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Inclusive Development Index 2018: Performance Analysis of BRICS Economies

Jan 25, 2018 12:56 IST
    Inclusive Development Index 2018 Performance Analysis of BRICS Economies
    Inclusive Development Index 2018 Performance Analysis of BRICS Economies

    Inclusive Development Index (IDI) 2018 for emerging economies of the world released by the World Economic Forum (WEF) on 22 January 2018. It was an annual assessment of total 103 countries’ economic performance has been taken into account that measures the eleven dimensions of economic progress along with the GDP of respective countries. The index has three main pillars- growth and development, inclusion and intergenerational equity – sustainable stewardship of natural and financial resources.

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    World Economic Forum’s System Initiative through its Inclusive Development Index (IDI) project aims to inform and enable sustained and inclusive economic progress of emerging economies based on deepened public-private cooperation through leadership and analysis, strategic dialogue and concrete cooperation, including by accelerating social impact through corporate action.

    India decelerated from the last year’s 60th rank among 79 emerging economies to 62nd place among 74 emerging economies this year. As compared to India’s neighbouring countries like Nepal (22nd rank), China (26th rank), Bangladesh (34th rank), Pakistan (47th rank) and Sri Lanka (40th rank), it has been a concern for the Indian policymakers. However, India’s overall performance in the last five years has improved but it does not meet the present government slogan “Sabka Saath Sabka Vikash”.

    Performance Analysis of BRICS Nations

    Here, we have analysed the performance of BRICIS Economies on the basis of three individual pillars which are known as the National Key Performance Indicators, measured by World Economic Forum in its Index. The BRICS economies have a mix performance in IDI 2018. All the BRICS economies except Brazil have improved in the last five year trend IDI overall performance but it does not meet the expectations.

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    Inclusive Development Index 2018: BRICS Economies

    Country

    IDI 2018 Rank

    5 Year Trend IDI Overall (%)

    Russian Federation

    19th

    0.48

    China

    26th

    2.94

    Brazil

    37th

    -3.26

    India

    62nd

    2.29

    South Africa

    69th

    2.49

    China

    China has ranked at 26th place in overall IDI ranking for 2018 among emerging economies while it has ranked first among the emerging economies in terms of GDP per capita growth followed by other BRICS economies India (3), South Africa (69), Russian Federation (70) and Brazil (73). Gross domestic product per capita in constant 2010 dollars (2016) is used for value for all the economies.

    China has 6.8% GDP per Capita Growth and 6.7% Labour Productivity Growth but its overall performance is brought down by the poor performance on inclusion and intergenerational equity. Despite rapid growth over the past two decades in terms GDP per capita growth, China still shows the sign of high levels of inequality which is evident from its 55th place among emerging economies in the Inclusion pillar of the Index.  The same problem is associated with India while it has 5.6% GDP Growth and 5.4% Labour Productivity Growth but has poor performance in other social indicators like inclusion and intergenerational equity.

    India

    India, with an improving trend, ranks 62nd out of 74 emerging economies. The country performs best (44th) in terms of Intergenerational Equity and Sustainability, profiting from a low dependency ratio that is set to further decline as the economy reaps the dividends of an extremely young population (28% of the Indian population was younger than 14 years in 2017). Though the incidence of poverty has declined in India over the past five years, 6 out of 10 Indians still live on less than $3.20 per day. Given the prevalence of inequality both in terms of income and wealth, there is substantial scope for improvement for India in this aspect.

    Both labour productivity and GDP per capita posted strong growth rates over the past five years, while employment growth has slowed. Healthy life expectancy also increased by approximately three years to 59.6.

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    Brazil

    Brazil (37), despite of having -1.3% GDP per Capita Growth and -1.2 Labour Productivity Growth has performed better than India in terms of overall performance in IDI. The major reason behind this overall better performance in IDI 2018 is that Brazil has performed well in other two parameters i.e. inclusion and intergenerational equity as compared to India. Among the Latin America and emerging economies of world, wealth concentration is higher in Brazil and it showing the increasing trend in the last five years in terms of wealth concentration in few hands. A lot of structural reforms in Brazil are in process and has raised the expectation of economy watchers which can change the future of the Brazilian economy.

    Russia

    The Russian Federation’s overall rank is 19th and also it has performed better as compared to the performance of last five years. Russia’s performance is backed by better performance in Economic Development than other two indicators i.e. inclusion and intergenerational equity and sustainability. Among the most emerging economies of the world, Russia is known for providing decent living conditions to most of its population but when it comes to the distribution of wealth, it concentrated in a few hands only. The satisfactory rate of poverty (0.3%) and the good median living standards can determine the better and sustainable prospects for in the coming years.

    South Africa

    South Africa stood 69th in the list of Inclusive Development Index 2018 among the emerging economies of the world. South Africa’s overall performance in IDI 2018 is brought down by the lacklustre performance at various indicators as the low rate of employment, subpar health conditions and high inequality. However, the South Africans have a healthy life expectancy of only 54 years which is the lowest levels among countries with a GDP per capita of at least $5,000.

    Conclusion

    Over the decades, it has been found that India is focusing more on economic growth and it missed out the social equity section of the country which led to create a high level of inequality in terms wealth and income. As stated by WEF that the major emerging economies of the world are facing the wealth and income inequality is just because of the excessive reliance by economists and policy-makers on Gross Domestic Product which has become a prime focus of national economic performance in emerging economies.

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