Pandemic shows up gaps in GDP metrics in region–Apec unit
THE pandemic has exposed gnawing gaps in the computation of GDP that would require countries in the Asia and the Pacific region to look beyond it, according to the Asia-Pacific Economic Cooperation (Apec) Policy Support Unit (PSU).
In a statement, Apec PSU Director Denis Hew said GDP had “blindspots” that prevented it from measuring the distribution of economic benefits; the value of services provided via digital platforms; and the costs of pollution or environmental degradation.
These gaps in computing GDP were deemed crucial during the pandemic. Hew said the focus of Apec host Malaysia, on Beyond GDP initiative, will help highlight the need to expand definitions and measurements of economic progress.
“It is fortunate and timely that Malaysia’s priorities have kept this Beyond GDP initiative on Apec’s radar. Covid-19 should not distract economies from implementing such long-term projects,” Hew said.
“If anything, it should inject our efforts with renewed exigency. We need better economic measurement tools and new indicators to inform policy in this new world with its emerging challenges,” he added.
Hew explained that given the pandemic’s impact on livelihoods and jobs, the primary concern in the past few months has been inequality.
Covid-19, Hew said, has been a major disrupter that affected all people equally but has worsened pre-existing conditions such as poverty, food insecurity, and the lack of access to health care.
This is a major concern, Hew said, given that experts are seeing a second wave of infections in different parts of the world.
“As GDP does not capture distribution of economic benefits, the case for looking beyond it is strengthened when we explore policies to remedy social and economic inequality,” Hew said.
Pollution, digital services
Further, GDP’s failure to measure the impact of pollution and the environment prevents governments from addressing the heavy consumption of single-use plastics during the pandemic.
Apart from these, Hew said, with the pandemic affecting mobility, the use of digital platforms and services has been crucial in economies. However, this is not part of existing GDP estimates.
Hew said governments should realize that the digital economy is here to stay and including it in GDP estimates would be paramount.
“The digital economy is here to stay and will continue to play an outsized role in our lives. Covid-19 only hastened the ongoing digital transformation. [We should] work to expand our definitions and measurements of economic progress [are] not all that new within Apec,” Hew said.
In February, the Philippine Statistics Authority (PSA) disclosed that the latest rebasing and revising of the GDP is expected to better reflect the performance of business-process outsourcing (BPO) operations, health, and education.
National Statistician Claire Dennis S. Mapa told reporters that the changes in the computation of Philippine GDP will not only be a 2018 base year but will see the addition of new subsectors in the production side of the National Income Accounts (NIA).
Mapa said the BPO sector will be placed in the new Information, Communication Technology (ICT) subsector under the Services sector. This is one of 6 to 7 new subsectors to be added under Services.
Mapa said the changes were made in consultation with PSA’s stakeholders. He said this is being done in accordance with PSA’s mandate.
The PSA’s functions include the review of the government’s statistical programs, including departments and agencies as well as local government units.