A side event, convened by the International Institute for Sustainable Development (IISD) in the margins of the UN High-level Political Forum on Sustainable Development (HLPF), discussed ways to shift from ambition to action in moving beyond Gross Domestic Product (GDP). Participants explored lessons learned from recent studies measuring comprehensive wealth in Ethiopia, Indonesia, and Trinidad and Tobago over a 25-year period.
Lynn Wagner, IISD, moderated the discussion. In her opening remarks, she highlighted that SDG target 17.19 calls on governments “to develop measurements of progress on sustainable development that complement gross domestic product and support statistical capacity-building in developing countries” by 2030.
Wagner encouraged participants to reflect on developing indices with existing national data sources and to share recommendations for using these complementary indices to better guide decision making and deliver on the 2030 Agenda for Sustainable Development. Referencing the UN Secretary-General’s 2023 policy brief on moving beyond GDP, which identified complementary measures as a key step in accelerating the SDGs while leaving no one behind, she identified the Summit of the Future (SoF) as an opportunity to focus attention on the issue.
Livia Bizikova, IISD, presented pilot studies conducted by researchers at universities in Ethiopia, Indonesia, and Trinidad and Tobago, with funding from IDRC, that measured comprehensive wealth in each country. She said having a measure of progress in addition to GDP may take prioritization of SDG investments to a more sustainable pathway.
Bizikova called attention to the UN Secretary-General’s policy brief’s warning that “excessive dependence on GDP [has] serious consequences for the sustainable development of all countries” as the metric does not fully capture the complexities of the challenges the world is facing. She highlighted the need to “shift priorities towards new metrics” that are robust, concise, widely accepted, comparable, country-owned, and applicable to decision making. She also cited a 2024 report by the UN Human Rights Council, according to which “fixation” with GDP may impede efforts to eradicate global poverty and hunger.
Bizikova outlined three types of metrics that go beyond GDP:
- Indicator sets and dashboards to measure well-being;
- Indices to capture issues important for people and countries, such as the human development index (HDI) and multidimensional poverty index (MDPI); and
- Indices to assess the underlying wealth of the country – the focus of IISD’s work on comprehensive wealth, which she said comprises produced capital, natural capital, human capital, financial capital, and social capital.
Among other findings from IISD’s pilot studies, she highlighted:
- While in all three countries, investments into infrastructure (produced capital) are on the rise, in Ethiopia, there is misalignment between prioritized sectors and potential benefits;
- The most important asset in the three countries is human capital, which requires long-term investments in education and health;
- Both market and non-market natural capital is stagnating or declining, making a strong case to move beyond GDP; and
- Cutting through the wealth portfolio, agriculture is “a great tool” for integrated planning for the achievement of multiple SDGs.
Bizikova said the lessons learned from the three studies align with the UN Secretary-General’s recommendations for moving beyond GDP, namely the need for: political commitment; a robust technical and scientific process informed by sound and disaggregated data; and “major” capacity building.
A panel discussion that followed reflected on the importance of moving beyond GDP, the required policies and measures, and capacity gaps and needs.
With respect to why moving beyond GDP is critical for advancing the SDGs and to policies, measures, and investments that countries may put forward if different metrics of measuring progress are used, Anu Peltola, Director of Statistics, UN Conference on Trade and Development (UNCTAD), shared perspectives from the UN-wide Valuing What Counts initiative. Highlighting GDP as a measure of success, she stressed the need for equally strong metrics to value well-being, equality, and sustainability. She said the shift beyond GDP is essential for a sustainable future.
Offering examples of policies, measures, and investments, Peltola outlined an initial framework proposed under the Valuing What Counts initiative, which is grounded in human rights, fosters solidarity, promotes respect for life and the planet, emphasizes resilience building and participatory governance, and fosters innovative and ethical economies. She also mentioned pioneering economic budgeting developed by New Zealand and Scotland where human health, education, and social protection are elevated alongside economic considerations.
Introducing the ‘green GDP’ concept, Juliana Makonise, Winner of the “What Counts in the Future?” essay competition organized by the Beyond Lab, UNCTAD and Rethinking Economics, said it is time to think beyond aggregate income and aggregate expenditure values and to prioritize people and the environment while acknowledging that growth depends on them.
Heinrich Bohlmann, Partnership for Economic Policy, said achieving and measuring sustainable development is about more than just domestic production levels. While GDP remains the single most important metric for economic analyses and predictions, he said telling a complete story involves “much more than just GDP,” including human, social, and environmental capital, which GDP “was never intended to give insights on.”
Bohlmann said investments in natural capital measures are growing, but the management and measurement of global public goods requires building statistical capacity, global coordination, and technical support to GDP-poor but resource-rich countries. He cited nature bonds in the context of reforming global financial architecture as an example of a measure that goes beyond GDP.
Florencia Caro Sachetti, Associate Researcher at CIPPEC, part of the Southern Voice network, challenged the dominant paradigm that people and the planet should serve the economy, suggesting it should be the other way around. Focusing on the “invaluable” contribution of unpaid care and domestic work, she said such work, often “taken for granted,” is overlooked by GDP, even though it is essential for human and social capital and for driving economic growth.
Caro Sachetti described the Basic Care Basket (BCB) – an indicator complementary to GDP. By focusing on households with children under 17 years of age, calculating the monetary value of goods, services, and work needed to produce sufficient family care, and linking unpaid housework with monetized economy, the BCB helps understand how policies and investments can best support families.
On capacity gaps and needs at the national and international levels to advance efforts to move beyond GDP, Caro Sachetti said a major gap is conceptual, citing the need to recognize unpaid work as a process that produces development outcomes. She identified data collection and analysis as another obstacle.
Bohlmann stressed the need for supportive regulatory environments to mainstream financial mechanisms and institutions to accommodate the valuation and use of natural capital. He also underscored the importance of clear messaging, definitions, and marketing around measures that go beyond GDP.
Makonise called for collaboration among different stakeholders, including intergenerational collaboration, and for financial incentives and resources to help countries that need them go beyond GDP.
Emphasizing that no country should be left behind in moving beyond GDP, Peltola highlighted the main findings from UNCTAD’s SDG Pulse report, including that: there are stark disparities in living conditions across countries; gender equality and trade are lagging behind; there is untapped potential in promoting service sectors and environmental sustainability; access to green technology is crucial; and multilateral cooperation to close gaps in SDG achievement is critical. She hoped the SoF will mobilize political will towards commitment to “valuing something that truly counts.”
Responding to questions from the audience, speakers highlighted the need:
- For the SoF to prioritize moving beyond GDP through high-level political engagement;
- To think beyond 2030, while putting people at the center of our actions;
- To focus on the end goal of eradicating poverty; and
- To work across disciplines to develop a common language to inform actions.
In conclusion, Wagner called on participants to “nudge, repeat, [and] mainstream” – not just SDG target 17.19 but the entire 2030 Agenda, with one action building on the other. She hoped for clear messaging, involvement, and energy around the SoF so that policymakers can have a measure complementary to GDP at their disposal “to make the SDGs a reality for all of us.”
According to IISD, indices complementary to GDP “can assess countries’ long-term sustainability by considering natural, social, and human capital,” while measurements of comprehensive wealth can offer insights about a country’s sustainability pathway. National agencies can then “use these data to prioritize investments to improve climate resilience, protect biodiversity, and manage natural capital.”
The side event convened on 18 July 2024. [Moving Beyond GDP at HLPF 2024: From Ambition to Action on SDG Target 17.19] [SDG Knowledge Hub Sources]