• Growth not enough to realize UN global goals

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    GREG NAVARRO

    GREG NAVARRO

    In September 2015, the United Nations (UN) announced that its 193 members had unanimously adopted the Sustainable Development Goals (SDGs)—also called Global Goals—to take the place of the Millennium Development Goals (MDGs), the push for which will end with the close of 2015.

    We at Deloitte partnered with the Social Progress Imperative, a non-profit that has been measuring the social progress of countries around the world since 2013, on an analysis of how the UN’s 17 Global Goals can be achieved based on the world’s current Social Progress Index (SPI), and what we found is that ‘business as usual’ isn’t going to cut it.

    Much of the success in realizing the MDGs has been credited to economic growth, which helped raise income levels in high population countries such as China and India. But the new Global Goals require a different, more ambitious treatment.

    What we’ve seen with the Global Goals is we can actually relate all 17 of them to the dimensions that comprise the SPI. The goals primarily relate to the Basic Human Needs and Foundations of Wellbeing dimensions, but we also noted that these new goals, compared to the MDGs, focus more on the Opportunity dimension, which can’t be easily addressed by economic growth.

    As defined by the Social Progress Imperative, the SPI is an aggregate index of social and environmental indicators that capture three dimensions of social progress: Basic Human Needs, Foundations of Well-being and Opportunity, which are further broken down into 12 components and 52 indicators. The components of the Opportunity dimension – such as tolerance and inclusion, and personal freedom and choice – may be embedded in cultural or societal beliefs that are harder to alter.

    Global social progress in 2030
    Based on data from the US Department of Agriculture Economic Research Service, economic growth is forecast to be relatively steady over the next 15 years. For the 133 countries ranked by the SPI, real GDP per capita is predicted to increase 58.8% from $14k to $23k over the period under consideration. This is equivalent to the world’s average annual income changing from one that is similar to Thailand ($14k) today, to one that is similar to Hungary ($23k) today.

    If the same relationship between GDP per capita and SPI scores continues to hold into 2030, this GDP increase will not lead to notable social progress increases: The 2015 world average SPI of 61.0 would improve to 62.4.

    That’s merely a 2.3% increase. It would be like moving from a similar social progress level as Cuba at 60.8 to that of Nicaragua at 62.2, and it would mean that 15 years from now, the world SPI score would remain lower than today’s average for those countries classified as having Upper Middle Social Progress, which is 69.9.

    The Philippines in 2030
    For 2015, the Philippines’ SPI stands at 65.5, which classifies us as a country with Lower Middle Social Progress. In 2030, if the current relationship between GDP per capita and SPI holds, we will have an SPI of 67.59, elevating us to the Upper Middle category, comparable to Mexico today (67.50).

    Under this condition, however, the country’s score for Personal Rights will decline – from 62.00 in 2015 to 59.49 in 2030, and it will decline further even if the country performed 5% above the trend level of social progress given its GDP per capita.

    Meanwhile, improvements in the components of Tolerance and Inclusion, and Ecosystem Sustainability will be negligible – 0.5 and 0.6, respectively. The component of Health and Wellness will show no improvement.

    These negligible to negative relationship between GDP per capita and these SPI component scores indicate that higher income may have conflicting negative or positive effects on the underlying indicators. For instance, within the Shelter component, while high income may improve the quality of housing available to Filipinos, it may have a negative impact on environmental sustainability.

    Considering the unique challenges faced by each country measured by the Index, interventions will vary across economies for the world to collectively achieve an aspirational level of social progress: a global SPI of 75 is needed in order to achieve the UN’s Global Goals.

    Based on the 2015 SPI, the Philippines performed poorly in the component of Personal Safety, and could also improve its score in the component of Tolerance and Inclusion, particularly in the following indicators: tolerance for immigrants, and discrimination and violence against minorities.

    The role of government and business
    The limits of relying on economic growth to attain development in the different dimensions of social progress makes the case for governments, business, and international institutions to collaborate and act. Social progress components in the Well-being and Opportunity dimension, especially in countries where institutional or cultural barriers may impede progress, need to be further studied.

    We could learn from successful social progress countries – particularly those that score high in Personal Safety and Tolerance and Inclusion – in developing and applying targeted policies that address these weaknesses in our country.

    With increased stakeholder, regulatory and consumer pressures, more companies are also seeking to integrate social impact into their business. Contributing through quality employment or the provision of services typically provided by the state may enable businesses to generate synergies that have valuable impact on the social development of the country.

    The author is Managing Partner & CEO of Navarro Amper & Co., the local member practice of Deloitte Touche Tohmatsu Ltd, a UK private company limited by guarantee (“DTTL”). Deloitte provides audit, consulting, financial advisory, risk management, tax and related services to public and private clients spanning multiple industries. Deloitte has more than 220,000 professionals worldwide, including those in Deloitte Southeast Asia Ltd., which covers Brunei, Cambodia, Guam, Indonesia, Lao PDR, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam.

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