On 18 March 1968, Robert (Bob) Kennedy made a strong attack on GDP, describing it as a yardstick that measures everything except that which makes life worthwhile. We can avoid poetic flourishes and easy triumphalism, but at last it seems someone has realised this.
Italy is the first G7 nation to provide its key economic and financial planning document (known as the DEF) with 4 sustainable well-being indicators, taking the reforms to the 2016 state budget further forward. The DEF is accompanied by an attachment defining Equitable and Sustainable Wellbeing (ESW). In other words, national growth is no longer measured solely on the basis of GDP objectives.
So far, four indicators have been introduced: pending final approval of the list – based on the Istat panel – the Italian Ministry of the Economy & Finance has decided that a number of key indicators will already be applied this year with the DEF approved in April:
– the performance of average available income;
– inequalities in incomes;
– non-participation on the jobs market;
– carbon and other climate-impacting gas emissions.
The National Reform Program, an integral part of the DEF, identifies three key tools for working towards the ESW objectives: the inclusion of ESW in the DEF itself, the 2017/2030 National Sustainable Development Strategy which presents the UN indicators for the 2030 Agenda, and the Gender Budget.
Although the strategy takes a medium/long-term approach, the document sets out a number of short-term objectives. These include taking household economic conditions back to pre-crisis levels, narrowing the income and jobs access inequality gaps to pre-2008 levels and strengthening professional development programs.
The gender budget is also a tool for gauging the degree to which the government’s economic policies have different effects on men and women and how they should be corrected in order to ensure uniformity.
This type of approach requires every economic and social operator in the country to adopt sustainability policies, and to pay attention to the well-being of employees. A change of direction is needed on these questions today. And Italy is leading the way in this new awareness of environmental sustainability, the first of the G7 nations to take a stand against those economic-analytical approaches that regard GDP as the sole indicator of economic growth.