Key-note address by the President to The Third OECD World Forum on "Statistics, Knowledge and Policy"

Busan, 27.10.2009  |  speech

Key-note address by Dr. Danilo Türk, President of the Republic of Slovenia, to The Third OECD World Forum on "Statistics, Knowledge and Policy"
Busan, 27 October 2009


Distinguished President of the Republic of Korea, Mr. Lee Myung-bak,
Distinguished Secretary-General of the OECD, Mr. Angel Gurria,
Distinguished delegates,
Ladies and gentlemen,

It is a great honour and privilege to offer the key-note address on a subject of such great importance to this august global forum.

The question of measuring social progress is critical for development and, indirectly, for political stability and peace. It is almost axiomatic to say that what we measure shapes what we collectively strive to pursue, and what we pursue determines what we measure. This has been stated time and again, including in a major recent report on measurement of economic performance and social progress.

The link between policy and statistics has always been very close and often subject of lively debate. At the time of crisis and transformation this link has gained additional importance. The policies to be put in place at a time like ours must be effective and, at the same time, strengthen social justice and human rights. They have to be designed with the necessary sophistication and responsibility. Hence the special importance of how we measure social progress.

In my remarks I propose to look at the question of measuring social progress and development from three perspectives:

• From the perspective of human rights,
• From the perspective of national policy making and
• From the perspective of implementation of the millennium development goals.

Let me start on a personal note.

Two decades ago, the ending of the cold war opened a new chapter in the discussions on development. The market-based model of development won the day and in the former socialist countries extensive economic transition followed.

For people like me, who, at that time, worked as United Nations experts on human rights, in particular economic, social and cultural rights, that transition brought new challenges. The debate on human rights changed and the focus of attention shifted to the area of implementation. The questions of implementation of the right to work, the right to education and the right to the highest attainable standard of physical and mental health became central. These rights were no longer a subject of ideological polemic among antagonistic development models. The question became more practical and required a realistic understanding of progress made in their implementation. This requirement made it necessary for human rights lawyers to deal with indicators of social progress and with a variety of statistical information.

You might ask why human rights lawyers would have to deal with statistics. They might be expected to stick to their own trade, i.e. legal norms and procedures. But legal standards at the time were clearly insufficient. They were too broad and imprecise to determine the course of governments' action and the required measures. Therefore, they had to be combined with a wide variety of economic and social indicators, which, at the end, allowed judgement on the level of achievement in the realization of economic, social and cultural rights, as well as formulation of the relevant policy recommendations. Legal standards and statistical information had to go hand in hand. It also became clear that in the areas such as the right to work, where relatively precise labour standards existed, the need for statistical information was less critical. On the other hand, for example, the right to the highest attainable standard of physical and mental health has remained an area in which international standards are very general and where the national regulations vary considerably. An international assessment of policy thus requires reliance on health statistics and research.

Obviously, all this was at the time (late 1980s) not entirely new, but it became much more important globally, due to the changed international environment. In the subsequent years important work was done by the UNDP, which, through its series of human development reports, not only enriched the understanding of development, but also demonstrated the need for innovation and creativity in the way we measure human dimensions of development.

These debates gave rise to new realizations while at the same time they confirmed two basic premises of understanding which had been already firmly established earlier:

First, the statistical concepts of GDP and GDP per capita, while generally useful in policy making, were clearly insufficient for measuring social progress, let alone for assessment of implementation of economic, social and cultural rights. The expectation that growth would necessarily "trickle-down" to benefit the individual in his legitimate expectations of social development and the realization of human rights had been an illusion. Unfair distribution of the fruits of growth has been and continues to be a major obstacle of social development and has to be properly understood and, indeed, addressed by policies inspired by the idea of social justice.

Second, human rights such as the right to work, the right to education and the right to the highest attainable standard of physical and mental health can be implemented only progressively. Under the terms of the UN Covenant on Economic, Social and Cultural Rights, a treaty which binds 160 state parties today - an impressive number by any standard - all the state parties must take steps "to the maximum of their available resources", to make the implementation of the Covenant effective. The agreed interpretation of this phrase underlines that even in times of severe constraints - whether caused by a process of adjustment, of economic recession, or by other factors - the vulnerable members of society must be protected by appropriate programmes of social and economic policy. This is an important principle which policy makers are not allowed to neglect and where expert advice is clearly needed.

Ladies and gentlemen,

The basic considerations shared by the global community of human rights activists are not dramatically different from the basic concerns of the policy makers. This was the case two decades ago and it is the case today. At the same time, the question of the meaning of social progress and development remains as elusive as ever. The setting of priorities of social development is shaped by economic, cultural and political factors, which vary from one society to another. No wonder therefore that the Istanbul Declaration, adopted at the Second World Forum on Statistics, Knowledge and Policy two years ago, emphasized the need to "encourage communities to consider for themselves what "progress" means in the 21st century."

All over the world the Governments and political leaders egage in the search for the answer to the question of what "progress" means for their societies. In the industrialized world it is becoming clear that the level of economic saturation requires policy makers to look beyond the GDP as the measure of progress. High levels of growth are not expected any time soon and progress has to be defined in terms other than growth. Furthermore, it has been realized that GDP growth ignores sustainability: Growth may increase income today, but lower it in the future. And the financial crisis has brought bitter lessons. For example, systemic risk - raising financial products created an illusion of growth while in reality they opened the way to the current recession and to the largest contraction of GDP in decades.

In much of the developing world, GDP growth continues to be an essential indicator of social progress. How else can one imagine to bring large segments of population from rural poverty to the point at which the poor become consumers and where social progress is expresssed in such undeniable indicators as high education levels and longer life expectancy? What is needed is a comprehensive policy framework for each country. Such a framework should allow the use of the existing indicators, including the per capita GDP growth, and should include - with the necessary sense of priority - the issues of income distribution and participation in decision making. Obviously, the policy framework, which includes consideration of issues of income distribution and participation goes to the heart of national politics and national sovereignty. It can only be fully developed by national governments. International actors can help, but they need to be aware of the sensitivity of the matters at hand.

I shall return to the issues pertaining to the global debate on social progress and the implementation of the Millennium Development Goals later on. But let me, before that; reflect briefly on some of the challenges of social progress facing my country, Slovenia - a fairly developed country, a member of the EU and the Eurozone, a country, which has suffered the effects of the recent recession.

At present we are starting to see the difference between growth and social development with unprecedented clarity. Like in the developed world in general we, in Slovenia, are witnessing the easing of recession. Although the contraction of our GDP will be considerable - probably more than 5 percent by the end of this year, we have reasons to expect stabilization and modest growth in the next year. Therefore, as a technical matter, one could assert that recession will soon be over. Yet this assertion brings very little consolation and is not hailed by anybody, least of all the policy makers. They have to think in terms of specific challenges to social development, in particular those related to growing unemployment.

The rate of unemployment in Slovenia has grown to a level above 9 percent. For the national policy makers the most disturbing element is the rise of unemployment from 7,0 percent in December 2008 to 9,4 percent in July 2009. In the short period of seven months unemployment rose significantly and is likely to stay high in the foreseeable future. This creates a set of challenges for the policy makers.

It is obvious that a responsible government must secure the necessary social safety net and social transfers to help the unemployed. However, government assistance and social transfers to the unemployed do not solve the problem. While they mitigate the worst economic effect on those who have lost work, the threat of poverty continues, mainly in the form of social exclusion. This situation is not sustainable. Social peace, which may be established by virtue of government subsidies and social transfers, is precarious. It can be effective in a short run, but in the long run the only real solution is in the productive and decent work.

In Europe, combining social justice and economic competitiveness represents the historical essence of development. Decent work is a necessary ingredient of that essence and has been put at the center of the EU policy documents, such as the 2005 Lisbon Strategy on Growth and Employment. Today, at the time of recession and its aftermath when higher rates of unemployment are a fundamental problem, the implementation of such a strategy will be both more pertinent and more difficult. It will call for new approaches to the identification of employment opportunities and for new methods of measuring social progress.

In this context the recommendations made by the Commission on the Measurement of Economic Performance and Social Progress, which was published a month ago ("Stiglitz, Sen, Fitoussi Commission") offer some new and potentially important avenues. They also show how the way we measure social progress can help.

The report suggests a shift in focus from measuring economic production to measuring people's well being, an emphasis on the household perspective and on a joint consideration of income, consumption and wealth. It also suggests to broaden the income measures to non-market activities including the home-produced goods and services. In addition, it suggests that measuring both objective and subjective dimensions of human well-being is possible and desirable.

This is a promising set of propositions. It provides an opportunity to take a fresh look on a number of classical factors of human well-being - including work. First of all, it rightly suggests not to look at work in isolation, but together with other "personal activities". Paid work has to be observed and measured together with other activities such as unpaid domestic work, commuting and leisure. However, the report recognizes the primary importance of paid work, which provides income as well as identity and social interactions, but which may be also a source of negative experiences and risks. All these dimensions of work are missed by simple employment counts. The qualitative aspects of work are a subject of specialized studies, most notably in the context of ILO's effort to promote the concept of decent work, a multidimensional concept which includes such elements as decent work hours, adequate earnings, stability and security of work, safe work environment and social dialogue. Each of these elements can be measured with several indicators and, as a result, a clearer picture of the human well being at work can be drawn.

Let us assume that such a measurement is completed. What kind of issues should be put before the policy makers? In my opinion, we need to address two sets of issues.

On the one hand, certainly, there will be a good reason to improve the conditions of work. The concept of decent work is an expression of a value per se: Labour is not a commodity; therefore care for its quality is important in any decent society.

But beyond that there is another question of great importance: Should policy makers look for new approaches to paid work, those which might be expected to provide new employment opportunities? In some situations there are reasons for shorter work hours and a different organization of work, allowing among other things more work to be done from home. In others there will be a need to strengthen the civil society based sector of employment, to expand the number of non governmental organizations, which are able to combine paid work for some with productive involvement of volunteers who might be interested in doing meaningful work for smaller earnings. Social entrepreneurship can be given fuller meaning and larger scope of activity.

Obviously, ideas like these are not new and they have been carried out in different ways and to different extent in a number of societies around the globe. It is also clear that establishing legal conditions for innovation in employment requires country specific analysis and carefully designed legislation. However, in the aftermath of the current recession, it seems necessary to look at the questions of paid work and other personal activities in new ways. Measuring the variety of issues related to this is becoming increasingly important and would be helpful to national and international policy makers.

Finally, ladies and gentlemen, allow me a few remarks on the question of implementation of the Millennium Development Goals.

It has been widely recognized that the implementation of MDGs has been uneven and generally below expectations. The current recession has added to the problem. Policy makers cannot be satisfied with what has been achieved, notwithstanding some major successes of the past decade, in particular those made in Asia.

However, from a methodological point of view, measuring progress towards the achievement of the MDGs represented an important success, as it has reached far beyond the sole criterion of GDP or GDP per capita. It has proven, beyond any doubt, that it is possible, and sometimes even likely, that fast growth of GDP and slow poverty reduction go hand in hand. A greater focus on income distribution is called for. At the same time the question of sustainability of social progress represents a policy challenge: How much inequality is necessary to drive development without endangering the social balance required to make development socially sustainable?

These are questions for policy makers. But monitoring and the requisite technical expertise must also progress. Millennium development goals may not be met entirely in 2015, as originally hoped for, but there is no reason why the progress made could not be presented to the international community in a sufficiently comprehensive and persuasive manner. We all know that the world is an inperfect place. But the world does not need new promises. It needs a full picture about its achievement, and, above all, about the ways of poverty reduction. Statistics can help in developing better understanding of the process of development and in devising more effective policy tools to reduce poverty and to enhance social development and social justice.

New techniques of measuring progress can help. Let me take the example of time distance needed to achieve development objectives. It is obvious that economic and social development is uneven - different parts of the world are progressing faster than others. How much do the policy makers and the general public need to know about the differences in time distance to achievement of various MDGs? How important is it to compare the starting positions of different countries and their progress in a given period of time?

As the methodology of measurement of the implementation of MDGs progresses it becomes more and more relevant to compare - not only the levels of achievement of different countries but also time needed to reach particular achievements. Translating development into time based criteria would help policy makers to better understand how much time needs to be devoted to "catching up" with those countries with which they wish to compare their own.

A report by the International Telecommunications' Union published earlier this month has looked at the time distance in the context of the mobile phone penetration for developing countries. The report has concluded that developing countries are, as a group, at the level at which Sweden was 9,4 years earlier. In contrast, their infant mortality rate showed a time lag of 72 years. It is without doubt much easier to give people cell phones than to build a health system and to create other conditions, which ensure low infant mortality. A comprehensive set of indeces, capable of demonstrating the relevant time distances for achievement of different development objectives would be of considerable help to policy makers in the evaluation of policies in different areas, in the understanding of specific requirements of each policy area and in the effort to define the desired objectives with a realistic understanding of the time needed for their achievement.

Ladies and gentlemen,

Examples I referred to show that social progress and economic development require, among other things, innovation and sophistication in the way we measure them. The search for ever better, more comprehensive and more convincing and precise ways of measuring progress is a vitally important task of our era. This is necessary to make the implementation of the accepted normative propositions such as economic, social and cultural rights realistic. It is necessary to find new answers to problems posed by slow growth and persistent unemployment. And it is necessary to make the timelines of the Millennium Development Goals fully understood. Only then will the policy making be adequate.

Ladies and gentlemen, policy makers depend on you.

I wish you a successful conference.