Gross Domestic Product Not Sole Indicator of Progress

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ImageWhat is Happiness? Many of us equate it with money. However, since 1972, the kingdom of Bhutan under the leadership of its former King, Jigme Singye Wangchuck has measured its developmental success not solely through the economic lens of Gross Domestic Product (GDP) but also through a more complete approach known as Gross National Happiness (GNH). Its laurels were based upon the original four pillars of sustainable development, preservation and promotion of cultural values, conservation of the natural environment, and good governance.

These indicators have become increasingly important over the last three decades as it became apparent that blindly pursuing economic expansion has created growing pains in a number of countries. GNH has appeared to be very successful in Bhutan, a nation the size of Switzerland with a population of around 700,000. With initiatives such as maintaining at least 60% (currently 72%) of the land for forests and conservation, while maintaining 165 indigenous mammal species such as the rare snow leopard, Bhutan also has a fast growing economy.

Government spending on health and education is the highest in the region at 18% and Bhutan boasts a GDP growth rate of 21.4% and a per capita income level that is almost twice as much as much as India’s, although it was much poorer as recently as the 1980’s. Independent sources also seem to echo these sentiments as Business Week magazine rated Bhutan the world’s 8th happiest country.

ImageWhen I think about it, it makes sense. Do we need all the stuff we buy? Out of all the things that we spend money on, what truly gives us pleasure and makes us happy? Could we be consuming goods and products purely out of habit, driven by a culture of consumerism? In economics class, we learned about utility along with diminishing marginal utility, and it seems to make sense on a national scale as well. Beyond a certain level, incomes and happiness do not directly correlate. More is not always better.

A number of famous economists and the French President Nicolas Sarkozy have taken notice and propose incorporating indicators such as happiness, long holidays, and a sense of well being into measures of economic performance.

Bhutan’s example demonstrates that cultural identity, environmental protection, and sustainable development do not have to be sacrificed in the blind pursuit of economic growth. We should take a more holistic view on development.

What do you think? 


Joe Qian

External Affairs Officer

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