sideviews

GDP not everything – TK Chua

February 22, 2016

Malaysia’s gross domestic product (GDP) grew by 5% in 2015 and a statement was made by the prime minister that our economy was among the best in Asean.

He further reiterated that the economy will remain strong, stable and on “track”. To be fair to him, he also reminded Malaysians not to take things easy but to be proactive to safeguard the well-being of the people.

There are many indicators to gauge the health of an economy and the well-being of its people. GDP numbers are probably one of the most common measures but they are also the hazardous indicators of economic well-being.

The size of GDP is a “geographical” concept; it measures the total amount of goods and services produced in a geographical area (in this case the territories covering Malaysia) in a year or a quarter.

GDP, unlike gross national product (GNP), is not a national concept. In other words, goods and services tabulated in GDP could be attributed to foreign capitals and foreign labours and so they are technically not owned or possessed by Malaysians.

A bigger GDP from foreign capital and labour will not have much impact on per capita income among Malaysians.

With five million foreign workers and counting – who really knows the actual number nowadays – I doubt the usefulness of GDP and GDP growth numbers as indicators of economic well-being among Malaysians.

Perhaps this is one of the reasons why Malaysia’s impressive GDP growth in recent years had not been translated into higher per capital income or better living conditions among Malaysians. The bulk of the profits and wages are in actual fact accrued to foreigners.

With unfettered entry of foreign workers, we may soon have to fight for clean water, fresh air, decent food prices, public transportation, medical services and even education.

Bigger and higher GDP growth do not automatically benefit Malaysians. On the contrary, the unintended consequences of development will fall on many Malaysians even though they have benefitted nothing much from it.

We must critically examine our economic model.  Malaysia was a beautiful country with a “right size” population unlike Indonesia, Thailand or Vietnam.

We were relatively rich and we did not have massive unemployment problems. So why are we obsessed with neck-breaking growth which is way beyond our resource potential?

Why can’t we preserve the good life we have and grow at our own pace? As it is, we are busily “creating” a bigger GDP that does not fully belong to us?

We are destroying our environment and turning the whole country into a giant garbage dump simply because we want bigger GDP numbers which are meaningless to most.

In case some of you cannot understand me, I suggest we look to the New Zealand or Norway model.

They keep the population small, the environment clean and pristine, and their economies growing within their own potentials.  Do they miss anything that we Malaysians are “enjoying” now? – February 22, 2016.

* This is the personal opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insider.