Presentation on Sustainable Tourism by UWI Sustainable Economic
Presentation on Sustainable Tourism by UWI Sustainable Economic Development Unit (UWI/SEDU) to the OAS IDSD Workshop Module I Economic Issues in Decision Making Trinidad and Tobago October 27 th – 31, 2003 Presented by Sharon Hutchinson & Marlene Attzs
Content of Presentation l l l Meaning and importance of growth The meaning and importance of development The role of sustainable development in Latin America and the Caribbean The link between the environment and the economy Choices in the economy: Viewing the economy as an economic good Economic Indicators in Decision Making Slide 2
Economic Growth l l Economic Growth… traditionally equated with increases in GDP/GNP GDP… total output for final use produced by residents and non-residents of a country. GDP doesn’t include deductions for depreciation of physical capital or depletion/degradation of natural resources Economic Indicators in Decision Making Slide 3
Economic Growth (cont’d) l GNP… GDP + net factor income from abroad which is income residents receive from abroad for factor services less payments to non-residents who contribute to the domestic economy. Economic Indicators in Decision Making Slide 4
Economic Growth (cont’d) l l Hence we could speak of : +tive (increasing) rates of economic growth – if GDP increased from one period to another -tive (decreasing) rates of economic growth if GDP decreased from one period to another Constant rates of economic growth – if GDP remained the same from one period to another Economic Indicators in Decision Making Slide 5
From Economic Growth to Economic Development l l Aristotle, “Wealth is evidently not the good we are seeking for it is merely useful for the sake of something else” ED can be thought of as beginning where EG ends that is, at the heart of ED is the notion of human well being… how do we use economic performance, measured by EG, to enhance people’s lives? To improve their well being? Economic Indicators in Decision Making Slide 6
Review of Economic Development l Development … creating conditions for the realisation of human personality l Development. . . based on three criteria: whethere has been a reduction in poverty, unemployment and inequality Economic Indicators in Decision Making Slide 7
Indicators of Development l l Adequate Educational Levels Freedom of Speech Citizenship of a country that is truly independent (both economically and politically) Others conditions – sense of security; freedom of worship etc… Economic Indicators in Decision Making Slide 8
Development: which way now l The process of Economic development has to be concerned with what people can and cannot do e. g. whether they can live long, escape avoidable morbidity, be well nourished, be able to read and write and communicate, take part in literary and scientific pursuits etc. Economic Indicators in Decision Making Slide 9
Other indicators of Development l Reduction in poverty. How do we measure if someone is poor? l Head count ratio… proportion of population below the poverty line l Income gap ratio…measures the depth of poverty by the extent of the gap between the poverty line and average income of the poor as a proportion of the poverty line Economic Indicators in Decision Making Slide 10
Key definitions l Poverty Line …. The percentage of the population living below the specified poverty line. * $11 a day (per person for a family of three)—at 1994 international prices, adjusted for purchasing power parity. Economic Indicators in Decision Making Slide 11
Other composite measures used to describe development l HDI … human development index l GDI. . Gender Development Index l GEM … Gender Empowerment Index l HPI. . Human Poverty Index Economic Indicators in Decision Making Slide 12
Development Indices l HDI… measures average achievement of a country in basic human capabilities, health, income distribution, education Economic Indicators in Decision Making Slide 13
Development Indices l GDI… measures achievements in same capabilities as HDI but takes account of inequalities between women and men. GDI can be thought of as a discounted HDI Economic Indicators in Decision Making Slide 14
Development Indices l Gender Empowerment Measure (GEM)… examines whether women and men are able to actively participate in economic and political life and take part in decision making. Economic Indicators in Decision Making Slide 15
Development Indices l Human Poverty Index (HPI)…focuses on the way the poor and deprived fare in each community. Uses the same indicators as HDI but combines elements of “deprivation” to provide an aggregate judgement on the extent of poverty. Economic Indicators in Decision Making Slide 16
Development Indices l HPI. . – Longevity : HPI uses the % of people expected to die before age 40; – Knowledge : HPI uses the rate of illiteracy – Lack of a decent standard of living : a composite index which includes % of people with access to health service and safe water; % of malnourished children <5 yrs old Economic Indicators in Decision Making Slide 17
Sustainable Development l What do we mean by sustainable development? l Based on Seers’ definition of “development” i. e. to be concerned with “…creating conditions for the realisation of human personality…” Economic Indicators in Decision Making Slide 18
Sustainability of Development l Sustainability … a characteristic of a process or a state that can be maintained indefinitely. l Sustainability therefore refers to a process or a state that is not constrained by time or space Economic Indicators in Decision Making Slide 19
Why Sustainable Economic Development? l Why be concerned with sustainable economic development? Economic Indicators in Decision Making Slide 20
Meaning of Sustainable Development “Development that meets the needs of the present generation without compromising the ability of future generations to meet their own needs. SD is not a fixed state of harmony but rather a process of change in which the exploitation of resources, the direction of investments … are made consistent with future as well as present needs. ” (UNCED, 1987, p. 8) Economic Indicators in Decision Making Slide 21
SD vs ED l Exploitation of resources can either be “responsible” (and leave something for future generations) or “irresponsible (use it up now!!) Economic Indicators in Decision Making Slide 22
What is Unsustainable Development? l Development which compromises future development possibilities either (a) via excessive resource depletion and waste generation or (b) imposing too heavy a burden of environmental degradation or cleanup © not ensuring that the rents that accrue from current exploitation are invested so that future generations can share Economic Indicators in Decision Making Slide 23
Economic Growth (GDP) Increases in Material Output Economic Development Greater emphasis on social objectives e. g. poverty, education, health, Sustainable Economic Development Recognising the need for environmental Protection, inter- and intra-generational equity. Economic Indicators in Decision Making Slide 24
SD and ED l SD adds to our understanding of ED by: – – Providing an explicit recognition that development and the environment are not mutually exclusive Integrating environmental concerns into traditional development economics Incorporating social and environmental concerns into economic decision-making Seeking to ensure the economically efficient management of natural resources Economic Indicators in Decision Making Slide 25
Tradeoffs among the Three Main objectives of Sustainable Development Economic Efficiency Social Equity Economic Indicators in Decision Making Preservation of the Environment Slide 26
The Economics of Sustainable Development l The economic goal is: “… to maximize the net welfare of economic activities while maintaining or increasing the stock of economic, ecological and sociocultural assets over time…. and providing a safety net to meet basic needs and protect the poor. ”(Mohan Munasinghe, 1993: 16) Economic Indicators in Decision Making Slide 27
Figure : Interface between the economy and the environment The Source Function of the Environment. E. g. Minerals, Soils and Biodiversity The Economy The Sink Function of the Environment from waste from production and consumption i. e. solid, liquid, gaseous, Toxic waste Natural Events / Disasters. Interface -Stormsl. Hurricanes/Flooding -Earthquakes -Volcanoes -Viruses (HIV/ AIDS, SARS)
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