GDP obsession: Why we need to rethink what 'development' really means

By Ali Azmi

It often feels like we don’t question the word ‘development’ enough.

To be precise, we don’t vigorously examine the obsession with gross domestic product (GDP) that governments across the world (including Malaysia) sanctify as the basic measure of development.

To ‘develop’ literally means to grow or to expand, indicating some kind of progress, presumably to something better. Yet, the word better is a subjective ideal. Its fluid meaning dictates how we understand the word development.

Take the way we speak about an individual person’s development. Anecdotally at least, I’ve yet to find parents who teach their children to be single-minded in a never-ending quest for money. Understandably, concerns about how children will make ends meet feature strongly in any parent’s concern – but is that it?

When we examine a child’s development, we often consider multiple factors. This is clear from the values we want to inculcate in them, whether they be religious values, patriotic values, kindness or generosity.

So, when we say that a child is “developing well” what do we mean? Do we mean they get along well with their peers? That they’re showing signs of academic excellence? That they have a vivid and creative imagination? That they have a good temperament?

It can easily be a combination of all of this and more. I believe this explains why we tend to criticise parents who put overwhelming emphasis on things like their child’s report card beyond all else.

Development seems to intuitively be something holistic when we think about it at the individual level.

My question then is quite simple: why must development at the national or global level be so one-dimensional when lived experience tells us development is a rich and multidimensional concept?

We claim that GDP is meant to be a means toward other ends (for example, better living standards), but when there is GDP growth, don’t we celebrate that as if the job is already done?

Let’s not forget that Simon Kuznets, the economist behind GDP, himself said that “the welfare of a nation can scarcely be inferred from a measurement of national income”.

The emphasis we’ve given to GDP has sidelined everything that lies outside the market. Let’s look at a few examples.

Classical economics would account for heavily polluting endeavours as a net positive for growth, and simply consider pollution as a negative externality.

Externality? How can the intrinsically negative effect of a polluting activity be considered external? Are more palm oil plantations really a net positive if they destroy rivers downstream and degrade local ecosystems?

GDP is also indifferent to issues of material inequality. Its focus on aggregate production means a handful of millionaires (or nowadays billionaires) lumped together with the majority struggling masses still looks good in the books.I’m thinking of what the gleaming 118-storey Merdeka 118 skyscraper, the second tallest building and structure in the world, could possibly do to uplift those in the bottom 40% and middle 40% income groups.

Unpaid labour such as care work, parenting and volunteering are all assigned a zero value. Yet, it is these activities that play a fundamental role in a nation’s welfare. Why does it only contribute to the GDP’s value when a child is sent to a nursery?

We hear about the sustainable development goals constantly, and every now and again a whisper of alternative development metrics like the Human Development Index, Happy Planet Index or Gross National Happiness (GNH). Yet aren’t our discussions still anchored in GDP-centric thinking?

Allow me to focus briefly on GNH – the central development philosophy of Bhutan. In opposition to a development model that revolves around GDP, GNH comprises four key pillars:

Notice how economic development plays only a part in the Bhutanese conception of development. They’ve instead begun by asking what makes a flourishing life and then worked their way up from there. They recognise the significant value of the non-material and spiritual dimensions that make up a meaningful life.

Making the qualitative nature of GNH work is indeed less straightforward than the purely quantitative GDP. But let’s have a look at some of the nine domains that it measures:

Psychological wellbeing: life satisfaction, absence of negative emotions

Time use: the balance between the time spent on work, sleep and leisure

Community vitality: volunteering, safety, the strength of social relationships

Environment: urban environmental quality, responsibility towards nature, etc.

Under the GNH model, there is considerable weight given not just to material development, but to non-material development, too. A more balanced approach such as this acknowledges that human flourishing, whether at a national or personal level, cannot be measured by economics alone.

As noted by many before me, GDP has already proven to be a failed measure of development. We cannot let ourselves be mentally restricted to a framework that allows the burnt-out worker, the eroded community and the degraded environment to exist as value-neutral items in a spreadsheet that does not care about the wellbeing of people and the planet.

Providing for the family means nothing if you have no time for them. Increased vehicle sales mean nothing to our wellbeing if they only worsen our already terrible traffic!

Alternatives such as GNH do not reject economic prosperity but put it in its proper place: as only one part of the larger development picture. I’m not claiming that GNH is a perfect and readily exportable model – I don’t believe there is such a thing. But it acknowledges the truth that prosperity lies in balance. Isn’t this something we already live by in our personal lives?

Ali Azmi, an Aliran member based in Penang, is a research associate who focuses on finding better ways to support communities and improve their quality of life. His work explores new ideas for sustainable and inclusive development, challenging traditional economic models and putting people’s needs and aspirations first.