Today’s GDP figures won’t tell us whether life is getting better — here’s what can

Kristy Muir, UNSW; Isabella Saunders, UNSW, and Megan Weier, UNSW

We are a country that has become richer than we possibly ever could have imagined. We have had 29 years of unprecedented, world-record holding economic growth.

Although economically things are a little precarious in the midst of the coronavirus outbreak and our worst bushfires in recorded history, ahead of the first gross domestic product (GDP) announcement for the year, it’s worth acknowledging this remarkable achievement.

But what has it meant for people’s lives? The figures tell us little about whether life is getting better.

In 1991, the last time GDP went backwards for two consecutive quarters, 258,226 babies were born in Australia.

Samantha and Andrew

Let’s call one of them Samantha, born in Bently, an area of high socioeconomic disadvantage in Western Australia, and the other Andrew, born in the suburb of Griffith in the Australian Capital Territory.

During the first two years of their lives, around one in 10 families with children were in a jobless household.

Andrew’s parents had jobs. Samantha’s didn’t.

By the time Samantha and Andrew were 25, in 2016, average household disposable income was twice what it had been when they were born, even after accounting for higher prices.

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But it’s not hard to see that, despite economic growth, their lives were different.

Samantha had less education, was underemployed, in housing stress and skipping meals to feed her kids. Andrew had higher education, was employed full-time, lived with high-income parents and was saving for a deposit for a place of his own.

While economic growth made us wealthier as a country, it hasn’t been good for all of us.

We need a measure that sits alongside gross domestic product that tells us whether we are actually getting better off.

What matters is whether we are really better off

The idea of a broader measure of social progress isn’t new – a collaboration called the Australian National Development Index has been underway a few years now, and the Australian Bureau of Statistics used to publish “Measures of Australia’s Progress” until budget cuts in 2014.

New Zealand introduced a “well-being budget” last year, targeting mental health, child welfare, Indigenous reconciliation, the environment, suicide, and homelessness, alongside traditional measures of productivity and investment.

Labor’s treasury spokesman, Jim Chalmers, has promised to do the same when Labor is next in office.

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How do we measure well-being?

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Australia’s Social Progress Index, launched last month by the Centre for Social Impact at UNSW Sydney and the Social Progress Imperative will go further, and much further than the national accounts to be released today.

It will enable the well-being and opportunities to be ranked and compared by location and time.

The online tool enables anyone to explore how we are tracking on 12 components grouped into three domains: basic human needs, foundations of well-being, and opportunity.

Finding the components wasn’t easy.

We needed to consider data availability, data detail, sample sizes, and reliability. We considered more than 400 possibilities.

While it is by no means the only (or perfect) way of understanding Australian living standards, it pushes us significantly beyond GDP.

It asks and answers universally important questions, such as:

• Do people have adequate housing with basic utilities?

• Do people have access to an educational foundation?

• Are people free to make their own life choices?

• Is this society using its resources so they will be available to future generations?

Economic growth doesn’t tell us much

The results show a stark disconnect between economic and social progress. While our GDP has been rising, we have fared poorly on environmental quality and access to information and communications.

At a state and territory level, despite having high gross state product per capita, Western Australia and the Northern Territory ranked 7th and 8th on most of the indicators.

The rising tide has not lifted all boats.

This is evident in Andrew and Samantha’s lives (the Australian Capital Territory ranks first overall, Western Australia 7th) and also in the aftermath of the bushfires.

People were cut off from power, information, communication, and access to resources. Many struggled to breathe. We lost much of our ecosystem.

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The economy is fundamental to improving our well-being and fuelling our social progress, but it isn’t everything and it isn’t necessarily inclusive.

If we had inclusive growth we wouldn’t be able to predict babies’ futures by the postcodes in which they were born. We would be able to meet basic human needs regardless of how much was spent and earned each quarter.

Today’s national accounts will be important, as a spur to asking other important questions, rather than as the final answer.

Kristy Muir, Professor of Social Policy / CEO, Centre for Social Impact, UNSW; Isabella Saunders, Research Assistant at the Centre for Social Impact, UNSW, and Megan Weier, Research Fellow, UNSW

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Take care when examining the economic impact of fires. GDP doesn’t tell the full story

It is possible to calculate the impact impact of fires, but not using GDP.
Shutterstock/Andrew Brownbilll/AAP

Janine Dixon, Victoria University

Estimates of the economic damage caused by the bushfires are rolling in, some of them big and some unprecedented, as is the scale of the fires themselves.

These types of estimates will be refined and used to make – or break – the case for programs to limit the impact of similar disasters in the future. Some will be used to make a case for – or against – action on climate change.

But it’s important they not be done using the conventional measure of gross domestic product (GDP).

GDP measures everything produced in any given period.

It is a good enough measure of material welfare when used to measure the impact of a tourist event or a new mine or factory or something like the national broadband network, but it can be misleading – sometimes grossly misleading – when used to measure the economic impact of a catastrophe or natural disaster.

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That’s because it measures the positives brought about the recovery from disasters but leaves out some of the negatives caused by the destruction.

For example:

• building a new house has a positive impact on GDP, even if the old house was burnt down

• a military evacuation has a positive impact on GDP, even though the circumstances that make it necessary are life-threatening and traumatic

• bushfires stimulate GDP by creating more demand for health services, even as the victims suffer from smoke inhalation, burns or post-traumatic stress disorder.

It is possible to get at the full story

Economic modelling pioneered in Australia, and used to estimate the impact of terrorism and epidemics makes it possible to prepare measures of welfare that take account of the costs of disasters.

Among the immediate costs in the first months after a bushfire disaster would be:

• the direct cost of fire-fighting

• the cost of temporarily relocating residents

• health costs, such as treatment of burns and respiratory illnesses

• loss of work days associated with firefighting, injuries, illnesses, displacement and loss of life

• a downgrading of consumer confidence

• destruction of assets including homes, farms, businesses and natural resources and the associated disruption of economic activity including tourism, agriculture and housing

• the cost of replacing or rebuilding these assets

Longer term impacts would derive from:

• health problems such as post-traumatic stress disorder leading to negative impacts on quality of life and labour supply

• long term damage to ecosystems, including contamination of water, and extinction or severe loss of animal species including those necessary to agricultural production, such as bees

• reputational damage leading to possible permanent downgrading of tourism activity in affected regions and in Australia more broadly

• potential ongoing reluctance to invest in Australia

• potential increases in cost of living in bushfire prone regions due to increases in insurance costs.

It involves going beyond GDP

The longer term impacts of disasters on a nation’s GDP are clearly negative, deriving from a decline in productive capacity (labour, capital and natural resources) which unambiguously detracts from economic welfare.

In the immediate aftermath, expenditure on reconstruction of homes and other assets can add to GDP, but the funding of these activities (whether direct or through insurance) adds to debt and can drag on household consumption, either immediately or in the future. A related measure, Gross National Income (GNI) takes this into account and is generally a better measure of economic welfare.

Bushfire-induced health expenditure stimulates both GDP and GNI but detracts from welfare.

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Suffering from post-traumatic stress disorder, for example, can hardly be considered an improvement in standard of living.

To offset this inappropriate “good news”, it is possible to construct an index of leisure-adjusted GNI which takes into account the downgraded quality of leisure time.

As a starting point for such estimates, the prime minister’s department sets the statistical value of a year of life free of injury, disease and disability at A$182,000 (2014 dollars).

And it depends on where you are

Aggregated measures like GDP, GNI and leisure-adjusted GNI do not show the distribution of economic impact.

An event that strips a small amount from the incomes of everybody is different from one that decimates just a few regions, yet looks the same in a nationwide measure, so it is important that any economic analysis also looks at regional impacts.

The work is yet to be done, but it is safe to say that the conventional link between GDP and economic welfare (“more is better”) breaks down when assessing tragedies, particularly ones with profound regional impacts.

When campaigning to be US president Bobby Kennedy (John F Kennedy’s brother) said that GDP measures “everything… except that which makes life worthwhile”.

It’d be wise to bear that in mind when considering the policy response to the bushfires.

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Janine Dixon, Economist at Centre of Policy Studies, Victoria University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Second Wave of Deportations Hits Foreign Christians in Morocco

Muslim hardliners pressure government; nationals fears they may be next victim of ‘purging.’

ISTANBUL, May 21 (CDN) — In a second wave of deportations from Morocco, officials of the majority-Muslim country have expelled 26 foreign Christians in the last 10 days without due process.

Following the expulsion of more than 40 foreign Christians in March, the deportations were apparently the result of Muslim hardliners pressuring the nation’s royalty to show Islamic solidarity.

The latest deportations bring the number of Christians who have had to leave Morocco to about 105 since early March. Christians and expert observers are calling this a calculated effort to purge the historically moderate country, known for its progressive policies, of all Christian elements – both foreign and national.

“I don’t see the end,” said Salim Sefiane, a Moroccan living abroad. “I see this as a ‘cleansing’ of Christians out of Morocco, and then I see this turning against the Moroccan church, which is already underground, and then persecution of Moroccan Christians, which is already taking place in recent days.”

At least two Moroccan Christians have been beaten in the last 10 days, sources told Compass, and police have brought other Moroccan Christians to police stations daily for psychologically “heavy” interrogations.

Authorities are enquiring about the activities of foreign and local Christians.

Forcibly Ejected

Legal sources said that according to Moroccan law, foreigners who have lived in the country for more than 10 years cannot be deported unless they are accused of a crime. They have the right to appeal the deportation order within 48 hours.

With only hours’ notice and forced escort to the country’s exit ports, almost none of the deportees were able to appeal their deportations.

“Most of these [deportations] are happening over the weekends, when the courts are closed,” Sefiane said. “Most of them are done in a way where they’re bringing them in [to the police station], intimidating them, and manhandling them out of the country. Many of them are not even going back to say goodbye to their wives, or even to pack a bag.”

With the exception of three foreigners, in none of the forced deportations did authorities produce an official deportation order, sources said. In many cases, Moroccan officials used embassies to notify foreigners that they were being deported. In most cases, foreigners were presented with a document in Arabic for them to sign that stated that they “understood” that they were being deported.

Compass learned of one case in which a foreigner was forced to the airport, and when he resisted he was forcibly drugged and sent to his native country.

“The expats in the country are very vulnerable, and the way it has happened has been against the laws of the country,” said a European Christian who was deported last week after nearly a decade of running his business in Morocco. “When I tried to walk away from the situation, I was physically stopped.”

The deported Christian said that authorities never informed any of the Christian foreigners of their rights, when in fact there are national laws protecting foreigners. 

“Basically they are trying to con everyone into leaving the country,” he said.

Deported foreigners have had to leave their families behind in Morocco, as well as their friends and communities. Many of the deportees were the male breadwinners of the family and have left their families behind as they try to decide their future.

“It’s devastating, because we have invested years of our lives into our community, business community and charity sectors,” said the European Christian. “People flooded to our house when they heard I was bundled into the back of a police car by the local authorities. It was like a death in the family – forcibly ejected from the country without being able to say goodbyes, just like that.”

The deportees have included Christians from North America, Latin America, Europe, Africa, New Zealand and Korea.

“It’s come out of left field,” said the European. “No one really knows why this is happening.”

Internal Pressure

A regional legal expert said on condition of anonymity that a small number of extremist Muslims have undertaken a media campaign to “get [Christians’] good works out of the public eye and demonize Christians,” in order to expel them and turn the nation against local Christians – some of whom are third-generation followers of Jesus.

“There are too many eyes and ears to what they want to do to the native Christians,” said the expert. “They’re trying to get to them …They want to shut down the native Moroccan Christians.”

Deportation orders are coming from the Ministry of Interior, and speculation on the reason for the sudden spike in expulsions has centered on the arrival of a new, hard-line Muslim interior director in January.

Moroccan officials have cited “proselytism” as the reason for the deportations. Reuters news agency reported Religious Endowments and Islamic Affairs Minister Ahmed Toufiq as saying “proselytism” and “activism of some foreigners” had “undermined public order.”

On April 12 local media reported that 7,000 religious Muslim leaders signed a document describing the work of Christians within Morocco as “moral rape” and “religious terrorism.” The statement from the religious leaders came amid a nationwide mudslinging campaign geared to vilify Christians in Morocco for “proselytism” – widely perceived as bribing people to change their faith.

Religious rights advocates point out that under Article 18 of the United Nations Universal Declaration of Human Rights, the more than 100 foreigners who had lived in Morocco, some for decades, not only had the right to stay in the country but had contributed to the nation. 

“They expelled people who helped build up the country, trained people, educated Moroccan children, cared for orphans and widows, increased the GDP and trade,” said the regional legal expert. “These people they expelled weren’t even proselytizing under their own law. There’s an international standard, yet they changed the definition of the terminology and turned it into this horrible ‘religious terrorism.’”

One of the country’s most prestigious educational institutions, George Washington Academy in Casablanca, has come under fierce criticism from media and investigation by authorities.

“The biggest problem is the image the Ministry of Justice is pushing about who the Christian foreigners are,” said another observer on condition of anonymity. “All the articles have been extreme exaggerations of the manipulative aspect of what foreigners were doing, and especially when it comes to minors.”

Local Christians have reported to sources outside of Morocco that attitudes towards them, which used to be more tolerant, have also shifted as a result of the extremist-led campaign, and some are experiencing family and societal pressure and discrimination as well.

International Forces

While the deportations have perplexed the local Christian community, the regional legal expert said that in some ways this was calculated and inevitable.

He said that the Organization of the Islamic Conference had been putting pressure on countries across the Middle East and North Africa to remove their Christian elements. Iraq, with its decline in Christian population from a few million to a few hundred thousand over the last decade, is a case in point.

“Countries which have been more forward looking and spoken about rights, freedoms and equalities have been pressured to demonstrate their Muslim credentials, and the best way to do this is to sanitize [religious] minorities from the borders,” he said.

Congressman Frank Wolf (R-Va.), co-chairman of the Tom Lantos Human Rights Commission, has called congressional hearings on June 17 to examine the human rights situation in Morocco in light of the expulsions. On Wednesday (May 19) Wolf called on the U.S. government to suspend $697.5 million in aid it has pledged to Morocco based on criteria that it is “ruling justly.”

“We’ve been told the Christians are a threat to the national security, so they are using terrorism laws against peace-loving Christians,” said the deported European Christian. “But it is massively backfiring.”

The Christian described how the Moroccan friends of Christian foreigners have been asking why they are being deported for their faith.

“They are being impacted by the reality of Christ through this, and it’s having more of an effect on the community than years and years of quietly demonstrating Christ peacefully and lawfully,” he said. “By breaking their own laws, they have opened the lid on the reality of the life of Christ.”

There are an estimated 1,000 Moroccan Christian converts. They are not recognized by the government. About 99 percent of Morocco’s population of more than 33 million is Muslim.

Report from Compass Direct News