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Use visible indicators, not just GDP, to measure development: Wahiduddin

DalalErMaNodi

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The economist said development should be measured by basic indicators of quality of life, such as housing conditions and sewerage systems

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Eminent economist, Wahiduddin Mahmud, has urged practitioners to amplify the importance of visible indicators by reducing reliance on gross domestic product (GDP) as a single indicator to measure the pace of economic development.

He said it is very difficult to calculate the GDP by adding the value of the sum of goods and services produced in all sectors of a country each year.

"As GDP calculation does not include all the production in the informal sector, many estimates have to be relied upon. In some sectors, we may end up double-dipping."


He was addressing the first episode of a dialogue series organised by Power and Participation Research Centre, a private research organisation, on Saturday night. He was the main discussant during the online episode titled "Do economists make sense? A different take on the indicators of development".


Wahiduddin said there are so many complexities in GDP calculations that with the exception of government officials directly involved in it, even economists do not have adequate information, let alone the public at large.


Although GDP calculation is much like the black box of an aeroplane, there is no other easy indicator to make comparisons with other countries and that is why this indicator is popular among economists, he said.

"The development of any country should be measured by visible indicators. Development should be measured by basic indicators of quality of life. Indicators such as housing conditions, quality of drinking water, sewerage systems, use of mobile phones, and the number of people having access to electricity can be simple criteria for development," explained Wahiduddin, also a former adviser to a caretaker government.

He said the rate of GDP growth does not reflect inequality and poverty.

"GDP is measured by a number of criteria, including total production, value addition, and expenditure. On the other hand, poverty rate is measured by the household income-expense survey. The results of the two surveys often do not match. Although growth rate increases rapidly, poverty rate decreases at a relatively low rate. Often, there are inconsistencies in the data of the two surveys. The credibility of statistics is also questioned," said the economist.

Economists extensively discuss and debate the rate of growth, but inequality and poverty alleviation are not highlighted that way, he said.

"Someone coming here from another country will not be interested in finding out our GDP by opening a World Bank book. They will not analyse the situation here by looking at the United Nations Development Programme human development index either. They will get an idea of the country by looking at the physical manifestation of the situation."

Giving an example, he said, "A pilot keeps his eyes on the dashboard when he flies a plane. The dashboard presents various information."

During the discussion, he presented the idea of some new alternative visible indicators for urban and rural areas to measure the development of the country.

The new indicators for urban areas include quality and discipline of urban and long-haul public transports, public display of etiquette, quality of citizen services, waste management, and natural beauty of the city.

On the other hand, indicators for development in rural areas include the exteriors of rural households, the quality of drinking water sources, the clothing and nutrition of school children, and the level of aspiration of educated citizens to permanently move overseas.

"Indicators such as whether the timely running of buses and trains, the extent to which traffic rules are obeyed, the decibel level of traffic noise, and the frequency/pattern of transport routes easily reveal the state of development of the country.

"Also, the level of decency of citizens and development can be measured by indicators such as whether urban people spit indiscriminately, whether they urinate in public, the public display of etiquette and decorum, treatment of women, whether people act in a health-conscious way," Wahiduddin elucidated.

Speaking about quality of citizen services, he said, "Its development can be measured by observing the sewerage systems, how pedestrians in major cities are prioritised vs passengers in cars, and the quality of tap water."

Apart from these factors, the quality of waste management and the natural beauty of big cities, especially the appearance of adjacent rivers, also reflect the state of development, he pointed out.

As for rural development indicators, Wahiduddin said, "The external appearance of village homesteads is a good measure of how much people's lives have improved. When village children go to school, you can gauge their development by looking at their nutritional status and clothing. Moreover, it is very easy to get information about the use of toilets, sanitation systems, and water sources in rural areas."

Development can also be measured by the level of aspiration of educated rural inhabitants to migrate overseas, he said, adding this indicator gives an idea about job security, quality of life, education and learning environment, and future security.

He lamented that economists do not want to go beyond the conventional indicators. "They are less interested in doing so."

Power and Participation Research Centre Chairman, Dr Hossain Zillur Rahman, who moderated the event, said it is not possible to measure overall development of the poor in terms of GDP.

"If income growth figures of the poorest 40% are released, along with GDP growth figures, this will give some idea about development."

He urged experts to focus on whether various core needs of the citizenry are being met, rather than look at "a flood of indicators".

Zillur also emphasised on sustainable development, saying the government wants to transform villages into cities, but a largely chaotic situation already prevails in the cities.

He feared that the situation would deteriorate if the chaos in urban centers is moved over to the villages.





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bluesky

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It is good to see some people really understand that not GDP but the quality of life and civic facilities enjoyed by the populace are the main measure of a country's development.

I ask Wahiduddin to include solution of waterlogging in Dhaka in his index for good life. Waterlogging here and there is a menace that must be removed. I have read one news report that said our big govt planners are contemplating to build an artificial lake to take Dhaka rain water there.

It is the most stupid proposition I have ever heard.
 

idune

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After CPD, Wahiduddin Mahmud saying the same thing, GDP growth fairy tale is awami regime cooked up job, does NOT reflect real economic situation. He is asking to use visible indicators which will be mode reflective. This will not go down with regime propaganda machines.
 

Destranator

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Growing at 8% requires massive improvement in labour productivity, infrastructure and capital investment. These things have not improved to this extent. Exaggerated figures build up one on top of the other year-on-year making data increasingly unreliable. We are only fooling ourselves if we accept BBS data on face value.

No doubt Bangladesh is growing fast but not that fast. BBS should be transparent and publish how exactly they come up with their figures.
The concern of potential double dipping as raised by Wahiuddin needs serious investigation.

BBS deserves to get audited by a foreign audit agency such as KPMG, E&Y, PwC, etc.


BBS stats have been questioned over the years by multiple credible bodies.


People who get excited by IMF/ADB "confirmation" of figures need to realise that they are forced to rely largely on BBS data for their anaysis as they cannot afford to carry out field surveys and audits.

Instead of giggling at "exceeding" fellow third world backwater nations in the neighbourhood based on questionable figures, we should focus on discussing our institutional deficiencies. The first step towards solving a problem is to acknowledge that it exists.
 
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Protest_again

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Growing at 8% requires massive improvement in labour productivity, infrastructure and capital investment. These things have not improved to this extent. Exaggerated figures build up one on top of the other year-on-year making data increasingly unreliable. We are only fooling ourselves if we accept BBS data on face value.

No doubt Bangladesh is growing fast but not that fast. BBS should be transparent and publish how exactly they come up with their figures.
The concern of potential double dipping as raised by Wahiuddin needs serious investigation.

BBS deserves to get audited by a foreign audit agency such as KPMG, E&Y, PwC, etc.


BBS stats have been questioned over the years by multiple credible bodies.




People who get excited by IMF/ADB "confirmation" of figures need to realise that they are forced to rely largely on BBS data for their anaysis as they cannot afford to carry out field surveys and audits.

Instead of giggling at "exceeding" fellow third world backwater nations in the neighbourhood based on questionable figures, we should focus on discussing our institutional deficiencies. The first step towards solving a problem is to acknowledge that it exists.
I was looking at how BBS calculate its GDP. Do you know how they come up with Domestic savings?

While presenting national accounts aggregates, BBS provides two different saving estimates
corresponding to two definitions of saving – these are called domestic and national saving respectively.

A little reflection shows, however, that domestic saving, as defined, is a meaningless concept and should be dispensed with completely. BBS defines the two concepts as follows:

Domestic saving (DS) = GDP – C, where C stands for consumption expenditure.

National saving (NS) = GNDI – C,
where GNDI stands for Gross National Disposable Income, which as noted earlier, is defined as

GNDI = GDP + net factor income from abroad (NFI)+ net current transfer from abroad (NCT)

Conceptually, saving is simply ‘the part of income that is not consumed’ – this is true as much of a country as of an individual or a household.

There is no provision for corruption or illegal transfer of money to abroad. It is simply assumed that if it is not consumed it is saved. No wonder gross investment in GDP calculations is shown as over 31%. It is disingenuous to do it this way to cover up corruption by the elite.
 
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