Arc of Prosperity by ewI0i9o

VIEWS: 6 PAGES: 62

									 Whose economy? Scotland in
  Northern Europe: balancing
dynamic economies with greater
        social equality
  Whose Economy?
Poverty and Inequality
          Whose Economy?
      Oxfam/UWS seminar series
• Why persistent poverty exists alongside high
  economic prosperity, leading to significant
  inequalities in income and wealth, and in life chances
  and lifestyles, between individuals and communities.
  Why, despite decades of economic growth,
  regeneration and anti-poverty policies, many Scots
  face a life characterised by high mortality, economic
  inactivity, mental and physical ill-health, poor
  educational attainment, and increasing exclusion.
• Conclusion: Our Economy, A Whose Economy
  Seminar Paper, June 2011,
• Why do we have less poverty than the United States,
  but much more than Norway, Sweden and
  Denmark? The reasons lie very much more in the
  distribution systems of the respective countries than
  in the personal behaviour of people in poverty. Why
  some affluent Western democracies maintain
  substantial poverty and others are more egalitarian
  and accomplish low levels of poverty is mainly due to
  “the generosity of the welfare state”.

•   Adrian Sinfield, Whose welfare state now?, in Whose Economy?, http://policy-
    practice.oxfam.org.uk/publications/download?Id=436761&dl=http://oxfamilibrary.
    openrepository.com/oxfam/bitstream/10546/188809/5/dp-whose-economy-
    papers-complete-series-010911-en.pdf
                 Recent quote
• The prime minister said: “there are countries in
  Europe, small countries that make it on their own, but
  ... we are better off, we are stronger together, we're
  fairer together, we're richer together”.
• So must be able to measure strength, fairness, richness
  and so compare. And, given what we’ve heard here
  already this morning, can we identify an even better
  way?
• Are there countries that are more resilient, robust,
  competitive [stronger], more equal with less poverty,
  greater gender equality and a progressive tax/welfare
  system [fairer] and more prosperous [richer]?
Richer?
       International Monetary Fund (2011 estimate)

Rank              Country           US$
1                 Luxembourg        122,272
3                 Norway            96,591
4                 Switzerland       84,983
7                 Denmark           63,003
8                 Sweden            61,098
13                Finland           50,090
14                Ireland           48,517
21                Iceland           43,226
22                United Kingdom    39,604
International Monetary Fund (2011 estimate)
   Rank           Country   Intl. $
   1      Qatar             102,891
   4      Norway            53,376
   13     Sweden            40,613
   15     Ireland           39,507
   16     Iceland           38,079
   19     Denmark           37,741
   21     Finland           36,723
   22     United Kingdom    35,974
                   World Bank (2010)
Rank             Country          Intl. $

1      Luxembourg                 89,769

4      Norway                     56,894

10     Ireland                    39,727

12     Denmark                    39,558

14     Sweden                     38,947

19     Finland                    36,660

20     United Kingdom             35,860

21     Iceland                    34,949
       CIA World Factbook (2010)
Rank        Country     Intl. $

1      Qatar            179,000

5      Norway           54,600

17     Sweden           39,100

18     Iceland          38,300

20     Ireland          37,300

21     Denmark          36,600

26     Finland          35,400

27     United Kingdom   34,800
                                      0.0
                                            1.0
                                                  2.0
                                                        3.0
                                                              4.0
                                                                    5.0
                                                                          6.0
                                                                                7.0
                                                                                      8.0
                             Korea

                            Ireland




Source: OECD, ONS
                       Luxembourg

                            Turkey

                            Iceland

                          Australia

                            Mexico

                           Norway

                      United States

                           Canada

                          Portugal

                             Spain

                           Finland

                             Japan

                       Netherlands

                    United Kingdom

                            Greece

                            Austria

                            France

                      New Zealand

                           Sweden
                                                                                            Thirty year annual average GDP growth rate (1977-2007), %




                          Denmark

                          Belgium

                          Germany

                              Italy

                         Scotland

                       Switzerland
Scotland's long-term GDP growth performance
                  (1975-2005)




Source: Eurostat, OECD, Scottish Government
Indicator                          Scotland Denmark   Finland   Iceland   Ireland   Norway   Sweden
GDP growth - 30 year annual
average                               4       4         2         1         1         2        3

GDP per head                          3       2         2         2         1         1        2
Employment rate (15-64 yr olds)
                                      2       1         2         1         3         1        1

Productivity                          2       2         2         3         1         1        2
Entrepreneurial activity
                                      3       3         2         1         1         1        4
Total R&D as % GDP
                                      3       2         1         1         3         3        1
Business R&D as % total R&D
                                      4       2         1         3         2         3        1

Graduates as % of the
population (aged 25-64)               2       1         3         1         2         1        2

Population growth (1999-2006)
                                      4       3         3         1         1         2        3

Net migration as a % of the
population                            2       4         3         1         1         2        3

Export sales growth -3 yr annual
ave                                   4       3         3         2         3         4        2
Fairer?
    Income inequality in selected OECD countries




Source: OECD (2008), Growing Unequal? Income Distribution and Poverty in OECD Countries.
                Gini coefficients of income inequality in OECD countries, mid-2000s
  0.50




  0.45




  0.40




  0.35




  0.30




  0.25




  0.20




Note: Countries are ranked, from left to right, in increasing order in the Gini coefficient. The
income concept used is that of disposable household income in cash, adjusted for household
size with an elasticity of 0.5.
Source: OECD income distribution questionnaire.
          At risk of poverty or social exclusion, 2010

               % of the total population                  % of total population
                                      Persons
                                    aged 0-59       Persons falling under at least one
          Persons at-                                of the three criteria (at risk of
                        Persons       living in
            risk-of-                                   poverty or social exclusion)
                       severely     household
            poverty
                       materially      s with
          after social                                  2009               2010
                       deprived      very low
           transfers
                                        work
                                     intensity
EU27*            16.4         8.1            9.9               23.1               23.4
Denmark          13.3         2.7           10.3               17.6               18.3
Ireland             :           :               :              25.7                  :
Finland          13.1         2.8            9.1               16.9               16.9
Sweden           12.9         1.3            5.9               15.9               15.0
United           17.1         4.8           13.1               22.0               23.1
Kingdom
Iceland           9.8         1.8            5.6               11.6               14.3
Norway           11.2         2.0            7.3               15.2               14.9
SEASONALLY ADJUSTED UNEMPLOYMENT RATES (%) Nov 11
               Youth (under 25s)   Males          Females



   EA17                     21.7           10.1             10.7
   EU27                     22.3            9.7             10.0
 Denmark                    14.9            7.6              7.9
  Ireland                   29.3           17.3             11.4
  Finland                   19.6            8.2              6.7
  Sweden                    23.2            7.6              7.4
UK (Sept 11)                22.0            9.0              7.5
  Norway                     8.6            3.3              3.4
                   Net Replacement Rates for six family types: initial phase of unemployment

                                                   2009, different earnings levels


                          67% of AW                                         100% of AW                                        150% of AW

             No children               2 children              No children               2 children              No children               2 children


                     married                  married                  married                  married                  married                  married
                     couple                   couple                   couple                   couple                   couple                   couple
                                                            Single                                            Single
          Single                    Lone                                              Lone                                              Lone
                                                            perso                                             perso
          person                   parent                                            parent                                            parent
                                                              n                                                 n
                    One- Two-                One- Two-                One- Two-                One- Two-                One- Two-                One- Two-
                   earner earner            earner earner            earner earner            earner earner            earner earner            earner earner



Denmark      83      85     91       89       88      93      60       63     74       75       72     77       46       48     61       64       59     64

Finland      64      75     78       85       83      83      52       60     72       74       72     76       44       47     63       60       57     67

Iceland      77      72     89       84       77      91      77       80     86       83       83     88       56       61     71       65       67     74

Ireland      46      72     73       69       76      77      33       52     61       60       63     65       25       39     50       48       49     55

Norway       67      69     84       88       89      86      65       67     80       87       71     82       47       49     65       65       52     67

Sweden       69      69     85       83       80      86      48       48     69       65       58     71       36       36     58       51       44     60

United       55      66     59       72       77      69      38       46     49       64       71     58       26       32     39       46       51     47
Kingdom
TU Membership Density (2008)
over 90% in Finland;
80%–89% in Belgium and Sweden;
70%–79% in Denmark and Norway;
60%–69% in Italy;
50%–59% in Cyprus, Luxembourg and Malta;
40%–49% in Romania;
30%–39% in Austria, Ireland and Slovenia;
20%–29% in Bulgaria, the Czech Republic, Germany, Greece, Hungary,
the Netherlands, Portugal and the UK;
10%–19% in Latvia, Poland, Slovakia and Spain;
below 10% in Estonia and Lithuania.

Higher among women than among men in half of the 20 countries
examined – Denmark, Estonia, Finland, Hungary, Latvia, Lithuania,
Norway, Poland, Slovenia and Sweden
              Gender equality
•   Proportion in Parliament
•   Proportion on Company Boards
•   CEOs
•   Childcare
•   Etc.
          The Global Gender Gap Index 2010 rankings:
          Comparisons with 2009, 2008, 2007 and 2006
                     2010                2009                2008                2007                2006

  Country     rank       score    rank       score    rank       score    rank       score    rank       score



Iceland              1   0.8496          1   0.8276          4   0.7999          4   0.7836          4   0.7813

Norway               2   0.8404          3   0.8227          1   0.8239          2   0.8059          2   0.7994

Finland              3   0.8260          2   0.8252          2   0.8195          3   0.8044          3   0.7958

Sweden               4   0.8024          4   0.8139          3   0.8139          1   0.8146          1   0.8133

Ireland              6   0.7773          8   0.7597          8   0.7518          9   0.7457      10      0.7335

Denmark              7   0.7719          7   0.7628          7   0.7538          8   0.7519          8   0.7462

United           15      0.7460      15      0.7402      13      0.7366      11      0.7441          9   0.7365
Kingdom
                 Detailed rankings, 2010
            Overall        Economic       Educational    Health and       Political
                          Participation   Attainment      Survival      Empowerment
                               and
                          Opportunity

Country   Rank    Score   Rank    Score   Rank   Score   Rank   Score   Rank   Score

Iceland      1 0.8496        18 0.7540       1 1.0000      96 0.9696        1 0.6748

Norway       2 0.8404         3 0.8306       1 1.0000      91 0.9697        3 0.5614

Finland      3 0.8260        16 0.7566      28 0.9993       1 0.9796        2 0.5686

Sweden       4 0.8024        11 0.7695      41 0.9964      80 0.9729        4 0.4706

Ireland      6 0.7773        25 0.7409       1 1.0000      89 0.9700        7 0.3985

Denmark      7 0.7719        23 0.7438       1 1.0000      68 0.9743       10 0.3695

United      15 0.7460        34 0.7210       1 1.0000      90 0.9698       22 0.2933
Kingdom
   Press Freedom Index 2011/2012, Reporters
               without Borders
      Rank                      Country                       Score
        1=                      Finland                   -10,00
        1=                      Norway                    -10,00
        6                       Iceland                   -7,00

       10=                     Denmark                    -5,67
        12                      Sweden                    -5,50
        15                      Ireland                   -4,00

        28                  United Kingdom                2,00


http://en.rsf.org/spip.php?page=classement&id_rubrique=1043
Stronger?
   The Global Competitiveness Index 2011–2012
       rankings and 2010–2011 comparisons
      Country/Economy Rank/142         Score        GCI 2011–     GCI 2010–
                                                    2012 rank     2011 rank
                                                    among 2010
                                                    countries
      Switzerland              1       5.74               1             1
      Singapore                2       5.63               2             3
      Sweden                   3       5.61               3             2
      Finland                  4       5.47               4             7
      Denmark                  8       5.40               8             9
      UnitedKingdom           10       5.39              10            12
      Norway                  16       5.18              16            14
      Ireland                 29       4.77              29            29
      Iceland                 30       4.75              30            31

World Economic Forum (2011) The Global Competitiveness Report 2011-2012,
http://www3.weforum.org/docs/WEF_GCR_Report_2011-12.pdf
Entrepreneurial activity rates -Scotland, UK, Arc of
       Prosperity countries, 2000 to 2007

                               TEA index 2007 Average annual Scotland as %
                                                    TEA rate of average TEA
                                                                        rate
 Scotland                                 4.6            4.8
 United Kingdom                           5.5            5.9            81%


 Arc of Prosperity countries
 Finland                                 6.9             5.7            85%
 Denmark                                 5.4             5.8            83%
 Norway                                  6.5             8.0            60%
 Ireland                                 8.2             8.8            55%
 Iceland                                12.5            11.8            41%
 Sweden                                  4.2             4.4           110%
R&D investments by ICT Scoreboard firms per
 country of registered headquarters in the
      EU, in millions of € (2005-2008)
 ICT priority patent applications by EU Member
               State, 2000 and 2007
 ICT patent Applications    ICT Patent Applications          ICT Patent
                                /milllion inhab.      Applications/GDP (billion
                                                                euro)
          2007                       2007                       2007
DE                  7971   Finland              136   Finland          4.03
FR                  3030   DE                    97   DE               3.28
UK                  1809   Sweden                62   Sweden           1.69
Finland              723   AT                    52   FR               1.60
Sweden               571   FR                    49   AT               1.58
NL                   497   IE                    36   BG               1.35
AT                   430   NL                    30   SI               1.06
IT                   350   UK                    30   CZ               0.91
ES                   318   Denmark               29   EE               0.89

BE                   236 BE                       22 UK                0.88
Number of ICT and non-ICT patent applications
   per million inhabitants, by EU Member
                 State, 2007
       EU Member States’ innovation performance
Innovation leaders: Denmark, Finland, Germany, Sweden all show a performance well
above that of the EU27 average
Happiness and quality of life?
                    Happiness
Once again, Norwegians rank among the happiest
people in the world, behind only their fellow Nordic
neighbours in Denmark and Finland. The latest Gallup
World Poll indicates that the Nordic countries, with
their social welfare states and relative affluence, must
be doing something right.

Only the people of Iceland were missing when four out
of the five Nordic countries grabbed the top spots on
the Gallup World Poll’s list. Sweden ranked just after
Norway in a tie for fourth place .

Forbes Magazine, from OECD report
                    Place

In Norway, also considered by the United Nations
to be the world’s best place to live, fully 69
percent of the population were said to be thriving
while none of the respondents was “suffering.”
But 31 percent were considered to be “struggling,”
compared to 30 percent in Sweden, even though
the economy in Sweden is considered to be
weaker than Norway’s.
OECD Better Life Initiative. (2011)
 ‘Happiest countries in the world’
  [OECD plus economic stability]
10. Austria
9. Israel
8. Finland
7. Switzerland
6. Sweden
5. The Netherlands
4. Australia
3. Norway
2. Canada
1. Denmark
       Human Development Report 2011 - Sustainability and Equity: A
            Better Future for All Human Development Index




                           Developmen
                           t Index (HDI)




                                                                      Nonincome
                                                        capita rank
                                                        minus HDI
                                           (GNI) per
                                            National




                                                          GNI per
                                            Income
                               Human




                                             capita
                                             Gross




                                                           rank



                                                                         HDI
HDI
rank                                        (Constant
                           Value           2005 PPP$)                 Value
                           2011               2011        2011        2011


  1    Norway              0.943             47,557         6         0.975
  7    Ireland             0.908             29,322        19         0.959
 10 Sweden                 0.904             35,837         4         0.936
 14 Iceland                0.898             29,354        11         0.943
 16 Denmark                0.895             34,347         3         0.926
 22 Finland                0.882             32,438         0         0.911
 28 United Kingdom         0.863             33,296         -7        0.879
Resilient and robust?
     Legatum Prosperity Index (2011)

1             Norway

2             Denmark

5             Sweden

7             Finland

11            Ireland

12            Iceland

13            United Kingdom
    The Road to a Better Place?
• Can we join this group – that is move into
  the high income, high wealth,
  sustainable, low inequality, high
  opportunity, coherent economy and
  society?
Traffic problems: the Road
                   The Arc of Prosperity
                        becomes
• ‘the arc of insolvency’
• ‘the arc of darkness’
• ‘the arc of delusion’

“Only prudent Norway is holding its head above water”.

• Associated Press: “Iceland teeters on the brink of
bankruptcy”
• International Herald Tribune: “Iceland is all but officially
bankrupt”
• Forbes: “Iceland teeters on bankruptcy”
• New York Times: “Iceland, in financial collapse...”
              Financial crisis
• Surely small countries cannot cope ~ Nordic
  model(s) ‘not sustainable’
• Better together
  •       Protection
  •       Support
  •       Recovery
       Public Debt (% of GDP) 2010
         Country Ranks, By Rank
Rank        Country          Value
       10   Iceland          100.6

       22   United Kingdom    68.5
       27   Ireland           63.7
       29   Norway            60.2
       40   World             53.6
       53   Finland           46.6
       60   Sweden            43.2
       67   Denmark           38.1
List of countries by public debt
             (2011)
                          Public debt as %GDP

                 (CIA and Eurostat)             (IMF)
Sweden                        39.7               39.70
Denmark                       43.7               43.65
Finland                       48.3               48.39
Norway                        48.9               55.42
World                         59.3               79.25
United Kingdom                79.9               75.50
European Union                82.3               80.00
Ireland                       94.9               94.92
Iceland                      126.1               92.37
                   Banking crises
IMF Report:
During the past twenty years we have witnessed several major crises
throughout the financial world. The IMF study of banking crises
around the world reveals that 133 countries experienced significant
banking sector problems at some stage during the years 1980-1995.
The amount of public expenditure needed for resolving the crises and
reviving banking sector activity has been remarkable in all countries.
According to the above-mentioned IMF study, in some 25% of the
crises, the costs exceeded 10% of GNP. The figures from the Nordic
countries show that taxpayers' costs have ranged from 3% (Norway)
to 8% (Finland) of GNP. Considering that not only the government
budget but the whole economy suffers from such a crisis, it is
understandable that the countries around the world, together with
international organisations, have joined forces to determine the most
efficient ways to avoid systemic financial crises.
“The arc of prosperity become the arc of insolvency”

Sweden and Norway had banking crises in the early Nineties.
The Scandinavian banks collapsed after ... a credit and
property bubble in the 1980s that burst just like ours. The
Norwegian government moved quickly, driving down the
shares of the banks to zero, nationalising many and taking an
equity stake in the rest. It restructured and recapitalised the
banks and then sold them off, so that the Norwegian
taxpayers didn’t lose and the bankers didn’t get bailed out.

http://iainmacwhirter2.blogspot.com/2008/10/arc-of-
prosperity-become-arc-of.html
 Stopping a Financial Crisis, the Swedish Way
A banking system in crisis after the collapse of a housing
bubble. An economy hemorrhaging jobs. A market-oriented
government struggling to stem the panic. . banking system
was, for all practical purposes, insolvent. … [but 3 years later,
Sweden back on track]

But the final cost to Sweden ended up being less than 2
percent of its G.D.P. Some officials say they believe it was
closer to zero, [with more returns to come].

However, the reforms enacted during the 1990s seem to
have created a model in which extensive welfare benefits
can be maintained in a global economy.

NY Times
A better fiscal way?
  GDP, government deficit/surplus and debt in the        2007      2008      2009      2010
           EU (in national currencies)
Denmark
       Government deficit (-) / surplus (+) (% of GDP)       4.8       3.2      -2.7      -2.6
Government expenditure                      (% of GDP)      50.8      51.9      58.4      58.5
Government revenue                          (% of GDP)      55.6      55.2      55.6      55.7
                       Government debt (% of GDP)           27.5      34.5      41.8      43.7
Ireland
       Government deficit (-) / surplus (+) (% of GDP)       0.1      -7.3     -14.2     -31.3
Government expenditure                      (% of GDP)      36.6      42.8      48.9      66.8
Government revenue                          (% of GDP)      36.7      35.5      34.7      35.5
                       Government debt (% of GDP)           24.9      44.3      65.2      94.9
Finland
       Government deficit (-) / surplus (+) (% of GDP)       5.3       4.3      -2.5      -2.5
Government expenditure                      (% of GDP)      47.4      49.3      55.9      55.3
Government revenue                          (% of GDP)      52.7      53.6      53.2      52.5
                       Government debt (% of GDP)           35.2      33.9      43.3      48.3
Sweden
       Government deficit (-) / surplus (+) (% of GDP)       3.6       2.2      -0.7       0.2
Government expenditure                      (% of GDP)      51.0      51.7      55.0      52.9
Government revenue                          (% of GDP)      54.5      53.9      54.1      52.8
                       Government debt (% of GDP)           40.2      38.8      42.7      39.7
United Kingdom*
       Government deficit (-) / surplus (+) (% of GDP)      -2.7      -5.0     -11.5     -10.3
Government expenditure                      (% of GDP)      43.9      47.9      51.4      50.4
Government revenue                          (% of GDP)      41.1      42.9      40.1      40.3
                       Government debt (% of GDP)           44.4      54.8      69.6      79.9
      Fiscal Stability and Responsibility
 Government Expenditure and Revenue as   2007          2010

               % of GDP
DENMARK
Government expenditure                          50.8          58.5

Government revenue                              55.6          55.7

IRELAND
Government expenditure                          36.6          66.8

Government revenue                              36.7          35.5

FINLAND
Government expenditure                          47.4          55.3

Government revenue                              52.7          52.5

SWEDEN
Government expenditure                          51.0          52.9

Government revenue                              54.5          52.8

UNITED KINGDOM
Government expenditure                          43.9          50.4

Government revenue                              41.1          40.3
Personal taxation
Advanced European Countries: Main Macroeconomic Indicators, 2009–12 (Percent) IMF
Total tax revenue as percentage of GDP, 2009, ranked
                 by tax to GDP ratios
Summary
        View from Wall Street
The happiest countries seem to be places
where there is a good balance of work and
leisure time. Not all nations can afford to keep
unemployment low through government
subsidies. Not all countries can afford to
provide universal medical coverage. Not all
countries can afford to educate almost all of
their children, which in turn supports extremely
high literacy rates and builds a population of
skilled workers.

24/7 Wall St
       Together or not:

The prime minister said: “there are
countries in Europe, small countries
that make it on their own, but ...
we are better off X
we are stronger X
we're fairer       X
we're richer       X
           Impacts of poverty
• poor in a rich country intensely stressful
• made worse by stigmatisation both in the
  media and as result of political rhetoric.
• Pressures to consume stem from a culture
  that elevates passions and image above
  relationships, community contribution, and
  care for others and the environment
• There must be a better way
          Routes out of poverty
• Possible to overcome poverty, 6th richest =>
  adequate resources. Need allocation in more
  effective and sustainable way.
• Greater role for businesses: paying taxes, ↑
  employment of those further from the labour
  market, offering decent jobs in sustainable
  industries.
• Higher expectation on businesses to deliver
  social sustainability, particularly in return for
  the array of state support that businesses
  receive.
   Social protection and equality
• social protection measures (education, NMW
  and social safety nets) strong mechanisms to
  increase equality.
• they are a collective good - all depend on and
  all benefit, cf. financial drain.
• funded fairly by progressive taxation.
• Collective ownership, management =>
  genuine participation in all economic activity
  – sharing ownership, work, and rewards
    Can we move from poverty -
            prosperity
• new prosperity, a shared future where we are
  simply better at sharing, where there are
  fewer extremes of money and wealth, esteem
  and status, power and position.
• community-led economy focused on quality
  and distribution of growth, where the assets
  of communities and the value of individuals
  are utilised and enhanced to promote social
  and environmental sustainability.
            Size matters


Iceland's Finance Minister Steingrimur
Sigfusson has told the BBC that his
country's size has been crucial in the
move towards recovery: "You are quicker
turning a small boat around than a big
ship."

								
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