19 April 2011

Is GDP the Way to Measure Success?

This past week our program has been focused on water issues specifically on Dams as a source of energy and irrigation. Over this week I expected to think of grassroots movements, the environmental and cultural impact of dams, as well as the political forces that guided their building. While I did learn about these things the topic that was on my mind most during this unit was GDP (Gross Domestic Product.)

As an economics major at Beloit College I decided to study abroad in hopes of taking a break from studying the economy in order to explore my other interests. In actuality, being on the CIEE program in Issan, Thailand has only served to bring me into direct contact with the economic theories I studied in the classroom at Beloit. I can not get away from economics because it directly guides government policies, especially the concept of GDP.

After only a few months we have noticed a very dominating pattern in Issan. The Issan people live in a traditional sustainable way, the government decides that the region is not contributing enough to GDP so implements a project that will “help the poor people of Issan” by boosting their economy. This past unit it was a dam that would destroy fishery and flood several communities but increase government spending. They were also built to create domestic energy, reducing imports, and to irrigate non-native jasmine rice fields to increase exports. Though it was discovered that Issan region is not suitable for irrigation dams because salt deposits underground are released by the pressure caused by the dam’s reservoir.

During our first unit the government encouraged previously self-sustaining farmers to contract farm and use chemical fertilizers. Our second unit, we learned that farmers were kicked off of their land so that tourist resorts could be built and companies could come in to start eucalyptus plantations. All of these actions created a poorer quality of life for the Isaan people but potentially boosted the overall GDP of the country. The problem is that GDP does not measure wellbeing, it is the measure of a countries yearly output. All the money that has been moving around the economy is added up. So if one person, say Thaksin, generates a lot of money, while all of his neighbors are impoverished and starving, the GDP will show that the community is doing great. But the GDP of a fishing village, that sustains itself from the land and the community around it, will be extremely low which people will use as an indicator of extreme poverty.

While GDP is obviously a poor indicator of the wellbeing of the economy it is the measure used by all countries to guide its policies. That is all countries excepting Bhutan. In Bhutan a measure called Gross National Happiness is used. While happiness seems immeasurable Bhutan has come up with an intricate system based on nine domains: “Psychological Wellbeing, Time Use, Community Vitality, Cultural Diversity and Resilience, Health, Education, Ecological Diversity and Resilience, Living Standard, and Good Governance.” Though only here for a short time, all of my peers know enough about Issan to realize that if the Thai government was focused on GHP instead of GDP, Issan would not have many of the problems it is facing today.

Sofia Noorani
Beloit College


Maddisen Domingo said...

I, too, have been struggling with the traditional idea of “poverty” as presented in western academia since starting this program. Without a doubt, I’ve also come to the realization that money is not synonymous with happiness. I remember the moment that this idea became clear to me. While interviewing one of my host mom’s we began talking about debt and money issues. My mom simply and quickly exclaimed that debt was not a problem for her family. She explained that they grew their own food, made their own shampoo, and really only decided to get electricity so they could host CIEE students. In removing herself and her family from the economy, she was able to live simply and happily, but as you pointed out, sometimes this isn’t enough. According the UN, the Thai government, and other entities, my host mom is impoverished. Without a traditional income she does not contribute to the GDP and therefore is seen as problematic by most economic standards. Although, I do not understand the way to correct this grave misunderstanding between large structures, ideologies, and daily lifestyles, I do know that some form of understanding must grow between the parties in order to stop the marginalization of Thailand’s, and the World’s, “poor”. Perhaps, the first step is investigating further this idea of Gross National Happiness.

huckabone said...

Economy has always been a subject I avoid, mostly because I am overwhelmed by jargon and theories that I assume have nothing to do with the life I lead. However, while in Thailand I am finding more and more that these things do relate to my life. It seems, as you mentioned above, that in terms of development it is often difficult for people to examine anything other than large-scale economies. This leads to problems such as the ones we have seen in Thailand. This idea is one I have been struggling with. I have always assumed that development projects are always good because they are done with the intention of helping poorer people have better lives. Little did I know that wealth is assessed on a national level in terms of GDP which by no means is representative of individual happiness or wealth especially in developing countries like Thailand.

Lindsay Friedman said...

Yesterday, during our last exchange P'Swuit explained that countries should measure its GDH, Gross Domestic Happiness rather than Gross Domestic Product. I believe he is right. The GDP does not accurately measure the current status of its country. In the Dam unit we were provided many examples of a government not taking its own people into consideration. Some people are accounted for, the privileged, while a vast majority is not. The country would benefit more from its people if they kept them happy. Happy workers produce more and are willing to work harder. If the happiness is taken away from the job required of them, then the country looses in the end. We should reconsider the GDP and what it really takes into account.
Through our exploration of issues on people and the environment I have learned that we have a more flawed social economic system than I thought. Working with grassroots organizations and communities will hopefully change this in Thailand. Achieving Gross Domestic Happiness will come once grassroots and the government can work together and realize the potential of its people.

Austyn said...

I first read about Gross National Happiness (GNH)in a book called the Geography of Bliss that talked about Bhutan's different way of measuring success. And I think you can see it working in really concrete ways. First, the lack of international attention they want upon their country. You have to pay $200 a day to visit Bhutan, and this really limits tourists, and in this way, the negative effects of globalization in altering a countries traditional culture, food, goods, etc. It makes me question whether even ideas-sharing qualifies globalization as a positive thing. Isn't Bhutan doing well with less ideas? Secondly, over 70% of Bhutan is still forested, and with Thailand falling sorely behind that percentage, I think it's value of ecological resilience ensures this percentage as lasting.
I really relate to Maddie's point about poverty. How are we measuring "poverty"? From the Assembly of the Poor speech we read by Wanida, poverty seems to be more a result of structural changes than an inherent poverty in "less developed" nations. Developed how? To me, the epitome of development should be measurements like the GNH that analyze people's livelihoods over their bank accounts.