432 Views
Ph/DR: UNCTAD: Launch of a new Index allowing countries to better measure their economic potential
Countries can use the new version of the Index of Productive Capacities to measure their economic progress beyond Gross Domestic Product (GDP) according to a press release issued this June 20, 2023 in Geneva, Switzerland by the United Nations Conference for Trade and Development (UNCTAD). This is a new version of its Index of Productive Capacities (ICP) to help countries establish diagnostics and more accurate measures of their economic performance.
Aline ASSANKPON
According to the United Nations Conference on Trade and Development (UNCTAD), the new version of the Index of Productive Capacities (PCI) makes it possible to design more effective policies and to implement them. The KPI measures the ability of countries to produce goods and provide services, which is essential for international trade and global production value chains. PCI has its own online portal with publications, manuals, resources and tools. It maps the productive capacities of economic development and provides a better measure of development than other more traditional indicators such as GDP. It is multidimensional and measures inputs and economic potential rather than outputs.
The statement highlights that for governments, the PKI is a powerful and practical tool to track progress over time and shape informed policies to close development gaps. It can help countries respond to the call of United Nations Secretary-General Antonio Guterres to go beyond the PIPB and measure the things that really matter to people and their communities.
“No nation has ever developed without the necessary productive capacities, which are essential for countries to achieve sustained economic growth accompanied by accelerated poverty reduction, economic diversification and the creation of ‘jobs’ said UNCTAD Secretary-General Rebeca Grynspan.
UNCTAD defines productive capacities as “the productive resources, entrepreneurial capacities and productive linkages that together determine a country’s ability to produce goods and services and enable it to grow and develop”.
Country Ranking
The ICP shows that developed economies have higher productive capacity scores, with economies such as Denmark, Australia and the United States leading the way with an average score of 70 out of 100 on the index. composite. Among developing regions, Asia and Latin America perform better overall than Africa. Some economies such as Chile, China and Qatar are gradually approaching the performance of developed countries with an average score of 61.
At the other extreme are African economies such as Chad, Malawi and Niger, each with an overall ICP score below 20. Countries such as Rwanda, Senegal and Togo have improved their ICP score between 2018 and 2022, but this improved performance did not substantially change their overall rankings.
In Latin America and the Caribbean, Barbados, the Dominican Republic and Panama have made notable progress in developing their production capacities during the same period. Similarly, Asian economies such as Bangladesh, Saudi Arabia and Timor-Leste saw notable performance gains in the composite index.
In contrast, several developing countries in various regions have regressed. These include Brunei, Darussalam, Guatemala, Kyrgyzstan, Lebanon, Namibia, Sirname and Uganda.
