As countries continue to use Gross Domestic Product (GDP) as the principal marker of economic growth and prosperity, M. Munib Zia Khan argues that countries in South Asia might consider adopting the model of a ‘wellbeing economy’ as a better measure of real prosperity for its people, amidst initial signs of limited success.
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Asia is the most populous continent, and South Asia is its most populous sub-region with a population of over 2 billion people. This provides the region great opportunities, along with posing several challenges. The majority of South Asian nations face economic hardships, and share a plethora of conditions including widespread pollution, climate change, loss of biodiversity, rampant poverty, youth unemployment, political unpredictability, and security threats. This post argues that governments in South Asia may find it worthwhile to implement a ‘wellbeing economy’ to alleviate some of the most pressing issues.
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The neo-classical growth model of economics, adopted almost everywhere and without question, is due to the general consensus that material and economic progress enhance people’s quality of life at both the individual and societal level. In reality, though, human beings are entitled to more than just material prosperity; in order to flourish, they also require strong communities, fair resource distribution and harmony between their environment and society. In a world where sustainable development is becoming important day by day, it comes as no surprise that several developed countries (like Finland, Iceland and New Zealand) have now begun to adopt the framework of a wellbeing economy — where it is crucial to consider how (rather than whether) the economy is developing — questioning the premise of Gross Domestic Product (GDP) being the only measure of growth and prosperity.
A ‘wellbeing economy’ is defined as one that places high priority on benefiting both people and the environment, according to the Wellbeing Economy Alliance (WEA). Rather than seeing economic growth as an end in and of itself, and thus chasing it at any and all costs, a wellbeing economy places priority on meeting the needs of people and the environment at the centre of its operations and ensures that these requirements are fulfilled equally by default.
The WEA mentions five key paradigms to measure a wellbeing economy:
- Participation
- Nature
- Purpose
- Dignity
- Fairness
Participation calls for active engagement of citizens in community and economic matters. Citizens are expected to give back to nature as they take from it. It is important to take preventive action to ensure that harm to people and the environment does not occur in the first place, as opposed to being satisfied to only repair the harm once it is caused. There is a shared level of purpose and belonging. Moreover, institutions should be established to serve the common good. The economy’s primary goal is to promote both ecological and human wellbeing, by using ambitious national development objectives and a broader range of metrics (beyond just GDP) to measure success. Everybody has the right to a dignified and secure life. The foundation of this system, which ensures that everyone is treated equally, must be justice for all. Living wages and collective wealth development should be among the fundamental rights for citizens.
When we look at the assessment of economy solely from the perspective of growth in GDP figures, it is easy to miss several factors that the GDP does not measure — unpaid overtime labour, wage disparities and lower-than-official living wages, loss of biodiversity, gender bias at work, and so on. Hence, despite appearances, some economic growth patterns may actually be harmful to human welfare.
Although markets are thought of as an anti-poverty engine, experts contend that for them to work effectively a set of norms, laws and institutions are necessary. In South Asia, there is a strong gender bias in the workplace, particularly in more traditional societies. The state of education is also confronted with serious challenges, with expensive private education becoming more of a fashion for those who can afford it. Additionally, many workers do not even make the liveable wage needed to raise a family with minimum dignity. The concept of a wellbeing economy can alter the mindset in the region and aim to tackle these anomalies, even if the neo-classical economic growth model has traditionally ignored them.
It will, of course, be a herculean task to draft a national policy in line with the lofty ambitions of a wellbeing economy when, for the majority of South Asian states, the traditional economic model is already on a life-support machine. That does not imply, however, that concepts of wellbeing economy and sustainable development are unimportant in this region. On the contrary, South Asia is among the regions that most needs concepts like fair resource allocation, regard for human life and dignity, environmental preservation, and citizen involvement in economic issues.
A mere transfer of the developed world’s wellbeing economy framework to South Asia would scarcely result in anything substantial, and may not even be viable. Comparing the densely populated South Asian states to less populous and more developed ones is not a fair comparison. Governments in South Asia, non-governmental and civil society organisations will all need to come up with innovative programs that suit their social reality.
There are several examples in South Asia that look toward holistic and sustainable development. For instance, India is among the top five countries in the world by Organic Agricultural Land 2022 (ha), along with Australia, Argentina, China and France.
However, its share of organic farming in terms of the total agricultural land as of 2022 hovers around 2–3 per cent, which means that there is lot of potential to grow. Approximately half of this land is located in three states — Madhya Pradesh, Rajasthan and Maharashtra; additionally, Sikkim has achieved complete organic status, thus setting a unique example in the region.
The Government of Bhutan is guided by the concept of Gross National Happiness (GNH), also referred to as Gross Domestic Happiness (GDH). The Fourth King, Jigme Singye Wangchuck, first used the term ‘gross national happiness’ in the late 1970s when he declared: ‘Gross National Happiness is more significant than Gross Domestic Product.’ According to GNH, sustainable development needs to approach ideas of progress holistically and give non-economic dimensions of happiness and welfare equal weight.
Another index is the Human Development Index (HDI), created by the Pakistani economist Mahbub ul-Haq, which divides the world’s nations into four categories based on factors such as life expectancy, education and per capita income. It was later utilised by the Human Development Report Office of the United Nations Development Programme (UNDP) to gauge the level of development of nations.
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All things considered, these initiatives show that the people of South Asia have been open and receptive to concepts of wellbeing economy and sustainable development. What is required is a more focused strategy that produces more workable solutions. One practical way forward may be to launch several small-scale, local pilot programs. If these projects are successful, they can be used as a model for creating policy at the provincial and federal levels. The combined influence of the small-scale projects, including those that do not receive national or regional acclaim, can also be substantial. In a region where building a consensus on public policy matters is a major obstacle, small-scale projects can at least be a step in the right direction.
Adopting some of the wellbeing economy ideas is essential for South Asian states to follow the route towards sustainable development. The obstacles they must overcome are more daunting than they have ever been before.
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The views expressed here are those of the author and do not represent the views of the ‘South Asia @ LSE’ blog, the LSE South Asia Centre or the London School of Economics and Political Science. Please click here for our Comments Policy.
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Banner image © Towfiqu Barbhuiya, 2021, Unsplash.
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