peter
Business Reporter
THE United Nations Conference on Trade and Development (UNCTAD) has unveiled a new tool to measure countries’ capacity to achieve social and economic transformation.
The “Productive Capacities Index (PCI)” is also expected to help countries track their ability to achieve the United Nations Sustainable Development Goals (SDGs).
The PCI also identifies key areas that developing countries could focus on to boost their productive capacities and achieve long-term, sustainable and inclusive growth.
In its Monday update UNCTAD urged policy makers in developing economies to use the tool to make evidence-based decisions about appropriate policies and strategies.
“The PCI is a practical guide and diagnostic tool to inform trade and development policy choices at the national level,” said Paul Akiwumi, director of UNCTAD’s division for Africa and least developed countries.
He said sectoral or thematic priorities for building productive capacities should be determined by each country’s national development strategy and country-specific conditions.
“There is no universal blueprint to foster the development of productive capacities and structural economic transformation.
“Policies should be home-grown and based on country-specific constraints, opportunities and comparative advantages.”
The PCI is an online portal with publications, manuals, resources and tools that allow policy makers to measure their countries’ performance in achieving their national development goals, as well as their ability to meet the SDGs.
“As countries fight the coronavirus crisis, their need to build economy-wide productive capacities for inclusive and sustainable growth is greater than ever,” said UNCTAD secretary-general Mukhisa Kituyi while launching the tool.
Productive capacities in this case refer to the productive resources, entrepreneurial capabilities and production linkages that together determine the capacity of a country to produce goods and services and enable it to grow and develop, said UNCTAD.
These help countries avoid the trap of focusing on a few ingredients of production such as machinery and equipment, physical infrastructure, human resource development and technological capabilities as ‘magic bullets’ for economic growth and poverty reduction.
They equip countries to foster structural economic transformation, which, in turn, helps reduce poverty and accelerates progress towards achieving the SDGs, said the UN agency.
The model draws attention to the strengths and weaknesses of countries’ past policies, processes and actions. It suggests a roadmap for future policy actions and interventions under each component.
“The tool provides an overview of how far productive capacities have been developed or not in each country, enabling policy makers to trace their development performance over time, as well as compare it with other countries,” said UNCTAD.
“The index scores a country’s performance on productive capacities on a scale of 1 to 100, assessing the effectiveness of policies and strategies as well as existing gaps and limitations.
“It can help governments formulate and implement their policies better and benchmark their achievements.”
In line with the model, a country’s overall level of productive capacities, as well as performance across the eight components of the PCI, are markers of its strengths, weaknesses and possible future growth patterns.
Africa’s leading performers are Mauritius, ranked 46th in the world, followed by South Africa (74th) and Tunisia (85th).
UNCTAD has said that many developing countries, particularly the world’s poorest nations and landlocked ones, lag in all components of the PCI, except natural capital, largely due to their over dependence on the export of primary commodities and limited production in a few sectors.
“There are notable gaps in key aspects of productive capacities, including structural change, institutions, energy, ICT and human capital,” it said.
Online Reporter