Development beyond GDP

One single number does not capture the whole economy. Indeed, it overlooks crucial aspects

Dr Sanjeev Kenchaigol | October 9, 2018


#Public Affairs Index   #growth   #GDP   #economy  
Development beyond GDP
Development beyond GDP

In an illuminating chapter introducing Public Affairs Index (PAI) 2018 is the narrative on how the core ideas of human welfare – amidst the sole focus  of governments on GDP numbers – is driving new development thinking among the current generation of policymakers. Today, it is evident that significant numbers of the population in India continue to face poverty and hence poor entitlements and access to basic human development necessities – health, education, and sustainable livelihoods. This is against the larger backdrop sustainable development itself being endangered by environmental abuse and ecological degradation.
 
To understand exclusion and the objective conditions of the population to whom the fruits of development have not yet trickled down, PAI 2018 provides insights on the existing gaps in governance. PAI 2018 also has a special focus on the children of India, a dimension of development that assumes significance in the development discourse, yet gets relegated as of research interest only to a handful of NGOs and eventually ends as well-intentioned efforts of policymakers. Herein lie the virtue and ethic of the PAI series that strives to make all the stakeholders, including governments, recognise where the ordinary citizens stand in the mainstream development processes and the need for the state to be held to account.  
 
Growth vs development 
In a recent review of the book The World after GDP, Amiya Kumar Bagchi, the veteran economist, illustrates a story of Nauru, a tiny island state in Micronesia, which its discoverer Captain John Fern described as a ‘pleasant Island’. Things began to change after the World War II, when it was found that the island contained a large reservoir of one of the purest grades of the phosphate in the world. Its exploitation catapulted Nauru to the status of nation with one of the highest per capita incomes in the world. However, in its hurry to ‘develop’, its government overexploited the mines and ended up destroying the local flora and fauna. In its scramble to protect its income, Nauru turned itself into a tax haven and a money-laundering centre. 
 
“…With no visible economic opportunities, broken infrastructure, ecological mayhem and a dishevelled education system, mass immigration is the only long-term option for Naurians, most of whom have sought better economic opportunities in New Zealand and Australia…”
 
The idea of GDP as a mono measure of success had caught the imagination of most capitalist and growth-centred countries around the world in the 1930s and 1940s, when economists and policymakers were profoundly influenced by John Maynard Keynes and his macroeconomic policies that centred purely on monetary policies and national income accounts. After World War II, the GDP famously became the core index of national economic strengths not only in the US and the UK but also in the developing countries. India with its Nehruvian socialist ideology of nation-building and later adopting the free market economy is herself not free from the GDP obsession despite glaring inequalities and poverty. Policymakers are proud in claiming the achievement of attaining 7-8% of GDP growth, ignoring social inequalities. 
 
Perspectives in the post-GDP world
GDP as a self-centred measure does not include human development aspects and ignores rational questions on why widespread social inequalities persist. Why certain groups treat women differentially? How human happiness never figures in the measures of a nation’s successes? Or why millions of people die defending their motherland or in a revolution that asks for individual freedoms or rights? To quote Bagchi again, 
 
“The GDP man only exists so far as he works and spends. He dislikes pure leisure unless it is priced and commercialised. For the GDP man time spent in the family or in the local community is wasted because it does not count for development and growth…”
 
Successive governments and policymakers in the country have not overcome their fascination with GDP numbers. For instance, as a country we spend the lowest percentage of the GDP on basic healthcare, as low as 1.4%, and ironically this vital human freedom has not yet gained the status of a basic human right. In addition, severe violations of human rights, for instance the unconscionable violence against women and girls manifested by the increasing instances of rapes, gross violations of child rights, caste and religion based discrimination, and increasing intolerance among the communities – not to mention the environmental abuse being done in the name of economic development – point to a frightening dystopian future.
 
The ‘post-GDP world’ has recognised the gaps and found ways to resolve the burgeoning development problems that mankind is suffering today. But this apathy rests equally with the people who govern and the people who are governed. Moving forward, it is necessary that awakened citizens, development thinkers, public and private stakeholders, NGOs and private entities, constitute the mainstream and equally share the responsibility and the sense of solidarity towards an equitable and just order.

Dr Kenchaigol is a programme officer with the Public Affairs Centre, a not-for-profit think-tank committed to good governance. 

(The article appears in October 15, 2018 edition)
 

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