Environmental sustainability deteriorating in emerging market countries


Standard Chartered Bank recently launched a Development Index, which will measure change in the various development indicators in countries. Environmental sustainability is one of the index’s core indicators.

“The Human Development Index was one of the first indices of this type, and even that is now beginning to look a progress over time, but of course it doesn’t include the environmental factor,” Standard Chartered Bank head of macroeconomic research John Calverley told CNBC Africa on Thursday.

“So we looked at an index called Ecosystem Vitality, which comes from Yale University, and we added that in to our overall scores to get an idea of whether countries are really pursuing sustainable development or not. What we found is a number of most emerging markets actually are seeing deterioration in that element, even while they’re growing in other areas.”


The index, which was launched on Wednesday, will measure the change in various development indicators from 2000 to 2012 using GDP per capita, years of education, life expectancy, environmental health and ecosystem vitality.

Calverley added that it would be an indicator of progress over a period of time rather than a static ranking at any given point.

“We do look at GDP in static terms, we compare countries in terms of GDP per capita, but we also spend a lot of time talking about growth in GDP. If you’re talking about development, what you really want is to see improvement. You want to see progress in development, so just looking at the static indicator is not really enough,” he explained.

“What is clear now is that there’s more and more data coming out in the areas of education, health, the environment, and so we can look at it as a time in a way that really wasn’t possible just a few years ago.”

While it is possible for emerging countries to grow faster than developed countries in terms of GDP, it’s also easier, provided that policies are in place to make quicker progress in other areas such as improving education and life expectancy.

“In our index, Ghana and Uganda, for example, come top out of 31 countries. That includes countries in Asia and developed countries as well. Some of the African countries are doing extremely well, and that’s really coming from improving life expectancy and spending more money on education in particular.”

Emerging markets are however performing poorly in terms of environmental sustainability, as pollution and habitat loss has become an increasing problem despite their positive performance in GDP and health.

“This is part of a big effort by a lot of international organisations, government organisations around the world to try to get a better handle on what we mean by development. There isn’t just GDP, it’s other things as well and how can we measure that. We have to take into account the environment, which we haven’t done enough of until recently,” said Calverley.