Last week, Brazil’s GDP growth rate for 2011 came in at 2.7%, a low number when compared to the election year primed 7.5% of 2010. In a Beyond Brics post, which cites our Brazilintel e-briefing on the subject of GDP fixation missing the point, Jonathan Wheatley points out that this metric has its uses if you factor in the output needed to create to support its population to prosper and corresponding public spending skillz. The post points to various prosperity blocking bottlenecks that the country needs to sort out if it wants to hit its marks. Our step on would be that higher growth alone both in terms of actual output and as a jagged enough spur for sorting out the issues, will never raise the bar and tackle the big problems like it should.
In the e-briefing we call for a version of GDP that includes all the hidden costs (e.g. mo cars, mo problems) and for the creation of national wealth stocks to help a country figure what it has got, citing Umair Haque’s Betterness where he fleshes this out. To explain what we mean, here is a quote from an article of his for The Atlantic. GDP Needs Help: Lets build a second measure of economic strength
GDP is an income statement for an economy–to use my auto allegory, a rev counter. But a balance sheet is like a speedometer. It tells us whether our effort–our busyness–is actually getting us anywhere.
Make no mistake, this is a generational project. But looking across a world in flux it’s hard to see an industry or big issue that doesn’t look like someone slowly sinking to a foretold watery afterlife with every hurried step across a swimming pool with the cover on.
Chandran Nair’s FT op-ed from last week digs into this a bit more from the Asian side and resource, consumption impossibilites:
What to do for big (sort of) fast-growing countries that are the new hubs of global economic dynamism? Counting what matters is a critical first step. In a blog post for Brazilintel last week we look at green GDP proposals being put forward. A bolder step forward came last week from the organisation Nossa Belo Horizonte. Following similar efforts in Sao Paulo, they launched a set of (73 in total) wellbeing indicators (port) for the city – the capital of the Brazilian state of Minas Gerais exploring things like health, education, violence, the environment, employment, social services and urban mobility. The organisation is part of a national network of citizen groups looking to sort out their cities and measure what matters to living well.
This is but one part of creating an institutional infrastructure for measuring progress that is better suited to delivering prosperity. That political and corporate narratives are absent from the conversation is particularly tragic for us and them. If they want, they can keep struggling against the inevitability of a chlorine soaked, plastic wrapped unhappy ending. Or they can join in, go beyond thinking about what it will take to pump up next quarter’s numbers and make real strides in cracking this conundrum.