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Factors adding up to big, detrimental GDP

By CHEN WEIHUA
Updated: 2009-09-29 00:00

Three months ago I wrote about the excavation of a sidewalk outside my apartment compound by a sewage company. It was once again dug up a week ago by a cable business.

The high-rise at the street corner looks pretty new, but it, too, is being whitewashed clean these days as Shanghai’s massive facelift continues ahead of next year’s World Expo.

The bus-stop signboards erected only a few years ago have been replaced with newly designed ones. Yet even the new ones are short-lived because expats have already complained that the billboards are not bilingual.

What these wasteful activities have in common is that they all contribute to local GDP growth. 

It is the same ever-expanding mining and manufacturing industries, which worsen our air, water and soil pollution, that also propel GDP growth forward these days. 

In an effort to save the economy suffering further from the global financial crisis, some government officials are once again obsessed with blind pursuit of GDP rather than “Green GDP”, which was the nation’s catchphrase just a few years ago. 

The decision a year ago to suspend work on a Green GDP calculation and reporting system has only encouraged local leaders to overlook the environmental impact of economic expansion. 

The first and last Green GDP report issued in 2006 painted a gloomy picture compared with the usual GDP report. The adoption of a partial Green GDP tracking system then showed a three percent drop in overall productivity.

As the fever for Green GDP quickly fades, we hear more instead about rosy predictions for GDP, including highlights on how China’s economy is expected to surpass Japan in three years and the United States in 18 years. 

This seemingly exciting news has not only diverted people’s attention from the ‘green’ matter, it has also confused people about the real health of our economy and whether it contributes positively to the well being of 1.3 billion Chinese. 

Hopefully, words from the Nobel Prize-winning economist Joseph Stiglitz, who advises the Chinese government and still wields huge influence among the people, will help wake up many from this nightmarish dream we are living in the pursuit of higher GDP growth.

Stiglitz recently called on people to “get away from GDP fetishism and to understand the limits of it”. He and his panel of experts concluded that GDP alone was insufficient in truly measuring a country’s economic health and sustainability. He emphasized that human wellbeing must be included in these factors.

Making people aware of the health of our economy and the grave environmental challenges faced by the country is important. A lot can be done even without a Green GDP report at the moment.

The Genuine Progress Index (GPI) is definitely one such index that should be promoted. GPI is an attempt to measure whether a country’s growth, or increased production of goods and expanding services, has actually resulted in the improvement of the welfare of the people in the country.

Another more readily available option is the United Nations’ Development Program’s Human Development Index (HDI), which measures life expectancy, adult literacy and education level as well as purchasing power parity.

According to the last HDI report based on 2006 data, China ranked 94 among 179 countries and regions in the world. It even trailed behind countries such as Jordan, Iran, Jamaica and Lebanon.

 

chenweihua@chinadaily.com.cn