Israel gold bullion coins money wealth economy 370.
(photo credit: Eli Gross/Keren Or)
It’s only natural to be concerned by the recent news from the Central Bureau of Statistics that Israel’s Gross Domestic Product (GDP) growth has slowed to 2.2 percent, down from 4.6% the previous quarter. A strong shekel has led to a drop in imports, a turn of events in contrast to the aims of Finance Minister Yair Lapid’s recent calls for 4-5% growth rate. But economic growth need not be the be all and end all; and while growth may be a catalyst for social progress, growth alone cannot answer all of society’s problems.
In the media, particularly in these challenging economic times, we’re often confronted with data about economic growth, almost always viewed through the prism of countries’ levels of GDP. The economic downturn has made policy-makers all over the globe even more focused on a small set of economic indicators as the yardstick for progress. But what GDP fails to measure, and what economic growth alone cannot guarantee, are the things that matter most to ordinary people, such as security, opportunity and health.
These are tough concepts to measure, but we need to recognize that economic growth alone is a poor gauge of this kind of progress.
Policy-makers need a better standard, something to take into account the subtleties of the modern, networked world that complements GDP while avoiding its crudeness.
To avert the inevitable economic doom and gloom caused by natural GDP fluctuations, a new measurement is needed, asking the questions that really matter to people across the globe like “Can I get on in life confident in my own security?” and “Can I get an education?” A comprehensive set of integrated indicators is better able to provide a true account of whether national policies and programs are really moving a country in the right direction.
It is to fill this gap in understanding that the Social Progress Index was launched earlier this year. Created by Harvard professor Michael E Porter and a team of luminaries from the private and philanthropic sectors, the index measures a country in terms of social outcomes, not economic proxies. And Israelis should take heart in the findings of this Index, published earlier this year, which ranked Israel 16th out of the 50 nations measured.
This is particularly impressive, considering the unique challenges faced by Israel, and it helps to prove that GDP alone does not determine a country’s progress. Israel, in fact, placed highest on the overall index of any of the (relatively few) countries measured in the Middle East and North Africa. It will be interesting to see how Israel fares when more countries from the region are added to the index this April.
When the unique indicators are broken down, Israel’s most impressive ranking (seventh overall) was in the field of “foundations of well-being,” where 14 variables were assessed, including health and wellness, access to basic knowledge and access to information and communications. Israel also did well in terms of fulfilling its citizens’ basic human needs, with the country ranking second overall in terms of nutrition and availability of basic medical care, and scoring well in terms of “air, water and sanitation” and “personal safety.” With regard to personal safety, Israel performs well, particularly with its low levels of violent crime – scoring 10th overall out of the 50 countries measured.
Of course, not all the findings were positive.
For example, when it came to “opportunity” and its variables such as “personal freedom and choice” and “equality and inclusion,” Israel performed less well, ranking 23rd, 34th and 37th, respectively. But the point is that a single measure of economic growth hides a more complex matrix of social progress, painting only a partial picture of a society’s successes and failures.
Governments such as Israel should look beyond the almost unassailable focus on GDP, that one-dimensional measure of success, and instead try to address the strengths and weaknesses in terms of social progress outcomes. The Social Progress Index gives policy-makers the luxury of understanding just what they are doing right, and wrong, and gives them the opportunity to make changes in the areas that need them most: changes that can greatly improve the well-being of an individual and a nation, even without a growth forecast in sight.
The writer is the executive director of the Social Progress Imperative (www.socialprogressimperative.org) and author of the best-selling Philanthrocapitalism (www.amazon.com/Philanthrocapitalism-How-Rich-Save-World/dp/B002VPE6Z2)