Inclusive development indices respond to the challenges of globalization

On January 16, 2017, the World Economic Forum released its Inclusive Growth and Development Report 2017. The report states that in the face of the challenges posed by the technological revolution and globalization, a new economic growth paradigm should be adopted to measure the economic success of countries by replacing the Gross Domestic Product (GDP) with the Inclusive Development Index (IDI).

1

The Inclusive Development Index includes not only the growth and development aspects of GDP, but also three categories of factors as basic criteria for judging.

1. Quality-of-life factors such as employment, productivity and healthy life expectancy.

2. The severity of median income, poverty and inequality.

3. Intergenerational equity and sustainability factors such as coal use, public debt and population dependency.

2

The report measures 109 countries on 12 key indicators in the three areas mentioned above to produce the Inclusive Development Index. According to the data, Norway was ranked first, ahead of Luxembourg and Switzerland. China is ranked second in the Asia-Pacific region for inclusive growth and development, after Thailand.

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With the advent of the Fourth Industrial Revolution, and in the face of the ensuing economic globalization and industrial transformation, it is necessary to learn how to share the dividends of economic globalization with the people in order to raise the median income level, in order to avoid the world economic downturn and weak economic growth. In terms of international cooperation, the economies should strengthen pragmatic cooperation, reaffirm the "G20 Agenda for Strengthening Economic Structural Reform" formulated at the Hangzhou G20 Summit, and address the "structural weaknesses" of the economies. In the area of economic and trade cooperation, trade barriers should be removed and there should be a shift from simple trade agreements to the facilitation of international trade and investment, so as to increase the development impact of trade and investment.

 (Photo credit: World Economic Forum Inclusive Growth and Development Report 2017)

 

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