Sarwono calls for new ways of measuring GDP

JAKARTA (JP): State Minister of Environment Sarwono Kusumaatmadja called on economists yesterday to come up with new ways of measuring the national income, taking into account both natural resource depletion and environmental degradation.

Sarwono said the widely used gross domestic product (GDP) as an economic indicator fails to incorporate these two factors, both of which he said are crucial for sustainable development.

"The coverage of the sustainable development process should consider the decrease of natural resources and the environment's degradation," he said in his speech at a seminar yesterday.

A new method which can relate national income calculations to the decrease of natural resources and environmental degradation should be found, he said.

By doing this the country could identify the condition and the potency of its natural resources and introduce economic policies that support sustainable development, he said.

Also present at the seminar, titled Integrated Environmental and Economic Accounting, was head of Central Bureau of Statistics Sugito. And among the speakers at yesterday's seminar, which will conclude on Thursday, were the World Bank's representative Michael Ward and the United Nations Statistical Division's representative Peter Bartelmus.

Surna T. Djajadiningrat, Sarwono's third assistant for coordination, said there is now a growing public recognition of the negative impact of economic development on natural resources and the environment.

Although more and more people have come to appreciate the costs exacted on natural resources, economic development policies have continued to neglect them, he said.

Many natural disasters had their origins in the neglect of the environmental ecological balance, he said. As an example Surna cited the arbitrary logging of forests which causes land erosion.

Surna said these are costs that have to be borne by the country, and these costs are growing all the time.

"But the expenses spent in preventing environmental degradation and in restoring its condition are not included in calculating the national income," he said.

He admitted that some countries would object to the inclusion of environmental factors in the GDP calculations because it would mean accepting lower national income figures.

In his presentation however, Sugito cautioned participants not to rush in search of new ways to calculate the national income.

"We are still in the process of finding the best system to include environment factors in measuring the national income," Sugito said.

Currently, the State Minister of Environment's office and the Central Bureau of Statistics are drafting natural resources accountancy guidelines. Among commodities which have already been covered are tropical forest products, oil, gas and coal. (31)