Growth, development and wellbeing

Buapun Promphakping

buapun@kku.ac.th

Questions

• Is growth equated to development? • Is development necessarily achieved through

growth?• Is development and/growth a precondition for

improving quality of life of the population?• How development, growth and wellbeing are

linked? How these implicate on poverty or wellbeing?

• What does your government do in trying to cope with the worlds’ economy recession

People and their villagePeople and their village

Modernization: rural urbanizationModernization: rural urbanization

The conventional mode of growth

• There are unemployed or underemployed (surplus) labour in rural areas.

• Growth can be achieved by removing these labourers to be employed in modern economy.

• The non-poor will first enjoys benefits of growth which will be eventually ‘trickle-down’ to the poor.

How conventional growth helps to remedy poverty

• Employment

• The remittances send home will lead to the improvement of living standards

• The removal of surplus labour from rural areas will give ways to improvement in productivity

Some evidences

• Dollar and Kraay (2004): there is a positive relationship between growth in per capita income and income of the poor.– Data from 40 countries– Period of 4 decades

• The study confirmed that the poor benefits from growth

Troubles with irrigated dam

• It causes flooding and displacement• Forests in the reservoir are

completely destroyed• There were 3 years continually floods

after the Kong-Chi-Mun Project.• Inland fishery resources are depleted• Spread of salinity

• Dams were usually built without proper consultation and participation of people.

• Local knowledge of water management is disregarded.

• Pollution• Impact on health, physically and mentally.• Human rights is usually violated.

Troubles with irrigated dam

Trouble with roads• Improving transport links tend to accentuate inequalities

and promote social differentiation

• There are sometimes (relatively and, sometimes, absolutely) losers: women, the elderly, ethnic minorities, and the poor

• The spatial poverty traps of women and men, poor and non-poor, are different

• Improving roads can, paradoxically and counter-intuitively, increase isolation (roads connect and disconnect)

Some Issues?

• The persistent of small producers in rural areas.

• The remittances were spent on excessive consuming goods.

• Income gap – the rich and the poor has been widened.

• Environment deteriorated.

General statements

• Growth is necessary or a pre-condition for poverty reduction.

• Recession will harm to the poor.

• Growth is sometimes accompanied with inequality and growth can intensify poverty.

• It must be specific kinds of growth that promote wellbeing of the poor.

Definition of pro-poor growth

• Ravallion (2004): any increase in GDP that reduce poverty (poverty outcome).

• Kakwani, Khandker and Son: income of the poor-grows more than average income (inequality outcome)

Definition

• Kakani and Pernia define pro-poor growth by following to the notion of functioning and capability of Sen:– Growth is pro-poor when it improves wellbeing

of the poor: growth that enables the poor to participate meaningfully in economic activities and lead their live

Growth can be pro-poor with

• Growth that occurs through the removal of institutions that discriminates the poor, for example:– Currency exchange rate policy.– Investment on rural infra-structure rather than

urban infra-structures.– Abolish subsidiary for the rich– Investment and expanding health services

and education to the poor.

Environment and wellbeing

Car Growth in China

0

50

100

150

200

1980 2000 2002 2003 2015Year

Mil

lio

ns

of

Ca

rs

5 10 14

150(est.)

~ 0

2. The Dark Side of growth

0

20

40

60

80

100Maximum Score

Human WB Enviro WB Total WB

(Rank out of 180 countries)

Sweden(1st)

79

49

64

Netherlands (24th)

78

22

50

United States(27th)

73

31

52

Rethinking development

Similar Human WB, but different Enviro WB:

How a nation meets its

development goals as important as

whether it meets them

Environment and Wellbeing

Key issues• Sustainability • Growth and/or development not

matched by increase in wellbeing• stability• Change in behaviour and attitude

Wellbeing according to WeD

• “Wellbeing is a state of being with others, where human needs are met, where one can act meaningfully to pursue one’s goals, and where one enjoys a satisfactory quality of life”

• Building blocks: needs, socially meaningful goals, satisfaction with life

• 3 dimensions: – material

– relational

– affective/cognitive

Aspects of Well-being

Basic Needs Food, shelter, secure livelihood

Good Health Physical and mental health and a robust natural environment

Healthy Social Relations A supportive social network

Security Personal safety and security of one’s possessions

Freedom The capacity to achieve one’s development potential

State Policy

Wellbeing

Good Health Good governance

Environment

Family Income andการกระจายรายได้

Knowledge

Working

Source: National Economic and Social Develop ment Board (www.nso.go.th)

Index of Well Being

Ecological Footprint

• Footprint is a measure of people’s demand on nature. It compares the amount of resources we consume with nature’s ability to provide resources and absorb waste. It is not a measure of the physical size of the municipality.

It is about a balance of supply and demand.

Ecological Footprint - Methodology

• International standard for calculation and guidelines for communication

• Utilizes international and national statistical information

• Assumptions and allocations are explicit and entail a conservative bias.

• Includes life cycle consumption (creation – use - disposal)

• Puts consumption in a land area context

Ecological Footprint - Overshoot

2008 Earth Overshoot Day = September 23

Ecological Footprint By Region, 1999

The size of each box is proportional to the aggregate footprint of each region The height of each box is proportional to the region's average footprint/capita The width of the box is proportional to the population of the region

Ecological Footprint of Nations C

alg

ary

Can

ada

Can growth reduce poverty?

• It depends on– How growth and development are defined and

measured– How poverty is defined and measured