Look beyond GDP numbers to understand people’s wellbeing
The economic indicators such as GDP growth are important to assess the economic advancement of a nation. But economists and policymakers should come out of the obsession of using gross domestic product numbers and focus on the figures that people can see and relate to their lives, said two noted economists.
“Economic development means an improvement in the standards of living and it is a matter of feeling. This is something that can be visible and is not a matter of calculation on papers only,” economist Prof Wahiduddin Mahmud said.
“Paperwork is vital. But people have to feel that their living standards are improving.”
He made the comments at a virtual discussion organised by the Power and Participation Research Centre (PPRC) styled “Do economists make sense to people? A different take on indicators of development” on Saturday.
The discussion was part of a series of policy conversations called ‘Today’s Agenda’, which seeks to go beyond formal policy discourses and integrate voices from policymakers, academicians, government officials, students and grassroots actors. PPRC Executive Chairman Hossain Zillur Rahman hosted the session.
Prof Mahmud said when a tourist visits a country, does he or she look into the human development indicators prepared by the United Nations Development Programme or the documents of the World Bank to find out whether the country is a high-income or low-income nation?
“The tourist rather looks at the things that are visible to get an idea about the stage of the development.”
Prof Mahmud identified a wide range of indicators so that commoners can clearly comprehend and compare the degree of development of a country instead of trying to understand the much-touted terms such as GDP growth and poverty rate as frequently used by economists and policymakers to interpret the economic wellbeing of a nation.
“Economic issues are not a matter of economists only as economic issues influence everyone’s life.”
Mahmud said the GDP, a measure of the value of final goods and services produced in a year in an economy, is a well-accepted indicator globally to measure economic development.
“However, for the common people, GDP and growth numbers are tough to decipher and relate to their everyday life.”
So, instead of paying too much attention to GDP and other terms such as the rate of poverty, one way would be to focus also on other indicators such as the types of shelter people live in, quality of drinking water, electricity connection and mobile phone use so that citizens can understand and link to their lives.
“Economists have a weakness for a single or a few indicators as these provide them a quick reading of the overall scenario on an economy,” said Mahmud, a former professor of economics at the University of Dhaka.
A dashboard approach, where every indicator can be seen, is helpful for general people to realise the extent of economic development, he said.
When South Korea and China advanced, their citizens could see the changes, Prof Mahmud said.
“A visitor gets an idea about the stage of development of an area by looking at the surroundings.”
One indicator could be the standard and discipline of long-haul public transports in a city, according to the former caretaker government adviser.
“Questions to ask are whether buses and trains follow timetable properly, whether buses and other vehicles follow traffic rules or whether buses pick and drop passengers from certain stoppages or from anywhere. What is the extent of horns?”
The second measurement is to look at the citizens’ behaviour in public places, he said.
“The question is whether people spit irrespective of places and urinate in open places,” the economist said, adding that another indicator is the respect towards women in public transports.
Mahmud proposed looking at the public services rendered by local and state governments.
It has to be seen whether there are enough spaces for pedestrians to walk on the footpath at ease, he said.
“The condition of public toilets, waste management and quality of tap water should also be taken into consideration as other development indicators.”
The aesthetic views of riverside roads could give another idea, he said, suggesting having a look at the banks of the Thames in London, the Chao Phraya of Bangkok and the Buriganga in Dhaka.
In rural areas, the genres of shelters, toilet facilities and availability of pure drinking water can be considered as the indicators to assess the level of economic development, according to Mahmud.
The scale of adulteration in food and the desire among educated people to permanently settle abroad could give other pointers, he said.
“The outlook of the youth and the people about the future is an important indicator.”
The proposed indicators are not alternative to economic research, he said, however,
“GDP and growth of per capita income are important indicators to measure economic advancement and I don’t want to undermine their vitality.”
He said he tried to identify some indicators so that common people can see and feel the progress.
“When I developed the indicators, I tried to forget that I was an economist. Rather, I tried to look around to see what is being seen.”
“I looked at the surroundings through the eyes of a tourist. When I visit other countries, I look outside through the windows of trains to see the difference between us and them.”
Mahmud said the indicators would be helpful to raise awareness among citizens and attract the attention of policymakers.
Hossain Zillur said there is an obsession with using a single indicator to explain economic advancement.
“Change in mindset is important. It is also important to come out of the obsession of a single indicator.”