Friday, July 2, 2010

Beyond GDP

Saudara SatD has posted an interesting article from Dr Mohd Mahyudi Mohd Yusop on the limitations of a GDP-centred development paradigm:

Wake up Malaysia, it’s time to play the ‘beyond GDP’ game!

The bulk of the discussions surrounding the recent announcements on the government’s economic strategies, particularly the Tenth Malaysia Plan (10MP) and the New Economic Model, have been centred on the issue of a high-income economy. To the discerning few, this situation raises a pertinent concern on whether or not a high income is necessarily good for the wellbeing of all Malaysians in the spirit of 1 Malaysia.

Indeed, this is a valid reaction given that; as rightly pointed out by many segments of the society who have commented on those official announcements, the actual thrust for those plans is the rakyat’s or people’s quality of life…

…Therefore; the critical question to the general public is; don’t we want to be free from this unintended spell, for our own and our future generation’s sake? …

…Among the developed nations, Canada; which is a G7 and G20 member country, seems to be leading the pack by the official commencement of the initiative referred as the Canadian Index of Wellbeing (CIW) that garners the expertise of Canadian government agencies, non-governmental organisations and universities. To these direct contributing parties, good living standards, robust health, a sustainable environment, vital communities, an educated populace, balanced time use, high levels of democratic participation, and access to and participation in leisure and culture is what quality of life is all about…

…Not surprisingly, the interest on this “new game” has gone across the Atlantic Ocean. The European Commission, European Parliament, Club of Rome, OECD and WWF jointly organised the inaugural “Beyond GDP” Conference in November 2007. Its single most important objective was to settle the issue of which indices are most appropriate to measure progress so that they could best be integrated into Europe-wide public debate and decision-making process…

…In final analysis, the real catch-up game that our policymakers should be concentrating on is: how well we are doing on a more proper wellbeing or quality of life scale rather than the no longer trusted pseudo-measure, GDP. Yes, their preoccupation with the “old game” would certainly lead us to be superficially happier enjoying the endless array of products and services that the market can perpetually offer…

…Therefore, it is an opportune time for our country to be smart, proactive; hence, committed to this new game. The confidence and optimism to succeed is always high for the majority of Malaysians proudly believe that our beloved country does have the right resources, talents and spirit to be a strong contender, if not the winner, in this “Beyond GDP” game.

Only then, the rakyat would be genuinely appreciative towards the various efforts undertaken by the democratically-elected government to improve their quality of life.

Click the link to read the whole thing.

Quite coincidentally, I got the 7th Issue of the Global Progress Newsletter in my inbox last night (warning: pdf link), which covers much the same ground but in considerably more detail, including implementation in certain regions. You might want to read past issues of the newsletter here.

What’s my take on this? I think the article is spot on – but probably premature. Why I say so is because until basic economic necessities are met, there will be little social pressure to move away from a income-centric notion of economic well-being. It’s no accident that the countries most involved in this new effort are advanced economies with already high levels of income.

You won’t much care about quality of life issues until you have a roof over your head, food on the table, clothes to wear, and some assurance that things will stay that way for the near future. Going beyond income-based measures requires a certain degree of excess income in the first place, where people start to value leisure time, the environment, safety and culture for example, more than they value a greater gain in income.

Things are changing here in Malaysia towards engaging with more quality of life issues (particularly in urban areas), but with 40% of the population in relative “poverty”, it will be some time yet before we get to a majority consensus on this issue.


  1. Saudara hishamh.....woo y so formal beb

    yes agree still premature, but parameters of sustainable development should be put in place beyond the current targets.

    Executing entities must have some form of control parameters beyond economic targets which can be easily monitored. No point having some abstract qualitative targets with no ability to measure & track its performance.

  2. Premature...

    And who came up with the concept of GDP itself - Simon Kuznet - an economist from an high income, advanced country...