world. Add up the population of that high income group, and you find that it’s about 1 billion of the roughly 7 billion people on the planet.

So it’s about 1 in 7 in the world, roughly 15% of the world’s population living in high income countries. Then take a look at this large middle group of beige colors, and you see that that covers a wide expanse of the world. And indeed 5 out of 7 in the world’s population, roughly 5 billion of the 7 billion people on the planet, are in the middle income category. So that’s a big middle, and that’s divided between an upper part and a lower part, roughly half and half. Approximately 2.5 billion people in the upper middle income category and about 2.5 billion in the lower middle income.

Then look at the countries shaded red. Those are the poor countries, the low income category, and by simple arithmetic, we can say that 7 billion minus the one in the high income, minus the five in the middle income. That leaves about 1 billion people approximately living in the low income countries.

We’ve already noted that the low income countries are heavily concentrated in tropical Africa and in South Asia, with this scattering of low income countries in other parts of the world, but in our world today, the poorest countries in the world are concentrated in these two regions, and most of the world’s poor people therefore live in those regions where the countries are in the low income category.

Now, let me mention one more category. It’s not a World Bank category. It’s a United Nations category but also very important for us to remember. Even within the low income countries, there are distinctions. There’s a subgroup within the low income countries that’s in pretty desperate shape.

Not only are they poor, but the human conditions of disease, of education levels, of social instability, are very bad. And moreover this subset of countries is highly vulnerable to droughts, to floods, to conflict, to, to violence. So these are a group of highly vulnerable, very poor countries, and the UN has classified them as the least developed countries. There are about 50. Right now the list is 48 but it goes up and down depending on how countries are performing. Among the least developed countries, the poorest of those are again heavily concentrated. You see that in tropical Africa there’s a large number of least developed countries.

There are several in Asia, and if you look closely at the map, you’ll notice something very telling for us. Afghanistan, Nepal, Bhutan, Laos, landlocked countries. This is not by accident. We’re going to see that economic development depends on international trade. Being landlocked is a problem. You’ll also notice a number of small island economies in the Pacific, and also Haiti. Small island economies also can be quite vulnerable and part of the least developed countries.

We know what these categories look like. Intuitively it’s good to remember London and my own hometown New York City among the high income countries. Middle income countries, io or San Paulo in Brazil, where you have a tremendous amount of development and wealth, but you also have the foreign, the slums. Countries that are in the middle of the pack often doing very well in raising income levels. China, another major world economy that is a middle income country.

The poor countries, we know what they look like also because they’re more rural. Small holder farmers. Peasant farmers scratching out a living and hardly making ends meet. And for the least developed countries, Somalia, unfortunately in its tragedy in recent decades really a clear example of what it means to be among the poorest of the poor and not only desperate poverty, hunger, lack of education, low life expectancy, but lots of violence and lots of political instability as well. Let me mention one more important detail for us in terms of measurement.

For everything that I’ve said so far in measuring the gross domestic product, the total production is added up and divided by population to get the gross domestic product per person, and since countries have their own currencies, they have to be converted to a common standard. And so the exchange rate is used to convert the national currency into a common, typically U.S. dollar standard, and that’s how we make the comparisons in a common currency.

But there’s another translation that can also be useful. I want you to be aware of it because we will be referring to it many times, and that is to make one more adjustment for the difference of costs or prices in different countries. If you buy an automobile or a television set almost anywhere in the world, price will be fairly similar because these are goods that are traded internationally, and they have a similar price when expressed in dollars in any part of the world.

But if you go to rent an apartment or get a haircut or go to a movie or park a vehicle in the center of town, you’ll find the difference in costs extraordinary. In London or in New York or Tokyo or Paris, the prices would be sky high, but in a poor setting in Mogadishu or in Akrah or in, Bamako, Mali, the price of a haircut might be a 20th or a 50th what you’d, pay in a salon in Paris. So one has to take into account that simply measuring the output and converting to dollars might not give a full comparison because the purchasing power in a poor country might be a little bit higher than is indicated, so we often make one more adjustment called purchasing power adjustment, or purchasing power parity to take into account the relative price levels.

When you do that you find that poor countries are still quite poor, but they’re not quite as poor as they look. Take a case of a country like Malawi, a poor country landlocked in tropical Africa. Measured in the market prices and market exchange rate, its per capita income is around $250 per person per year compared with $50,000 per person per year in the United States. Malawi’s extraordinarily poor. Adjust for the lower costs of living in Malawi, and you find that Malawi’s still very poor, but maybe the income with the purchasing power adjustment should be around $900 to $1,000, roughly 4 times higher than simply using the market prices. So thats a system called purchasing power parity, measures of gross domestic product per person.

It’s a lot of words. It’s a lot of concepts. The main point that I am stressing is that we measure economic development in short hand by the gross domestic product per person. We adjust obviously for population. We adjust for currency, and very often we want to adjust for the different price levels. Then, we can classify countries, and we can study the question, why are countries at different levels of development? How do those different levels of development relate to other things that matter a lot for people, their health, their well-being, their happiness, and what can countries do that are at the low end of this curve, the least developed countries and the low income countries, to raise their living standard to achieve economic growth, that is a rise of gross domestic product per person? Fast enough to narrow the gap significantly with the wealthier and the higher income countries. That of course is one of the key challenges of sustainable development.

Lectures / Readings

What is Sustainable Development? V

31/03/2015 Pedro Pereira Leite Deixe o seu comentário

Business as Usual Versus Sustainable Development Paths

One part of sustainable development is to understand the inter-linkages of the economy, of society, of the environment, and of our politics and government processes, and the other part of sustainable development to do something about it.

We will examine over, you know the coming talks, two different scenerios for the future of the world. One, which I will call business as usual. If we continue more or less on the course that we’re on right now. What kind of world we could expect in ten, 20, 30, 40 years? It’s not all bad. Because, after all, many wonderful things are happening on the planet. Poverty has been declining. Technologies have been advancing. But, there are a lot of risks with business as usual. Especially in the age of the Anthropocene, especially as we trespass planetary boundaries, especially as we see growth that is not inclusive, and leaving large numbers of people behind.

So we want to contrast the business as usual, or BAU path, with a truly sustainable development path for the planet. What would a business as usual path look like? It’s not all terrible. For many people, especially comfortable people of, at the top of the income heap, they say business as usual, looks pretty good to me. The world economy is expanding, life expectancy rising, infant and child mortality falling. One could say, not bad. If we get business as usual, no disaster. I think the problem however, is that that’s a little too optimistic a view of what we really face. Sure, business as usual offers more economic growth, but is it fair and inclusive? How many people will be left behind? What will happen in societies, as we saw in Rio, where the favelas, the slums, are right up against, the modern, and wealthy part of Rio. What happens in those parts of the world really left far behind.

The peasant farmers in dry lands facing more and more droughts. Places that find themselves vulnerable to ever more flooding, but are too poor to do something about it. We know that all too often, the result isn’t merely protest, the result can even be violence, and especially what happens if we just go on our merry way, thinking that we can produce more, have more cars, burn more coal, oil, and gas. Put more carbondioxide into the atmosphere. Cut down more trees. Acidify the oceans. And not respect the planentary boundaries. There I think, we are surely going to get our comeuppance in ways that we really are not very clear about right now, certainly not in our broad, public discussions.

Because the environmental dangers are vast. They are so large, they are coming so fast, they’re so threatening that they could upend the very process of economic development itself. What seems like a pretty safe course of economic growth could turn out to be evanescent. Swept away in floods, withering in droughts, in massive heat waves. A loss of quality of life. Even a massive loss of production, a growing food insecurity that could threaten the entire world. So business as usual, that’s what you see in front of you. Pipelines carrying oil or gas, to, power plants, to factories. Fossils fuels have been a great part of economic growth ever since the invention of the steam engine powered by coal in England in the 18th century. But, by using so much of it, by putting so much carbon dioxide into the atmosphere by deranging the climate system, this kind of business as usual, poses an enormous threat. Now we’ve gotten pretty good at finding new sources of natural gas, hydro fracking. New sources of oil, new ways to produce oil such as in Canada’s tar sands, a place that you see in this picture, criss-crossed by roads.

Massive use of water and land to dig out this heavy oil that needs a special kind of processing and that of course, would have a market around the world, but at what cost? At what cost to the environment of Canada, where you see how polluting these processes are. What cost to the world’s environment? As these tar sands and other fossil fuels are burned in such vast numbers that they derange the climate.

Will we see more massive drought in the Sahel? A drought that was so severe, covering Chad and Mali and neighboring countries, that it led to tremendous amounts of violence, contributed to the outbreak of war in Mali and in continuing violence in other places. Droughts like this affected many parts of the poorest countries, will we see more of that?

And of course, if economic growth is not perceived to be fair, if the rich get richer and the poor get poorer, if the poor feel left behind and cheated by those at the top of the heap, will we see more unrest, more instability. We know it from New York City where we saw the Occupy Wall Street movement.Protests against what the protesters called the top 1%, and calling for legality and responsibility on Wall Street after the devastation of the 2008 financial crisis.

But these street protests weren’t just on Wall Street or in other parts of the United States. In Tunis in 2011 in Cairo, in Athens, in Tel Aviv, Chile, Madrid, Istanbul, Rio de Janeiro. Cities around the world, there have been growing street protests, protests mostly led by young people. Protesting high unemployment, high income inequality, corruption in government, lack of accountability, lack of transparency, is that the kind of business as usual path that we want?

We study sustainable development because we can do better, by understanding technology, by understanding the interconnections of economic, social, environmental and political systems. What you see here is an example of innovation in the Netherlands, one of the most sustainable countries.

This innovative building called the whale is a highly innovative architecture where the tenants enjoy sunlight, open space and a building has been built in harmony with the natural environment. Half of the world’s population today lives in cities. That will rise to perhaps 70% in cities by the year 2030.

Vastly more than half of the world’s economy is in cities, so a great deal of the path to sustainable development will be through sustainable urbanization. Smart cities, smart architecture, smart systems of transport, of power, of water use. Of recycling of wastes that cities can achieve when they put their mind to it. Paris, perhaps, on everybody’s list, among the favorite most beautiful cities in the world. We see the, the new innovation of bicycles in the cities. People want to be out bicycling in cities. Massive congestion. Massive pollution not good for our physical health. So walking and bicycling will necessarily become more important technologies of the 21st century. And I’m happy that in cities around the world, that there is a return to bicycling, using clever shirt, the bicycle systems, new walkways, and places where people can improve their health, because city is a, can be places where the obesity epidemic and, and poor health take hold. In Bogota, there were great innovations in using rapid transit, and bus systems to move people much more cleanly and effectively than individual car ownership. And congestion was reduced, pollution was reduced, carbon dioxide emissions were reduced, another example of how innovation in transportation can make, a very big difference for the future.

And, look at these two examples of, so called, self-driving vehicles. Using the revolutions of information technology, cars themselves, detect other cars, detect pedestrians. And the cars, are able not only to drive themselves but to offer a much more efficient mode of transport. Well, who knows what technology will bring but we can see that one of the pathways to sustainable development is through smarter technological systems. Converting automobiles from the internal combustion engine, which burns petroleum, to electric vehicles charged by electricity produced by clean energy, could be one of the most effective ways to reduce the carbon dioxide emissions in the future. And to get that clean electricity, we need to move off of our addiction to fossil fuels, to coal, oil, and gas. And to move to what technology is now offering, much lower cost and effective harnessing of nature’s own energy sources, especially solar power and wind power. In many parts of the world, solar and wind power are already at grid parity.

What does that mean? It means that they are already, at an economic cost, competitive with more traditional, fossil fuel based energy systems. This is a picture of a solar thermal concentrator and collector, where you see large mirrors set up in a desert region to collect solar power, that turn it into energy for electricity production. There are many ways to do it. It could be photo-voltaic cells, we’ll look at later on, it could be concentrated solar thermal energy where you use the heat that’s produced to boil water, to turn steam turbines to produce electricity. Exciting technologies but what they mean is ways to rid ourselves of the addiction to fossil fuels which have brought us a modern economy to be sure. But have now put us in danger because of the rising CO2 levels.

And the advances are, not only in information technology, better urban design. Clever architectures, smarter grids, smarter transport systems, renewable energy. But breakthroughs in agronomy, in biology. You see here a site testing a new kind of rice, which is bred through special breeding processes, to be able to resist flooding, something that obviously will be very important. Afford the farmers, in Bangladesh for example, where this new kind of rice has been shown to be highly effective when normal fields are flooded the rice dies. But by breeding rice in ways, that that have what includes gene patterns that allow the rice to survive submergence and flooding. You save lives, improve food security, and find ways to sustainability.

So this, at the essence, gives us a hint of what a sustainable development pathway might mean. Business as usual, we know a lot about that. And we see more and more how risky it can be. A sustainable development pathway, the core features of that would be societies that ensure that all parts of the society. Girls as well as boys, women as well as men, and minorities all of different regions, all children have access to a healthy start in life, to good nutrition and healthcare, and especially to the education that they will need to be productive. And skilled members of their society both in the labor force and also as citizens. A good start means inclusion and it means avoiding these mass inequalities of wealth and poverty that afflict the planet. Sustainable development will mean a new kind of urbanization. Smarter cities, new transport systems, smarter power grids, fed by renewable energy rather than by traditional fossil fuels. New kinds of vehicles, public transportation, or bicycles, and walking that can also keep us healthy. New ways to build buildings that are much more energy efficient. And much more pleasant and consistent with the, with nature.

At the essence of sustainable development, is problem solving. We have a lot of problems. We’re going to need a global effort. In a focused and relatively short period of time. A matter of decades, not centuries. To move from the business as usual trajectory to the sustainable development trajectory. And in order to accomplish that, every part of the world will have to be involved in brain storming in determining new and creative ways to ensure inclusive and sustainable growth.

That’s going to be your job in the coming years, and that’s going to be our task in the coming sessions, where we investigate what those problems are, what their core features are and what innovative new design can mean, to enable us to choose that path of sustainable development.

Lectures / Readings

What is Sustainable Development? IV

31/03/2015 Pedro Pereira Leite Deixe o seu comentário

Environmental Threats

One of the most important messages of sustainable development is that we’ve become a threat to ourselves. Economic production has become so large, our productivity in many ways so high, and the numbers of us on the planet so vast, that the effect of all this economic activity on the physical Earth itself has become overwhelming.

For the first time in human history, for the first time in the planet’s history, one species, that would be us human beings, are threatening the fundamental parts of the Earth’s own dynamics: the climate system, the water cycle, the nitrogen cycle, the ocean chemistry. Think about the basic arithmetic.

There are 7.2 billion of us on the planet now. On average, each individual is producing around $12,000 of output per year, rough number, averaged over the whole year. But with 7.2 billion people, an average of $12,000 per person, it means that the world economy as a whole, has an output of between 80 and 90 trillion dollars per year.

Many times larger than ever in the past and continuing to expand rapidly. And the result of all of that, in the water we are using, the energy that we are burning, the land that is being devoted to feeding the planet, the chemicals that are being produced, and the pollution that results from that poisoning the air and the waterways, it’s leading to an unprecedented environmental crisis. One of things that’s notable about this crisis, is that it’s felt by rich and poor alike. Have a look my own city, swimming for survival during this super storm that we experienced in October and November, 2012, what we called Hurricane Sandy. But halfway around the world the same year, Beijing experienced massive flooding. Or take a look at Bangkok, in the astounding floods of October, 2011: again a major world city underwater, deluged by unprecedented rains and as in all of these cases, a huge setback for the economy, loss of life, massive loss of property, billions or tens of billions of dollars of damage, and an unsettled global economy, because a disruption in one part of the world, in a world of interconnected production of supply chains that stretch across the world. Mean that a flood in Bangkok can disrupt automobile production, or computer production, all over the world, because of components or factories that can’t get to market during these disasters.

The kinds of disasters that are being felt are varied, but what is clear, is that they’re rising in number. What we call hydrometeorological shocks or disasters: water, and weather related, whether it’s deluges, extreme storms, hurricanes and typhoons of, huge, impact, storm surges and floods, as swept over Manhattan or Beijing, or, Bangkok, massive droughts, droughts that lead to, the remarkable and shocking phenomenon you see here, of, terrible forest fires that spread across the American West in 2012.

These kinds of varied storms, shocks, heat waves, droughts, floods have become the new normal for the world. In fact, it’s part of a world that is so new, and so tark that the scientists notably the geologists, have given our age even a new name. They call it the Anthropocene. A new word that comes from its Greek roots, anthropos and cene, anthropos meaning human Cene meaning epoch or age of the Earth. And what the scientists are telling us is that this is the human age of the planet. They don’t mean that in a good way. They mean it in it’s uniqueness and in a very dangerous way that humanity is changing the water cycle, the climate is warming the temperature is melting the glaciers is threatening the great ice sheets over Antarctica and Greenland, is causing the oceans to become more acidic, is threatening other species with survival in such a fundamental way that the planet behaves differently now, even from a geologic point of view, hence, the Anthropocene.

One of the main drivers of these changes is humanity’s massive use of coal, oil, and natural gas, the three energy sources we call fossil fuels. When we burn coal, oil, and gas to move our cars, heat our buildings, drive our industrial production, produce electricity, we end up with carbon dioxide emitted into the atmosphere. And carbon dioxide in the atmosphere changes the climate. This stark graph, which we will revisit, later on, shows the cycles of carbon dioxide concentrations in the atmosphere, shown here, over the last 800,000 years.

Well, by natural processes mainly changes of, the earth’s, orbit, and the effects that that produced, carbon dioxide in the Earth’s history has gone up and down in kind of a wave like manner. But look at the recent few years, the, the blink of an eye in terms of the Earth’s history. Carbon dioxide has suddenly soared to levels of 400 parts per million in of CO2 in the atmosphere, something not seen on the planet, not for 800,000 years, indeed not for 3,000,000 years. And this is causing massive disruption of the climate system, global warming, and more extreme events like droughts and floods. We’ll be talking a lot about this and what could be done about it.

But it is a stark illustration of how humanity is changing the basic Earth processes. A group of scientists got together a few years ago. And noted that it’s not only the carbon dioxide in the air, but many other things that we’re doing. The way we’re using water the way that we’re putting nitrogen based fertilizers into the soil to help crop productivity. But putting it on in such large amounts that the nitrogen cycle, itself, is effected. The way that carbon dioxide in the atmosphere affects the ocean chemistry, making the ocean more acidic. The way we’re chopping down trees to make room for new pasture land and farmland. In other words, all the varied effects of a big crowded planet and a lot of economic activity, threatening the planet systems. And so this group of scientists said we are trespassing, boundaries that are safe for humanity. So these scientists said we need to identify the safe operating limits for the planet, we need to understand what those planetary boundaries are.

And around the circle you see here is their visualization of those planetary boundaries. Have a close look: climate change, ocean acidification, ozone depletion, the nitrogen cycle, the phosphorous cycle, global fresh water use, changes in land use, loss of biodiversity, driving other species to extinction, that is, aerosol loading, the particles we’re putting into the atmosphere through industrial processes, and chemical pollution, poisoning air and waterways. These are planetary boundaries that we trespass at profound risk for ourselves and for our children.

A core goal of the science of sustainable development is to understand these risks and most importantly to determine what we can do so that we stay within the safe operating limits of humanity, we honor and respect these planetary boundaries, as we continue to improve our well being. It’s the combination of economic prosperity, social inclusion, ending poverty, and ensuring environmental sustainability, that is the holistic objective of sustainable development.

Lectures / Readings

What is Sustainable Development? III

31/03/2015 Pedro Pereira Leite Deixe o seu comentário

Continuing Poverty

In many ways we live in a world of plenty. Economic growth has produced incredible wealth. Many parts of the world have escaped from economic hardship. Countries like China, which were once very poor, are now solid middle income countries. But sustainable development calls for prosperity that is broad based. And, despite living in a world of plenty, there are still large numbers of people, more than a billion, more than one out of every seven persons on the planet, living in extreme poverty. What is the face of extreme poverty? If you look at a small farmer At this peasant living in Northern Ethiopia. There’s no modern transport around you don’t see electricity grids in the distance. You see a pretty parched environment. That’s not a complete coincidence. A dry land area. Of, poor farmers, eking out a living, trying to ensure enough annual food production to feed themselves their families. Maybe to get that surplus to bring to market for a little bit of cash income. Another part of poverty?

Have a look at a street in a slum of Nairobi. Millions of people live in the slums of African cities like Nairobi hundreds of millions of people live in urban slums around the world. This is another face of poverty. While it remains true to this day that more than half of the world’s population living in extreme poverty lived in rural areas, of course, the urban poverty is known to us.

Often the urban poverty is living right next to a great urban wealth, and what do we see in this street in Nairobi. You see an unpaved, muddy road. People living without modern power, probably without any modern sewerage or sanitation. In other words, even though these are people living in an urban area of several million people, they’re also like that peasant in Northern Ethiopia, unable to secure basic needs. Access to emergency healthcare. Access to basic clean power in the form of electricity or natural gas for cooking. Lack of access to safe drinking water and sanitation, and barely eking out a monetary living that can meet even the most basic of minimum needs of clothing and safe shelter.

When we speak about poverty, therefore, we’re necessarily speaking about a many dimensional concept. Poverty is usually viewed as lack of adequate income, but I want us to think about it as a lack of income, a lack of access to basic health services. A lack of access to basic amenities that most of the world takes for granted. Safe water, sanitation, electricity, access for children to, a decent education. People living in extreme poverty are people who cannot meet these basic needs. And while proportions of the world living in extreme poverty have been shrinking markedly in recent decades, the numbers are still staggering.

Depending on one’s estimate and one’s exact categorization of extreme poverty, it’s fair to say, that between one and two billion people in the world are struggling to meet basic needs. And probably fair to say, that around one billion people struggle for daily survival. Will they have enough to eat? Will polluted water cause a disease that threatens their lives? Will a mosquito bite carrying malaria carry away their child because they can’t get access to the $0.80 dose of medicine needed to cure the disease.

That’s the struggle of daily survival for people living in extreme poverty. Where is this poverty? Well, one place to look is the average incomes in different parts of the world. Take the national production of the economy, divided by the population so that one gets the amount of income generated per person, per year, in different countries of the world. And if you put them in a color code as you see here. You can see a huge variation in income levels around the world. Those dark blue areas, there aren’t too many of them. Canada, and the United States. Western Europe. Australia and New Zealand. Japan and South Korea. Those are the high income parts of the world. And by and large, extreme poverty has been eliminated from those countries. But take the bright red or beige parts of the world. There you’ll see the greatest poverty.

And what you can see very, very clearly in this world map, is that extreme poverty today is concentrated mainly in two regions of the world.

The first is in tropical Africa. That’s the part of Africa in between the northern African countries and the countries at the very south of Africa, and you see on average, a lot of poverty within those countries. Often half or so of the population, living in extreme poverty. And the other concentrated part of poverty in the world is in south Asia. India, Pakistan, Nepal, and Bangladesh, nearby countries that are sometimes experiencing economic growth but still with vast numbers of people, often in rural villages, living without security of their basic needs.

Thank goodness, in both Africa. And in South Asia. The proportions of households living in extreme poverty are coming down. Thank goodness for the world as a whole, the numbers have been coming down. But clearly, we still have a very serious challenge, a moral challenge and a practical challenge people living in extreme poverty, face risks of survival. Often countries where poverty rates are very high, succumb to violence, to terrorism, to epidemic diseases, to mass migrations, to environmental disasters, that not only are tragedies for them, but can trigger unrest and instability among their neighbors and in other parts of the world as well.

We see in the next map another aspect of extreme poverty. People living in extreme poverty face a burden of disease and shorter lives as a consequence.

That make their lives distinctly more difficult, often more painful and tragic than lives of people in other parts of the world. Once again, where is the concentration shown in this map of high mortality rates of young children? In this particular map. What’s shown is the mortality of children under the age of five.

For every 1,000 births, how many children won’t survive til their fifth birthday? What’s called the under five mortality rate. Once again we see that Africa is really the epicenter and tropical Africa is where the highest burdens of disease still reside. It’s a stark fact that even in countries where there’s a tremendous amount of economic progress, there can still be very significant pockets of poverty that are unrelieved.

A lot of inequality, lack of social inclusion, and major gaps between rich and poor. And sometimes the starkness of that is right in front of our eyes as in the view of Rio de Janeiro that you’re looking at right now, where in the foreground, you see the low lying favelas, the slum areas of Rio. And in the background, of course, you see the, high rises, the, the modern, very high quality of life, of, the wealthier people of Rio de Janeiro. While there are some parts of the world where most of the population is poor. There are a number of countries that have reached what we call the middle income status. Countries like Brazil where there still are important pockets of poverty that need to be releived. As always with sustainable development, there’s hope.

There are things that can be done to help people meet their basic needs, to help them overcome that daily struggle for survival. One of those opportunities that I find most exciting is shown here in this picture of this valiant young woman a community health worker. Working, with her backpack of medical supplies, to make sure that if an illness does strike one of those very poor, small holder farmers, one of their children, that there’s a cure, a remedy on the way.And through that we can extend the benefits of modern health and medical sciences to reach everyone in the world. Well, we’ve already noticed that the degree of poverty has a kind of geography to it.

On this fascinating depiction of income on our globe, shown not as a maps, but as a globe where the height of each point on the globe measures the economic output of that point. You can see those startlingly high levels of GNP on the islands of Japan. You can see that in the east coast of Australia the very high levels of development shown by the markers, but you can also see the low lying areas in England, China, in India. And the point that I want to emphasize in looking at this alternative depiction, of the world economy, is that geography of wealth and poverty is complex. Not only broad regions. Say, Europe versus Africa. Or Japan versus India, show stark differences. But even regions within countries, the coastal areas versus the interior of countries show very, very big differences. When we analyze in depth the nature of extreme poverty, the causes of why it continues to this day even in a world of plenty.

We’ll spend a lot of time looking at some of these geographic features. Is the county, or the, city on a coast where trade is easy? Is it in the interior where it might be more economically isolated? Is it in a good climate zone where food production is easy? Or it is, is it in a dry land region as we saw in Karo, Ethiopia where food production is a lot more difficult because of the low level and the instability of rainfall. Is it a healthy climate, where, disease burdens are naturally low? Or is it a place where killer diseases like malaria are more easily transmitted? Geography still today plays a big role in shaping wealth and poverty. By understanding the role of geography, we’ll make a big advance, not only in understanding why extreme poverty continues in a world of plenty, but what we can do about it.

Lectures / Readings

What is Sustainable Development? II

31/03/2015 Pedro Pereira Leite Deixe o seu comentário

Economic Growth and Progress

One very crucial aspect of sustainable development is economic well-being and prosperity. There have been great gains in material well-being. In average income per person, in other indicators of material life, such as health and life expectancy, over the course of recent decades.

We’ll see, of course, that these are not gains enjoyed by everybody within a country, certainly not in all parts of the world. But on average there have been very notable gains in economic well-being achieved through decades of economic growth. And this is a phenomenon that is of crucial importance for those countries that are still poor today. Perhaps their, their greatest goal is to achieve economic growth so that they can narrow the gap in material conditions that they face today with respect to the richer countries. If those countries living in extreme poverty today where, that they can hardly meet their basic needs, are aiming to live like more of the world that increasingly has assurance of basic needs, and many parts of the world that live with remarkably high standards of living.

Another aspect of this material change is that in a world of greater production greater ability to grow food greater productivity in manufacturing, in transport, in power and in other key parts of the economy. The population has risen alongside that from the middle of the last century in 1950, the world’s population at the time was about 2.5 billion people. It’s roughly tripled since then, absolutely extraordinary to around 7.2 billion people today, and the numbers are continuing to rise. Roughly an increase of 75 to 80 million people added to the world’s population each year. Meaning that it won’t be long, probably around 2024, 2025, when another billion people will be on the planet when we’ll reach the 8 billionth person.

Let’s look at what growth really means and there has been no, exemplar of economic growth more remarkable than China. Of course, it’s the world’s most populous country, with 1.3 billion people. So anything major that happens in China is earth shaking. But also China has been among the fastest growing economies in world history. Since China undertook some basic market reforms, after 1978 until just about the last couple of years when growth has begun to slow a little bit, China was averaging roughly 10% per year economic growth. Absolutely astounding, and it’s very handy, you know, something that I’ll refer to many times to use what we call the rule of 70. Take the number 70, divide it by the growth rate in this case 10, 70 divided by 10 is 7. It means that China has been doubling it’s national income every seven years. The rule of 70 says 70 divided by the growth rate gives you the number of years to double the size of the economy. Well, what does that mean? Take a look at Shenzhen China.

Shenzhen is a city very close to Hong Kong in southern China. And in 1980, or so, when you receive this picture, Shenzhen was a small village, mainly rural not very many people perhaps 30,000 people living in Shenzhen. Now, take a look at Shenzhen today, nearly 10 million people, Shenzhen has become a modern metropolis, it’s a major manufacturing hub for the world. Not only did populations rise, did incomes per person soar, but also, how people live has clearly, fundamentally changed. From rural agricultural livelihoods to modern urban manufacturing and services and in a matter of three decades. While most of the world’s not going to experience a Shenzhen like change. But that basic pattern of economic growth a transition from poor, small-holder farming to modern manufacturing, especially modern service economy, is part of the normal pathway of economic growth. And while very few places grow at the rate of 10% per year with a seven year doubling time, it’s still is the case that many parts of the world, even many of the poorest parts of the world today are experiencing significant economic growth, and with that a significant transition to urbanization. Any significant transition from agriculture, to manufacture and especially to services.

If you look at the next graph, you see something also, absolutely astounding that we really need to keep in mind, and that’s demography. In other words, change of world population. Now, this is a graph that shows you the long, long haul over the last couple million years, even before there was the modern human species. But let’s just take the human part of this and what we call the Neolithic era, that’s since the age of agriculture began around 10,000 years ago. Well, the human population for a long time if you look at the picture from 10,000 years ago, maybe 7 or 8,000 years BC, was less than a half a billion people. Of course, nobody knows but maybe, 300 million people of all the people on the planet. That number did not change very much for a very, very long time the graph is quite flat numbers rising, and maybe to 4 or 500 million people in 1AD. And that tells you that over much of human history since the beginning of agriculture, human population did not change very much. But take a look at the right hand side of the graph, all of a sudden, the population begins to soar. Just about the time of major breakthroughs in technology around the industrial revolution the beginning of the era of the steam engine in 1750 or so, we see the population curve turning up and turning up remarkably steeply.

Around 1830, humanity reached the great milestone of a billion people on the planet. So for thousands and thousands of years, the population was under 1 billion. Then from 1830 to 1930 just in one century, the second billion was added. But then the numbers really started to soar, because from 1930 to 1960, just 30 years, the third billion was added. We’re on track to go from 7 billion, reached in the year 2011, to 8 billion, probably around 2024 or 2025, 9 billion sometime in the 2040s. So this change of population is absolutely astounding. Our age is an age of economic growth combined with rapid population growth, and together, those two dynamics have meant a massive expansion of economic activity, of total output produced on the planet each year, and of course, alongside that, a massive increase of humanity’s impact on the planet. And that is one of the great challenges in sustainable development.

Now, another bright spot of recent development, is that alongside that economic growth, and alongside the rise in population numbers, has also come improved health. Around 1950, for every 1,000 children who were born, an estimated 134 out of the 1,000 would not survive till their first birthday. That number 134 per thousand is the infant mortality rate. It tells us how many children won’t make it to the first birthday. What’s very heartening is that that number is coming down, and coming down sharply, so that 134 per thousand IMR, or infant mortality rate, is down to an estimated 37 per thousand today. 37 children still don’t make it to their first birthday, dying of malaria or, pneumonia, or other preventable diseases. Millions of children, dying before their first birthday, still of preventable and treatable causes. We’ll talk about that. We’ll see what can be done. We’ll see how even more progress can be made, and can be made rapidly. But taking the historic trends, to drop from 134 to 37, is a real accomplishment. And one that has improved the quality of life and certainly eliminated a lot of the tragedy and anguish that was part of humanities existence until the improvements of public health, and modern medical care. With more children surviving and with health improving at older ages as well, the good news is that our life expectancy is also rising, and rising very considerably.

Take a look at what’s happened to what we call life expectancy at birth.

That is statistically the, the average length of a life span taking into account the risks of death at each age. In the middle of the last century in the period 1950 to 1955, the average life expectancy you know, for people on the planet was around 47 years. Pretty short. As of today, the estimated life expectancy at birth is more than 70 years. Or roughly 71 years. And in the high income countries, around 80 years. This is another example of economic growth and material progress, and an example of the kind of progress that is being achieved in most parts of the world. What’s the lesson? The lesson is that this first pillar of sustainable development, economic well being, is something that’s achievable, and being achieved in large parts of the planet. There are fewer tragic deaths of young children, and greater health and longevity for most of us, with life expectancy rising several decades from what was experienced in the middle of the last century until now.

This shows, while economic development can improve lives, lives in which one can have the confidence that their children will also grow up healthy, survive, and have good prospects in life.

But what we need to do, is to ensure that, that economic growth is inclusive, that it’s not leaving millions and millions of people behind, and that it is environmentally sustainable. So that the progress itself doesn’t cut our natural life support systems of biodiversity, food productions, safe climate productive oceans. Because if we do that, the gains that we’ve made will turn out to be fleeting and evanescent, that could lead to real tragedy. So it’s that holistic approach of ensuring, that economic growth and material improvement, is socially inclusive and environmentally sustainable, that is the great challenge.

Lectures / Readings

What is Sustainable Development? I

31/03/2015 Pedro Pereira Leite Deixe o seu comentário

Introduction to Sustainable Development

Sustainable development is a crucial concept. It’s crucial for the world. But what does it mean? Our starting point has to be, how crowded our world is today. We’re 7.2 billion people. The numbers have soared. We’re up ten times since the start of the industrial revolution. Billions more people are likely to be added to the world’s population in the 21st century. This is making for a very complicated world. A world divided between great wealth and still crippling poverty. A world facing unprecedented environmental challenges. Sustainable development is really two ideas. One, is a way to understand this complicated world. How do the economic, the social, the environmental, the political, the cultural factors fit together? And the second aspect of sustainable development is the idea of sensible goals for this crowded, interconnected planet. How do we make the world both prosperous, fair and also environmentally sustainable, so that our numbers, and our economy don’t overrun the physical planet itself? That’s really the aim of the study of sustainable development. To understand the world and of course, to help improve the world. And we need to get into that complexity. Any idea there’s one answer, one simple, magic formula, one explanation, one force at work; we have to put that aside. We have to embrace complexity, because we are talking about a complicated, interconnected set of relations of a world economy that now spans all parts of the world. And connects all people, all businesses, technologies in flows of trade, finance, ideas, advertising, production systems, but also connects us with the physical Earth, in unprecedented ways. Humanity actually changing the climate, changing what specie survive on the planet, changing the chemistry of the ocean, changing the safety of the air, changing the access and availability of fresh water. It’s an unprecedented situation. It’s a fascinating situation. It will be the challenge of your generation. Let’s see what we can figure out of all of this and how through that knowledge we can do something about it. Have a look at this remarkable, the piece of technology the Maglev in Shanghai. Which carries people at speeds of more than 200 miles per hour, more than 400 kilometers per hour, to and from the city and the airport. It, it’s a magnificent piece of technology. A product of joint work of a major leading engineering companies and Europe and those in China. It’s been operating for the past decade. It is a kind of model of what sustainability can mean in the future. Because if a electric, trains, these, magnetic levitation trains or fast intercity rail based on electricity are powered by, clean electricity. Then we have a way of helping people to move helping goods and services to move in a way that’s safe for environment and technology is exemplified by the Maglev is definitely one way forward. But we also have to realize that not all the world right now is in, in the state of traveling to and from the airport in magnetic levitation. Let’s look a, another remarkable city another great city in many ways, but crowded beyond belief, the city of Dhaka. You see a crowds bustle, and actually a kind of transport you can hardly find anywhere else in the world. I’ve experienced it, it’s astounding to ride in a bicycle, a rickshaw or one of these buses on this incredibly crowded path. Thousands and thousands of people walking to and from work. Life out on the streets. What are we really seeing here? First, we are seeing one of the most crowded places in the world. We are seeing an example of the incredible rise of global population. Bangladesh is a country now, with around 160 million people. That’s more than four times the 37 million people in Bangladesh in the middle of the last century in 1950. Dhaka, itself, is one of the largest cities in the world right now but think of what’s happened. In 1965 Dhaka had about a half a million people. Today Dhaka has more than 15 million people. You can imagine how the infrastructure’s been completely over run. How transport systems, water systems, sanitation systems and all the rest Are facing unbelievable stress with this kind of population increase. This is also part of the reality of our planet. How do you achieve sustainable development in a, very low income, very crowded place like Bangladesh. Especially taking into account how vulnerable low-lying Bangladesh is to the climate change ahead.So, sustainable development for us, first, is a way to understand these complicated challenges. I think it’s useful to think of there being four dimensions to that puzzle. There’s the economics, there’s the societal dimension, how our communities work, culture, civil society, there’s the natural environment and there’s our political or government systems. How do economic, social, environmental and government systems interact? The second way to think about sustainable development is not only as an analytical approach, one that takes a holistic view of society. But also as what we would call a normative or ethical approach, identifying goals for society. Sustainable development urges us to have a holistic vision of what a good society should be. Sometimes people say well good society is a rich society. But we know that can’t quite be it just to focus on the economics. If a country is rich on average, but all the wealth is held by very few people and most of the people are poor, Think most of us would say that’s not a good society in the sense, that we would aspire towards. So social inclusion is the second aspect of a good society. Meaning that economic well being is widely shared among different ethnic religious or racial groups in a country. It’s shared between men and women. So, there’s gender equality, it’s shared among regions of a country, so that there’s not just one pocket of prosperity in a sea of poverty. A third aspect of what we would think to be a good society is one that is a good steward of the natural nvironment. We all know that if we break the physical systems of biodiversity if we destroy the oceans if we deforest the great rain forests, we’re going to lose immeasurably. If we continue on a path that fundamentally changes the Earth’s climate in a way that’s unrecognizable for us in the way that humanity has developed. We’re going to face grave dangers. So from a normative perspective, environmental sustainability certainly seems right. If we care about the well being of our children and future generations. And for most of us we also care very much how government functions. People living in places with massive corruption with lawlessness. Where the politicians are not to be trusted. Where government services are not fair. Where there’s massive discrimination, insider dealing and so forth. This creates a lot of unhappiness. All over the world, people feel happier and better when they can trust their government. But unfortunately, many places in the world, people don’t trust their governments to be honest, to be fair, even to keep them basically secure. So from a normative perspective, we could say that a good society is not only a wealthy society. But is one that is prosperous and inclusive, environmentally sustainable and well governed. And our fundamental question will be how can we take sustainable development as a goal? Use our knowledge of the interconnections of the economy, of society, of the nvironment and of governments. To think through this crowded 21st century in a world of massive divisions of wealth and poverty and world of unprecedented environmental stress. But also in a world of Maglevs and many, many other technological miracles. How can we find our way through, through this century to produce property that is inclusive, that is sustainable. And that is according to decent governance with rule of law, transparency and accountability. There are some very powerful ways forward to meet sustainable development as a goal a shared goal for the planet.

Global Heritages

Arquivo diário: 31/03/2015

Economic Development – How We Measure It, How It Varies Around the World V

Economic Development – How We Measure It, How It Varies Around the World IV

Economic Development – How We Measure It, How It Varies Around the World III

Economic Development – How We Measure It, How It Varies Around the World II

Economic Development – How We Measure It, How It Varies Around the World I

What is Sustainable Development? V

Business as Usual Versus Sustainable Development Paths

What is Sustainable Development? IV

What is Sustainable Development? III

What is Sustainable Development? II

What is Sustainable Development? I

The inclusion of community knowdlege on territorial development