It is time to move beyond GDP and embrace GPI in Bangladesh

Despite our noteworthy progress in terms of GDP growth, there remains a significant gap to bridge in order to align with the happiness index. Photo: TBS

In today's rapidly changing world, the pursuit of economic development remains a central objective for nations across the globe. However, the conventional measure of Gross Domestic Product (GDP) has come under increasing scrutiny for its inability to provide a comprehensive assessment of a nation's true well-being and sustainability.

While many countries have recognised these limitations and adopted more holistic approaches, such as the Genuine Progress Indicator (GPI), Bangladesh has yet to fully tap into its potential. In this piece, we will delve deeper into the global use of GPI, examine why Bangladesh has been hesitant to adopt it and propose a roadmap for our nation to incorporate this superior metric for a brighter and more prosperous future.

The GPI, in contrast to GDP, extends its analysis beyond mere economic indicators to encompass a broader spectrum of elements contributing to societal well-being. It not only takes into account economic production but also crucial social and environmental factors, including income distribution, education, healthcare, natural resource depletion and environmental degradation.

Aligning the GPI with the UN Sustainable Development Goals (SDGs) will play a pivotal role in ensuring the enhancement of the human development index and the reduction or mitigation of carbon emissions.

While a substantial increase in GDP is expected to mirror the well-being and health of a population, it has been observed that several nations experiencing remarkable GDP growth are often situated at the lower end of the happiness index. Despite our noteworthy progress in terms of GDP growth, there remains a significant gap to bridge in order to align with the happiness index. This comprehensive perspective offers a more precise and meaningful assessment of a nation's overall progress.

In the case of social factors, such as the value of leisure time or the impact of income inequality on well-being, data collection and interpretation can be intricate. Critics may argue that these complexities make the GPI less practical than GDP, which relies on more straightforward economic data. In our eyes, GPI reflects a wider spectrum of growth using more effort.

Numerous countries have recognised the shortcomings of GDP and transitioned towards GPI or similar metrics. For instance, Bhutan has adopted the Gross National Happiness (GNH) index, which places a strong emphasis on the well-being and happiness of its citizens. Similarly, New Zealand has introduced a "Wellbeing Budget" that prioritises issues like mental health, child poverty and domestic violence, demonstrating a commitment to transcending traditional economic viewpoints.

If we add another example from the Scandinavian countries, GDP growth is not extremely high among those countries. However, their social structure is above any standard. Healthcare, education, economy, production, consumption and sustainability issues are well-marked globally. They are at the top of the UN Happiness Index.

Despite global recognition of GPI's effectiveness, Bangladesh primarily relies on GDP for development. Several factors contribute to this reluctance. Firstly, there exists a lack of awareness and understanding of GPI among policymakers and the general public, who remain entrenched in the belief that GDP is the sole measure of progress.

Secondly, there is a concern that focusing on social and environmental factors may hinder economic growth. However, a balanced approach that takes into account these dimensions can lead to sustainable and equitable development, ultimately benefiting all segments of society.

Moreover, it is important to acknowledge the criticisms and challenges associated with the GPI, as these concerns have been raised globally. Critics argue that the GPI, like any comprehensive metric, is not without flaws. Some contend that the subjective nature of assigning values to non-economic factors can lead to biases and inaccuracies.

For instance, consider the challenge of measuring the value of environmental factors in the GPI. The calculation involves assessing the impact of activities like deforestation or environmental pollution on a nation's well-being. Critics argue that assigning a monetary value to these environmental factors can be subjective and contentious. However, proponents of the GPI argue that these measures are necessary to highlight the true cost of unsustainable practices and incentivise environmentally responsible policies.

Additionally, measuring complex social and environmental variables can be challenging and may require significant data collection and analysis efforts. In the case of social factors, such as the value of leisure time or the impact of income inequality on well-being, data collection and interpretation can be intricate. Critics may argue that these complexities make the GPI less practical than GDP, which relies on more straightforward economic data. In our eyes, GPI reflects a wider spectrum of growth using more effort.

In light of the criticisms and challenges associated with GPI, it is imperative for Bangladesh to give careful consideration to these issues when implementing GPI. This entails the refinement of methodologies for quantifying non-economic factors, an increase in transparency in data collection, and ongoing engagement with experts and stakeholders.

By addressing these concerns, Bangladesh can enhance the credibility and effectiveness of the GPI as a tool for guiding its development efforts as well as align with the United Nations Sustainable Development Goals, emphasising the importance of overall prosperity, equity, and sustainability.

To harness the potential of the GPI in Bangladesh, a multifaceted approach is essential. Firstly, there is a pressing need to raise public awareness and educate both policymakers and citizens about the advantages of GPI over GDP. This can be achieved through public awareness campaigns, workshops and seminars, which will play a pivotal role in promoting the adoption of this more comprehensive metric.

Secondly, significant investments in comprehensive data collection and analysis are required to accurately calculate the GPI. This demands collaborative efforts among government agencies, research institutions and relevant stakeholders from the community to ensure that the GPI reflects a holistic view of the nation's progress.

Furthermore, integrating the GPI into the policymaking processes is crucial, shifting the focus from pure economic growth to overall well-being and sustainability. Collaborative partnerships with experts, non-governmental organisations (NGOs), and international entities can provide valuable insights and expertise to inform policy decisions.

Finally, to ensure transparency and public awareness, the government should regularly publish GPI reports alongside GDP figures. This practice will offer the public a comprehensive and nuanced view of the nation's progress, fostering a deeper understanding of the nation's development trajectory. In sum, embracing the GPI in Bangladesh requires a comprehensive strategy that encompasses awareness-building, robust data collection, policy integration and transparent reporting to ultimately pave the way for a brighter and more sustainable future.

Incorporating GPI alongside GDP does not negate the importance of economic growth, rather it broadens the scope of assessment. Bangladesh's government and policymakers should work together to establish a comprehensive GPI system tailored to the country's unique challenges and aspirations. This will enable them to make more informed decisions and drive progress that reflects the true well-being of their citizens.

The present Government of Bangladesh has made significant strides in GDP growth and now stands at a pivotal point in its development journey, seeking to elevate itself from its status as one of the least developed countries. Adopting the GPI is crucial, not only for robust economic growth but also for promoting social equity and environmental sustainability.

It is time to move beyond the limitations of GDP and embrace a more comprehensive measure of development that aligns with the changing world, ensuring a brighter, healthier and happier future for all citizens of Bangladesh. This shift will lead to a nation that not only flourishes economically but also thrives in terms of social and mental well-being and sustainability.

Dr Md Firoz Khan. Sketch: TBS

Dr Md Firoz Khan is an Associate Professor and Group Leader (Aerosol Lab) in Environmental Science and Management at North South University (NSU). He is the recipient of Dr MA Wazed Miah International Gold Medal-2022 in the "Scientist" category.

Diya Mahmood is a student of Environmental Science and Management at North South University (NSU).

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions and views of The Business Standard.