Why

the GDP is not enough: The United Nations Development Programme on Development and Human Well-Being Carla Gonzlez Ramos Only when people feel they have a stake and a voice will they throw themselves whole- heartedly into development. Rights make human beings better economic actors. Introduction Human rights and human development share a common vision and a common purpose to secure the freedom, well-being and dignity of all people everywhere. To secure1: Freedom from discrimination by gender, race, ethnicity, national origin or religion. (For equality) Freedom from want to enjoy a decent standard of living. Freedom to develop and realize ones human potential. Freedom from fear of threats to personal security, from torture, arbitrary arrest and other violent acts. Freedom from injustice and violations of the rule of law. Freedom of thought and speech and to participate in decision-making and form associations. Freedom for decent work without exploitation.
1

According to United Nations Human Development Report 2000 (about human rights and human

development)

Support for human rights has always been integral to the mission of the United Nations, embodied in both the UN Charter and the Universal Declaration of Human Rights. But throughout the cold war serious discussion of the concept as it relates to development was too often distorted by political rhetoric.

As always, the result is a Human Development Report that is unapologetically independent and provocative. But it clearly underlines the fact that human rights are not, as has sometimes been argued, a reward of development. There are strong negative relationships between the seven freedom precepts and human development. For example inequality in major indicator aspects such as the HDIs core points, health, education and income, causes negative relations with the improvement of this measure. This results suggests that reducing inequality can significantly improve human development. If this measure (HDI) has been a more complex and integral view of widening the senses for the ethic validity of the world-wide economical process, lots need to be done then to widen even more HDI indicator, in order to understand that what is happening is not growing parallel in all senses which involve human life. Human Development and GDP definitions Human development is the process of enlarging peoples choices, by expanding human functionings and capabilities. Human development thus also reflects human outcomes in these functionings and capabilities. It represents a process as well as an end. At all levels of development the three essential capabilities are for people to lead a long and healthy life, to be knowledgeable and to have access to the resources needed for a decent standard of living. But the realm of human development extends further: other areas of choice highly valued by people include participation, security, sustainability, guaranteed human rights all needed for being creative and productive and for enjoying self-respect, empowerment and a sense of belonging to a community. Human Development encompasses more than health, education and income. The chance to lead a meaningful life depends on the conditions people face, including the distribution of advantages in their society, the possibilities for participating in decision-making and the way choices affect the well-being of future generations.

Gross Domestic Product is defined as the market value of all final goods and services produced domestically in a single year, and is the single most important measure of macroeconomic performance. The economic textbooks tell us that economic growth may be defined as the expansion of an economy's long-term capacity to produce goods and services. Mankiw 1998: Gross Domestic Product is the Market Value of all final goods and services produced within a country in a given period of time Real GDP takes the measure of GDP as defined above and adjusts it to remove the effects of inflation. Defining real GDP thus, the textbooks then point to the limitations of the measurement. Usually it is pointed out that GDP does not measure the value of production done at home (e.g. preparing meals) or in the subsistence sector of a developing country (i.e. where goods are produced, exchanged and consumed but not with money changing hands). It is also stated, that GDP 'does not take into account the environment' (natural capital) and also that it does not take into account how the output that was produced over the time period was distributed; that is, how much of it went to rich people and how much to poor people (inequality). It is also usually mentioned that GDP does not indicate how much leisure time a nation had whilst producing the goods and services that went into GDP (standard of living). Use of indicators to measure (sustainable) progress It is not easy to specify which requirements indicators have to meet in order to be viable indicators for measuring sustainable progress. Many governments and organizations are already in the progress of gathering data on all three areas (economy, society, and environment). It is therefore not always necessary to start measuring new data. The OECD for example annually publishes a fact book with 100 indicators, pro- viding a global overview of economic, social and environ- mental trends of any OECD country. The UN Development Programme publishes annually a

Human Development Report, focusing on economic and social indicators. Furthermore, the UN Statistics Division gathers global data related to economy, society and environment. Indicators are useful for policy analysis on condition that it is possible to use and compare indicator results on different scales (international, national, regional, local). How- ever, these indicators are very often based on data gathered following different methods as no methodological inter- national standard has been developed. Furthermore, data availability differs on local, regional and national scale. A second problem relates to the normativity and the subjectivity of the concept welfare. Assessing different regions and countries will imply encountering different ranking and prioritization of indicators. Even on individual basis, welfare may be perceived differently from one individual to another. A lot of regional/local issues con- tribute to welfare, making it difficult to come up with uniform international indicators. Thirdly, average values across a national level may hide regional and local trends, giving a distorted picture of reality. HDI & its measures at a glance (From Human Development Report 2010) HDI (Human Development Index) is a central contribution of the Human Development Reports from the UN intended as a simple measure of development and as an alternative to GDP. HDI is a comparative measure of life expectancy, literacy, education, and standards of living for countries worldwide. It is a standard means of measuring well-being, especially child welfare. It is used to distinguish whether the country is a developed, a developing or an under-developed country, and also to measure the impact of economic policies on quality of life. The HDI helps answer some basic questions about the progress of societies, such as which countries have progressed faster and whether poor countries are catching up with rich ones. Such questions are often addressed using income. However, a much clearer picture of development comes from measures that consider progress more

broadly. Since its inception, the HDI has been revised several times to address major criticisms. Advances in the HDI have occurred across all regions and almost all countries. The fastest progress has been in East Asia and the Pacific, followed by South Asia, then the Arab States. All but 3 of the 135 countries have a higher level of human development today than in 1970 the exceptions are the Democratic Republic of the Congo, Zambia and Zimbabwe2.
2

According to the Worldwide trends in the Human Development Index, 1970-2010 from the Human

Development Report 2010

The HDI can be used to assess national policy choices, to stimulate debate on government policies on health and education, asking why what is achieved in one country is far from the reach of another (for example in case of two countries with a similar level of income but yet with very different human development outcomes, or vice versa). Furthermore, it can also be used to highlight internal disparities within countries, between provinces or states, across gender, ethnicity, and other socioeconomic groupings (UNDP, 2006b). The HDI is promoted through the annual flagship report of the UN Development Programme (UNDP). It is highly recognised and visible worldwide. Its ranking mechanism is a tool that is easily understood by the public. The indicator has significantly raised awareness for the concept of human development (Bagolin, 2004). From the latest reports, the flash most important glances are: -Many countries have achieved large gains in life expectancy and mortality rates have fallen faster in infants and children. Not the same case in adults where, points out that Health progress has slowed since 1990. -Average life spans rose about six years between the 1970s and 1990s, but only four years in the subsequent two decades. This slowdown in aggregate progress is due largely to dramatic reversals in 19 countries (home to about 6 percent of the worlds people) that experienced declines in life expectancy in the past two decades. - Mortality data measure one keyif dramaticaspect of well-being. However, surviving is just one part of leading a long and healthy life.

Being well nourished is another. Those who survive need to be sufficiently well nourished to live decently and fulfill their life plans. - Progress in education has been substantial and widespread, reflecting improvements in the quantity of schooling and in equity of access for girls and boys. To a large extent, this reflects greater state involvement, though many developing countries have proven more capable of putting children in school than of giving them a high quality education. -Gender differences are narrowing, womens enrolment in higher education, also on the rise, exceeds that of men in many parts of the world. - Higher spending and enrolment do not necessarily mean better schooling. The gaps in school quality are huge, although whether schooling has improved or deteriorated over time is hard to tell due to lack of data. In general, children in developing countries learn far less than children schooled for the same number of years in developed countries. A Non-Parallel Rising Income has many shortcomings as a summary measure of development a central message of HDRs for the past 20 years. Among its flaws is the neglect of inequality in distribution and of the unsustainability of current production. However, money is an important means of expanding choice, especially poor peoples choices, and average income does proxy for a societys overall command of resources. The evolution of income is thus of great interest. However, the story is not just one of overall increases, it is also one of widening disparities and a persistent divide between developed countries and the rest of the world. Since 1970, 155 countrieshome to 95 percent of the worlds peoplehave experienced increases in real per capita income. The annual average today is $10,760, almost 1.5 times its level 20 years ago and twice its level 40 years ago. People in all regions have seen substantial increases in average income, though patterns vary. And the range, amount and quality of goods and services available to people today is unprecedented. We have seen that many people around the world are healthier, wealthier and more

educated than ever before. But progress over the past 40 years has been uneven, with people in some countries and regions experiencing far slower advances, and, in a few places, deteriorations. Using a new dataset and analysis, results also confirm a central contention of the Human Development Reports (HDRs) from the outset: that human development is different from economic growth and that great achievements are possible even without fast growth. Initiated by the UNDP to increase discussion about human development in developing countries, the HDI might be best suited for application in EU cooperation and trade policy. This would also add to the index credibility and increase its public perception. The EU and the UNDP could also work together to further develop the index and address its main shortcomings. The index also broadly corresponds with the UN Millennium Development Goals. However, due to its lack of complexity and completeness, e.g. regarding environmental aspects, the HDI cannot replace other measurements of sustainable development. It could still provide an example for constructing and establishing a composite indicator that attracts widespread public attention for an issue, responding more specifically to European challenges and policy agendas. Except for inequality, in the HDRs, the pattern is not straightforward. There is no statistically significant relationship between sustainability and the HDI, same case with democracy, empowerment and political freedom. For the Sustainable development then, in the area of environmental sustainability, the ecological footprint of consumption which measures the area of biologically productive land and sea needed to regenerate the resources that a country consumes, HDI does not correlates directly on statistics. Broader dimensions of human development (for solidarity) or Conclusions Human development is development of the people, for the people and by the people. Functionings, capabilities and freedom. The functionings of a person refer to the valuable things that the person can do or be (such as being well nourished, living long and taking part in the life of a community). The capability of a person stands for the different combinations of functionings the person can achieve. Capabilities thus

reflect the freedom to achieve functionings. In that sense, human development is freedom. Human development is different from economic growth and several great achievements are possible even without fast growth or extreme improvement of income. Sustainable development might be a more accurate field in which both could fusion, but still, having lacks in the understanding of both complex meanings and non-measurable disparities which consequently often come from human rights violations. References UNSD (2003): Millennium Development Goals (MDGs). United Nations Statistics Division (UNSD) What Went Wrong With Economics. 2009. The Economist. (July 16). The World Bank. 2009. World Development Indicators, 2009. Washington, DC: The World Bank. Bagolin, I. (2004): Human Development Index (HDI) A poor representation to Human Development Approach, 2004. UNDP (2006a): United Nations Development Programme, Human Development Indicators. UNDP (2006b): United Nations Development Programme, Human Development Report The Economist (2006): How to measure economies