World Economic Order and Demography Sustainability Indicators

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World Economic Order and DemographySustainability
Indicators

• PEEP course Global Trends
• 20 September 2006
• Mats Johansson
• Lisa Van Well

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World Economic Order

• Processes of globalisation
• Comparative advantages, economies of scale and
  scope
• Trade flows between regions of the world
• Models of economic world order
• Global economic institutions (World Bank, IMF,
  WTO)

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National Income Accounting

• Defining GDP and PPI (PPP)
• GNIused by World Banks Atlas (3-year average)
  Method takes into account all production in the
  domestic economy (such as GDP), plus the net flow
  of factor income (profits, labour income from
  abroad)
• Defining NNP, NIAs

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Gross Domestic Product (GDP)Closed economy
GDPFCCIG-TIOpen economy GDPFCCIGX-Z-TI
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Business cycles and structural transformation

• Business cycles Regular cyclical fluctuations in
  the economy (short term), repetitive phases
• Structural transformation From one economic
  phase to another qualitative different phase
  (long term), a completely new phase

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Business cycles Investment a central
variableincreases the production
capacity,income creating (profits, wages),
increases the purchasing power, demand for
productsMore demand, more investments ?higher
employment?upswingAfter a while production
capacity gt consumption capacity?
overcapacity?decreased investments,
unemployment, income decline?downswingIn the
downswing depreciation of K ?reinvestment,
increased investment, higher employment? income
creating ?upswingToday more synchronised
business cycles (effects of the globalisation
processes)
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3
4
4
5
1
2
3
2
5
1
Spatial product cycles global shifts.
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Spatial product cycles three cases
Sales, vol, dev.
Extensions of product life cycles continuous
global dominance
Substitution of new products, technology global
shifts
Change in, products, technology no global shift
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Demography

• Population trends in various parts of the world
• Dependency ratio
• Problems with population decline
• Problems with population growth
• New trends in agriculture
• Migratory movements

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Demographic development

• Point of departure The demographic equation
• Popt1 - Popt(Birthst - Deathst) (Inmigt -
  Outmigt)
• Popt1 Popt Total population change
• Births-Deaths Natural population change (CBR
  CDR)
• InternalIn-migration Out-migration
  Net-migration
• ExternalImmigration Emigration Net-migration
• Central concept Total Fertility Rate (TFR)
• standardised for changes in the age structure
• How many children a woman will have if the
  age-specific fertility rates should prevail in
  the future
• Reproduction level 2.1

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Population a prerequisite for development

• Production factor both in goods and service
  sectors
• Income creating
• Purchasing power
• Consumer
• Large cohorts have greater impact on the economy
  than small cohorts long demographic waves with
  economic and social effects
• Reproduction factor
• Population growth stimulus for economy and
  wealth

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Migratory movements
Push and pull factors the stick and the
carrot Push factors (labour surplus) from
agriculture to industry, from rural to urban
areas, from developing to developed
countries Pull factors (labour shortage) once
again, from agriculture to industry, from rural
to urban areas, from developing to developed
countries Different parts of the world
different outcomes Developing countries
urbanisation without development? Developed world
urbanisation, a precondition for development?
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The demographic transition still
valid? Different regions- different
patterns Today low fertility, ageing, low
reproduction potential Population decrease in
some parts of the word? Low fertility,
fluctuating mortality, Wars, diseases,
catastrophes
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Problems with population growth

• The law of diminishing returns
• Population grows faster than GDP GDP/cap falls
• Decreased purchasing power bad consumers
• Self-subsistence
• Fast population growth fast urbanisation
  (overcrowding, slums, marginalisation)
• Unemployment, underemployment
• Environmental problems
• Ecological problems, eroding production
  potentials
• Vicious circles
• A third world point of view

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Problems with population decline

• Hamper consumption and investment
• Low economic activity
• Stagnation
• Depopulation, dying regions
• Ageing
• High dependency rate
• Press on health and elderly care
• Press on pensions
• Low reproduction potential
• Positive side New technology, higher
  productivity, new substitution possibilities

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Migratory movements in the world 1990-2000
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World Migration Trends Since 1950s, four major
areas of immigration have emergedNorth America,
Australia, Western Europe and the Arab oil
countries. Immigration more important for
population development low fertility rates in
the developed countries Increased feminisation
among the labour migrants The 1990s - new
migration patterns?The collapse of the Soviet
Bloc Increased migration officially but slowed
down compared to the 1980s in reality. The slow
down a consequence of decreasing migrants in the
developing countries. Increased labour market
segmentation migrants in 3D-jobs, especially
from developing countries.
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Today very small population increase From
emigration to immigration From natural population
increase to natural population decrease
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A typology with regard to sustainable demographic
development. Six types. Source Adapted from
ESPON 1.1.4

• 1. Ptgt0, PNgt0, PMgt0.
• Double positive regions - In-migration and young
  population/high TFR. High sustainability both
  in short and long term. The most favourable case
• 2. Ptgt0, PNgt0, PMlt0.
• Growth regions with out-migration -
  Out-migration and young population/high TFR.
  Short term sustainability. Long term eroding
  sustainability because of lopsided age structure
  (out-migration).
• Ptgt0, PNlt0, PMgt0.
• Growth regions with natural decrease -
  In-migration of people with low TFR. Natural
  population decrease because of lopsided age
  structure and/or low TFR. Dependent on
  in-migration. No sustainability in long term
  weak reproduction potential
• Ptlt0, PNlt0, PMgt0.
• Declining regions with in-migration -
  In-migration and old population/low TFR.
  In-migration of elderly people and/or singles,
  low reproduction potential. Dependent on
  in-migration. Low sustainability both in short
  and long run.
• Ptlt0, PNgt0, PMlt0.
• Declining regions with natural increase -
  Out-migration but still young population/high
  TFR. Traditionally high fertility regions.
  Falling TFR -gt low sustainability.
• Ptlt0, PNlt0, PMlt0.
• Double negative regions - Out-migration and old
  population/low TFR, depopulation. No
  sustainability both in short and long term. The
  worst case.

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A many-sided patternType 1PentagonIrelandBene
luxCentral EuropeSouthern SpainType 6Parts
of Northern PeripheryThe Baltic StatesParts of
EnglandFormer DDREastern Europe Parts of Poland
A typology with regard to demographic
development 1995-2000 in EU29.
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TendenciesWest Central Europe immigration
areaNorthern Europe Different patterns from
emigration to immigration areaSouthern
EuropeFrom labour export countries to
immigration countriesBalkans and Turkey
turbulent emigration area from labour export to
the collapse of former YugoslaviaEast Central
EuropeThe collapse of the Soviet Bloc -
emigration
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Migratory balancesthe second half of the 1990s
in EU29
From peripheral areas to central areas
especially to Pentagon Rural exodus among
youngsters Within Pentagon tendencies to
polycentric development, symmetrical flows,
periurbanisation, metropolitan cores -
out-migration areas In Northern and Eastern
Europe - monocentric development, concentration
to metropolitan areas Migration from East to
West Income gaps still of importance But most
important Border effects
Source ESPON 1.1.4
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• International migration some specific (European)
  issues
• Labour market migration has slowed down
• Internal migration from peripheral to
  metropolitan areas
• East-west migratory flows in Europe
• Borders are still barriers
• Asylum seekers from the third world
• Increased labour market segementation regional
  polarisation
• Migrations of highly qualified persons
• Migrations of retired people
• In the future replacement migration?

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Total Fertility Rates (TFR) in EU 29, 1999
The traditional pattern high TFRs in rural
areas, low TFRs in urban areas, especially
metropolitan regions Today a closed gap General
trend Since 1960 decreasing TFR in all
regions Regional divergence 1960-1980, regional
convergence 1980-2005 Higest Ireland, Norhtern
Europe, parts of France Lowest TFRs Southern
and Eastern Europe A sharp decrease in Eastern
Europe today Result depopulation and dying-out
regions
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Structural depopulation eroding territorial
cohesion?
Structural depopulation Estimated by a
combination of depopulation factors Worst
Northern periphery, Germany,Northern Italy,
parts of Spain, Greece, Spain and
Portugal Eastern Europe - still young population
but future depopulation (falling TFRs,
out-migration, eroding reproduction potential)
In EU29 Both expansive and retarding
regions! In EU29 Both urban and rural areas
depending of continuous in- migration! But
In-migration from where? Replacement
migration?
Source ESPON 1.1.4
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• Measuring Sustainability

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World Bank

• Mission to fight poverty and improve the living
  standards of people in the developing world.
• Specialised UN institution

• Provides loans, policy advice, technical
  assistance and knowledge sharing services
• Promotes growth to create jobs and to empower
  people to take advantage of opportunities

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International Monetary Fund (IMP)

• Organization of 184 countries
• Goal to foster global monetary cooperation,
  secure financial stability, facilitate
  international trade, promote high employment and
  sustainable economic growth, and reduce poverty.

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World Trade Organisation (WTO)

• Multilateral Organisation dealing with rules of
  trade between nations
• Negotiation Forum for trade agreements and
  dispute resolution, technical assistance
• Principles Free trade without discrimination,
  fair competition, transparency

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Environmental costs of Globalisation/Free Trade?

• Environmental costs of consumption
• Environmental costs of transport
• Environmental costs of production

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Sustainable Development-Beyond concepts to action

• Think globally, act locally
• Each local authority should enter into a dialogue
  with its citizens, local organizations and
  private enterprises and adopt a local Agenda 21
• Earth Summit- Agenda 21 (ch. 28)

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Indicators and strategiesLocal Agenda 21

• Europe 5292 LA21 in 36 countries (80)
• Africa 151 LA21 in 28 countries
• Asia-Pacific 674 LA21 in 17 countries
• Latin America 119 LA21 in 17 countries
• N. America USA 87, Canada 14
• Middle East 79 LA21 in 13 countries

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Local Agenda 21 in Sweden

• 289 municipalities
• Focus on stakeholder dialogue (citizens and
  businesses), process, integration of environment,
  economy and social aspects

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Local SD indicatorsSustainable Seattle (NGO)

• Waste Reduction and Recycling Program
• Environmental Priorities Project
• Comprehensive plan
• Sustainable Seattle Citizens Initiative
  Voluntary network and civic forum, developed
  local sustainability indicators

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Seattle sustainability indicators Criteria

• Relevant
• Reflect community values
• Attractive to local media
• Statistically measurable
• Logically or scientifically defensible
• Reliable
• Leading and
• Policy-relevant.

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European Sustainable Cities Towns Campaign
project

• Towards A Local Sustainability Profile European
  Common Indicators
• Launched by Environmental Commissioner Margot
  Wallström, 1999

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European Common Indicators Survey method

• Citizen Satisfaction with the Local Community
• Local Contribution to Global Climatic Change
• (and/or local Ecological Footprint)
• Local Mobility and Passenger Transportation
• Availability of Local Public Open Areas and
  Services
• Quality of Local Outdoor Air
• Childrens Journeys to and from School
• Sustainable Management of the Local Authority and
  Local Businesses
• Noise Pollution
• Sustainable Land Use
• Products Promoting Sustainability
• equality and social inclusion , local governance,
  empowerment, democracy, local/global relationship
  , local economy, environmental protection ,
  cultural heritage/quality of the built
  environment

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Principles of sustainable governance- strategies

• Urban Management, including a range of tools for
  managing sustainability
• Policy integration-vertically and horizontally
• Ecosystems thinking, with a social dimension
• Cooperation and Partnership Learning by doing
  and by example, networks
• EUROPEAN SUSTAINABLE CITIES EXPERT GROUP
  ON THE URBAN ENVIRONMENT, MARCH 1996, BRUSSELS

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Global indicators?

• World Development indicators (WDI) 630 different
  indicators (World Bank Group)
• Millennium Development Goals indictors
• Bellagio Principles (1996 by international group
  of measurement practitioners, organised by IISD),
  indicators impossible for consensus, but
  developed principles for assessment of
  sustainable development
• what matters gets measured!

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Bellagio Principles

• Guiding Visions and Goals for SD
• Holistic Perspective
• Essential Elements (inter and intra-generational
  equity, ecological conditions, market and
  non-market activities)
• Adequate scope (timeframe, local and far-reaching
  impacts, build on historic and future conditions)
• Practical focus (to give clear picture of
  sustainability)
• Openness and accessible
• Effectively communicated, especially to
  politicians
• Broad participation
• Ongoing assessment (adjustable goals)
• Supportive of Institutional capacity

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Environmental Sustainability Index (ESI)

• Involved 3 groups World Economic Forums Global
  Leaders for Tomorrow, Environmental task force,
  Yale University and Center for International
  Earth Science Information (Columbia University)
• Measures overall progress towards environmental
  sustainability in 142 countries by 20 indicators
  and 5 core components
• Environmental systems, Reducing Stresses,
  Reducing Human Vulnerability, Social and
  Institutional Capacity, Global Stewardship

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Problems with measuring Sustainable Development?
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The social constructions of sustainability

• Sustainability is inherently problem-driven
  concept, rather than scientific (like climate
  change)
• About values and norms of the type of lifestyles
  we want and attitude to the resources upon which
  these are based.