Beyond a country's GDP

By Dr. Irwan Shah Zainal Abidin via New Straits Times


IN today’s world, the measurement of development in the form of gross domestic product (GDP) is no longer sufficient to capture or represent the quality of life or the standard of living of individuals, societies or nations. This is where the discipline of economics must evolve and policymakers must take heed. The high incidences of wealth and income inequality all over the world, and other non-economic issues, such as the environment and the wellbeing of the people, have made GDP inadequate to measure the social advancement of humanity.

The need to look beyond GDP is more apparent in high-income developed countries compared with the developing Third World nations. For Malaysia, it is natural that, as we are approaching high-income advanced nation status in just a few years, the call for the government to look beyond GDP to measure social progression is louder than ever.

An article, titled “Malaysia in 2050: Old, Poor, Sick and Without Children”, published in a financial daily recently, highlighted crucial trends and patterns, such as the ageing population, mental illness and overall health conditions of Malaysians, are problems that the GDP alone cannot capture. Hence, the inevitable call to focus on growth that is inclusive.

The article is a useful pointer in terms of the direction of where government policy should be headed in the near future. Fortunately, this is also the current main goal of the public policy focus in Malaysia. Under the National Transformation Policy (NTP), the government is now gearing up towards an inclusive and sustainable growth, as clearly seen under the 11th Malaysia Plan (11MP), as a final five-year blueprint towards Vision 2020. Malaysia’s economic planning is also being concentrated on three crucial elements — capital economy, people economy and public happiness.

We have to accept that growth alone is not enough; we need to strive for quality growth. And, more fundamentally, a paradigm shift in thinking is needed. For this, the time is ripe to view the notion of economic development as human development. What this implies is that, when we talk about growth, the story is not merely about production and income per se, but above all, to put people’s well-being and happiness at the core of the narrative. As GDP is meant for the measurement of aggregate output, measurement for well-being and happiness must also be put in place so that it can be evaluated and improved from time to time. We have our own well-being index, but to measure and understand subjective well-being and happiness, we need a measurement that is universal and comparable to other countries as well. Towards this end, perhaps the World Happiness Report, published by the United Nations, can be the starting point.

The World Happiness Report 2017, the fifth report since the first was published in 2012, analyses the levels, changes and determinants of happiness among and within nations. It places greater attention on social foundations of happiness for both individuals and nations based on six crucial variables — GDP per capita, healthy years of life expectancy, social support, trust (as measured by a perceived absence of corruption in government and business), freedom and generosity. Of the 155 countries evaluated, this year’s ranking shows Malaysia standing at 42nd place, an improvement of five places from last year’s 47.

Malaysia is, in fact, the fourth happiest country in Asia. The point here is that, while Malaysia is heading in the right direction now, we do not want that by 2050, the dystopian scenario projected in the article to become a reality. Hence, efforts need to be doubled from now. For specific measures, perhaps the Fit Malaysia programme can be expanded to not just being a springboard for Malaysia to become a true sporting nation, but also issues of
well-being and happiness of Malaysians.

Perhaps the definition of “fit” could be expanded not just to include physically, but also mentally, psychologically and spiritually. Even in sports, we know that being physically fit is not enough; equally important is the psychological dimension of fitness among our sportsmen.

The other aspect that relates to happiness is arts and culture. In the World Happiness Report, one of the main classes in measuring happiness is eudaimonia, that is, a sense of meaning and purpose in life. I believe that to have a sense of meaning and purpose in life, arts and culture play a crucial role. Maybe besides building skyscrapers, it is time for Malaysia to build a cultural centre, especially in the area of greater Kuala Lumpur or in Bandar Malaysia.

Understanding and being proud of our arts, culture and history will give us a sense of belonging and will eventually foster eudaimonia and happiness in us. Commenting on the 2017 World Happiness Report, Prime Minister Datuk Seri Najib Razak said in his blog: “It’s useless if we have high incomes but are not happy.”


Grant Hall