Economic Development:Economic Development:A Journalist’s Perspective A Journalist’s Perspective

Prof. Lou UreneckBoston Universitylureneck@bu.edu

Private (organic) development;Private (organic) development; government-sponsored development government-sponsored development

The combination of laws, policies and practices that

contribute to economic growth and a higher standard of living.

What is it our readers and viewers What is it our readers and viewers need and want to know? need and want to know?

TaxesOpportunity (jobs)Quality of life

We ask the questions that they cannotWe ask the questions that they cannot--We stand in for our readers --We stand in for our readers

Who benefits? Why this project or initiative and not another?

Other questions tooOther questions too

What is the investment, what is the return?What are the sources of capital?Why this project or initiative and not another?

And more generallyAnd more generally

What are the obstacles to private development – Ukraine and Belarus?

Development metrics, termsDevelopment metrics, terms

•Gross Domestic Product (GDP)•GDP/ population – per capita GDP•Median national income•Rates of employment•Sources of capital

•Foreign investment•National savings

•Return on investment – ROI

Gross Domestic ProductGross Domestic Product

The value of all goods and services produced in the economy for a period of time. The principal measure of an economy’s size.

Ukraine $327 billion* (rank in world: 39) Belarus $140.9 billion (rank in world: 131)

Per capita GDP Ukraine $7,200 (rank in world: 131)Belarus $14,900 (rank in world: 85)

*PPP Source: CIA Factbook

The problem with GDPThe problem with GDP

It measures the out put of factories and farms but it also counts (as a positive) the cost of hospital admissions, earthquakes and fees for legal disputes. It does not subtract the external costs of pollution, nor does it count the value of work at home – cooking and childcare. It emphasizes “GROWTH” regardless of its consequences.

GDPGDP

“Distinctions must be kept in mind between quantity and quality of growth, between its costs and return, and between the short and the long run.” -- Kuznets

Deep thinking Deep thinking about economic developmentabout economic development

Amartya Sen,Jeffrey Sachs

Amartya SenAmartya Sen

With Mahbub ul Haq, he originates the Human Development Index, which includes:

Life expectancyEducationStandard of living (GNI)

Remember the question, “Who benefits?”

Jeffrey SachsJeffrey Sachs

The obstacles to trade and development:

•Corruption•Legal and social disparities•Disease •Lack of infrastructure•Unstable politics•Poor infrastructure•Protectionism•Geographical limitations

What are some of the obstacles to What are some of the obstacles to business formation?business formation?

•Receiving permits•Registering Property•Getting Credit•Protecting investors•Tax policy•Ease of trade across borders

Evaluating a government-sponsored Evaluating a government-sponsored project or initiativeproject or initiative

Return on investment:What are the costs?What are the returns?

EURO 2012 US example: Giants Stadium,1972- 2010, $301M,$110M remains

Returning to the concept Returning to the concept of comparative advantageof comparative advantage

What would seem to be the natural targets of investment for Ukraine and Belarus, based on the comparative strengths?

In Ukraine, agriculture: investments in logistics, or getting goods to market.

The Journalist’s RoleThe Journalist’s Role

Putting forward a context for understanding economic development from the perspectives of our audiences …

In general, the benefits of reforms …

And specifically, the facts of particular projects and especially return on investment.

Our agenda: We are objective the interests of our readers.

Development narrativeDevelopment narrative

In both Ukraine and Belarus, there are core issues of economic development.

In Belarus, the pace of privatization, loosening of central control of the economy and development of external trade.

In Ukraine, the difficulties of doing business in the country: tax policy, low-level corruption and high-level cronyism.

In both countries, the sources and cost of energy.

Journalism as a tool for reform Journalism as a tool for reform

The narratives you tell create a way of explaining the issues, and making events or issues that at first seem disconnected or complex understandable to your readers and viewers.

These subjects require repetition: only through consistent and constant explanation of the issues can the media, through journalism, move the public toward understanding and the government toward action.