Page 27 - Special Topic Session (STS) - Volume 2

STS452 Joerg B.
The Primary Diversity Measure (PDM) was applied by Al-Kawaz (2008) for
Kuwait in 2000 and by Beutel (2019) for Kuwait and Saudi Arabia during 1995-
2011.

4. Sustainable Development of ASEAN Countries
Sustainable development of nations involves economic, social and
environmental changes. Within this process, diversification and structural
change of production and demand are closely related to many areas of the
economy and society. For income per capita to converge, countries must move
towards more diversified, more complex production structures with more
technology and knowledge. The long-term strategy for countries is to increase
the gross national income per capita and to transform the non-renewable
natural capital into other forms of capital like machinery, buildings and human
capital.
Since a long time, the World Bank is engaged in measuring sustainable
development of nations. The long-term strategy of countries should be to
increase the gross national income per capita and transform the non-
renewable natural capital into other forms of capital like machinery, buildings,
and human capital (Beutel, 2013).
In the World Bank’s World Development Indicators we find two prominent
indicators for sustainable economic development: ‘Adjusted net national
income’ and ‘Adjusted net savings’.
‘Adjusted net national income’ is estimated by subtracting from gross
national income the consumption of fixed capital and depletion of natural
resources. The consumption of fixed capital reflects the decline in man-made
physical capital through retirement of buildings, machinery, transport
equipment, and the like; while the depletion of natural resources measures the
decline in non-renewable natural resources through extraction.
Gross domestic product (GDP)
+ Net income from abroad
= Gross national income (GNI)
- Consumption of fixed capital
= Net national income
- Natural resources depletion
= Adjusted net national income
The consumption of fixed capital is estimated as part of the national
accounts. On the depletion of natural resources, the World Bank provides
valuable information for 10 minerals, 4 energy sources, and net forest
depletion.
‘Adjusted net savings’ is a national accounting aggregate designed to
measure changes in assets including natural and human capital. The gross
stock of natural capital (natural resources), physical capital (buildings,

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