Questioning the SDG paradigm shift

A recent stocktaking summit on progress towards the UN Sustainable Development Goals (SDGs) was held in New York on September 24-25th.

Antonio Guterres, the secretary-general, calls the current SDG strategy “the deepest reform in decades” and a “paradigm shift” of development thinking. On this point, we disagree.

This is the second article in the “SDG Reality Check” series, focusing on inclusive, decent work, and economic growth (SDG 8), and contends with two main issues: a) the overemphasis of the GDP indicator as a measure for development; b) lack of emphasis on the problems facing women at work.

GDP growth — the ‘king indicator’ 

GDP has emerged more as a policy tool for economic planning than an indicator for socio-economic wellbeing. We don’t realize that, for the most part, the “tail wags the dog” and the news of GDP growth is used by political parties to win elections.

The likes of the ADB and the World Bank have yet to acknowledge this fact and the rhetoric surrounding the virtues of GDP growth remains unquestioned. The UN guidelines towards realizing “decent and inclusive” growth appear to have followed suit. The per-capita GDP growth is listed as the first, and most important, target of SDG 8. This is problematic for a number of reasons — the GDP indicator is only an estimate, not a summary of receipts from transactions, given the size of the informal economy (about 70% of the economy).

Growth is determined by comparing present surveys with those of the past. But the national surveys for comparison are hopelessly out of date. For example, the last “annual” survey of the informal economy was carried out in 2003, and the one before in 1992, according to the International Growth Centre (2017).

So there is a fair amount of guesswork in the estimation of GDP growth in Bangladesh and even if it were accurate, rapid GDP growth is a poor indicator of the “health of the economy” from the viewpoint of sustainability.

For example, the overuse of chemical fertilizers increases the GDP statistic, although nutrients drained from the soil leaves it less productive in the future. Farmers’ livelihoods thereby become increasingly unsustainable given the vicious circle wherein current practice requires ever-increasing input to produce an equivalent output.

The history wherein GDP became “king of all indicators” dates back to the Great Depression. It was later popularized in the US to estimate funds needed from the private sector for armaments for the war effort in the 1940s. Former WB chief economist Joseph Stiglitz argues for the need for a new metric since the GDP “hides” inequalities, the value of domestic work, and perpetuates environmental “externalities” through the political process.

He reminds us that recent financial crises in the US clearly showed that median incomes were reduced while GDP growth increased. Surveys of household consumption tell the same story in Bangladesh — food consumption in vulnerable households has not grown in line with overall GDP growth.

In our cities, rapid GDP growth translates into traffic jams, which means fewer business meetings per day. For both managers and employees, it means less efficient work due to travel exhaustion.

The bottom line for investors is always whether or not they can perceive a return on investments, irrespective of GDP predictions. So for investors at home and abroad, news of GDP growth doesn’t automatically induce investment.

Finally, the GDP ignores the cost of market regulation. Ignoring “environments of trust” prevents the combination of local wealth for investment and in turn — fewer jobs created. Foreign investors hesitate for the same reason.

Working women and the hostile political economy

SDG 8 speaks to us all — from the bonded sex-worker to the brick-breaking day-labourer, to overworked and harassed girls and women at our garment factories, to boys and men at unsafe construction and ship-breaking sites, to the university graduate, and to women who wish to combine careers with motherhood. As we have already seen, it also speaks rather loudly to investors both at home and abroad.

Consider that, for tens of millions of citizens, obtaining a decent job is an urgent matter of survival. Here we may pause to ask what we mean by “decent” work. The International Labour Organization (ILO), which first coined the term, defines it as “productive employment with decent working conditions for everyone” — meaning a fair income, security in the workplace, and social protection for families.

But there are few opportunities for “decent work” in our unregulated economy. The informal economy accounts for some 70% of the entire economy. A significant part of it is plagued by chronic poverty, which, by definition, is a risk to one’s life.

According to government sources, this threat faces about one in three citizens. Here we imagine that work and “productive employment” can mitigate such risk. But what sort of employment and what sort of work?

The ILO reports that the worst forms of bonded labour, where children would inherit debt from their parents and were forced to work for food and shelter, is no longer practiced in the tea-estates in Bangladesh, as in the past.

But legislating towards “decent work” (a term coined by the ILO), decent pay and decent working hours remain a fundamental challenge in most workplaces.

We may consider the case of women at work and ask whether workplaces across the income divide are as welcoming or “hostile.” Recent studies show that the participation rate of women in the national workforce has risen. But the participation rate in itself is no indicator of decency in terms of working conditions, wages or facilities for working mothers.

For two decades, international organizations, government, and NGOs have advocated for women’s empowerment. But what has actually been achieved? Do women have the power to voice complaints such that their working conditions have changed?

Or are they trapped, trading off loyalty and submission for survival? Frequent media reports suggest that much hasn’t changed.

The rigidity of social norms ensures that women and girls still face a traditional predicament. For example, in 2019, why must pregnancy still disrupt a woman’s career path with such finality?

Daycare for children in factories, offices, university campuses is completely absent, with few exceptions. It means the temporary disruption of pregnancy and maternity becomes permanent, and often return to work or study becomes a practical impossibility.

Granted, decent work concerns boys and men as well as working women. But given the current global commentary on unjust practices towards working women — policy, as envisioned in SDG 8, is surprisingly inadequate. The most paralyzing issues facing working women are completely absent in SDG 8.

Nor do the other SDG goals that deal with discrimination towards women adequately address: a) facilities for maternity leave; b) daycare for kids or; c) equal pay for equal work.

While sexual harassment is mentioned under SDG 5 (gender equality), evidence relies on surveying the incidence of such violation. The norm is that cases of abuse tend to be under-reported, and thus such evidence will be unreliable.

The need for an inclusive job-strategy 

ILO Country Director Tuomo Poutiainen highlights the fact that the current five-year plan is in “critical need for a job strategy.” The statement is non-trivial and can be taken at face value.

ILO’s mandate (1919) predates the UN’s mandate and it advocates with more autonomy compared to other UN agencies. It recognizes that the shift to a greener economy has the potential to create jobs across a range of sectors, and substitutes “green growth” for GDP growth in their own planning and evaluation.

Jens Stanislawski, in collaboration with Mobina Islam Aishi, is a Senior Researcher and Consultant at Social Resources Management.