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Written on 14 Jul 2021

Building post-Covid recovery around wealth rather than GDP

At a High-level Political Forum on Sustainable Development side event, panellists introduced examples of expanded wealth measures and demonstrated the ways in which they can be used to prioritise post-Covid recovery investments and better capture progress towards achievement of the SDGs.

The International Institute of Sustainable Development (IISD) organized a UN High Level Political Forum on “Building Post-COVID Recovery Around Wealth rather than GDP,” on 12 July 2021.

The panellists included the Bennett Institute's Matthew Agarwala, Pushpam Kumar, UNEP, Rob Smith, IISD, and Alin Halimatussadiah, Universitas Indonesia, and Chair, Dominique Charron, IDRC.

During the discussion, Matthew Agarwala stressed that social capital “impacts and pervades everything we do” and is so central to everyday life and economic performance that most people and governments don’t even think about it, but it would be seriously noticed when it’s gone.

Underlining social capital’s relationship to key economic outcomes, he pointed to savings in defensive expenditures, reduced transaction costs, and enhanced cooperation: "Social capital is an irreplaceable asset for overcoming society’s problems whether it's climate change, air quality, inequality, racism, or sexism. When governments fail to invest in social capital – trust, community cohesion, and community infrastructure – other actors might step in. We’ve seen this during the pandemic, with drug gangs in Brazil, mafiosos in Italy, and the Yakuza in Japan."

He stressed that though social capital measures are imperfect, they can, nevertheless, be used to build conclusions about how we organize our economy.

Agarwala concluded: "Social capital will determine our collective capacity to deliver the UN Sustainable Development Goals."

Read a summary of the event.

Related blog: In a pandemic, your real wealth is other people