‘Quality of Life Beyond GDP’ issues get attention at SLEA Annual Sessions
The need to construct a broad set of indicators beyond the traditional measure of GDP to reflect the quality of life of people was discussed at this year’s Annual Sessions of the Sri Lanka Economic Association (SLEA) held at the Centre for Banking Studies, Rajagiriya last week.
The symposium themed “GDP as a Measure of Quality of Life of a People” was conducted under the auspices of Prof. A.D.V.de S. Indraratna, President of SLEA.
Chief Guest at the Annual Sessions, Professor Dayantha Wijeyesekera, Chancellor, University of Vocational Technology, stressed the importance of economics on investment in tertiary education. In particular, technical and vocational education through foreign loans, would be beneficial to the nation only when employable human capital is developed and not by purely constructing buildings and procuring equipment, which are most often underutilized.
He stressed that impact analyses of earlier similar projects should be carried out prior to getting into further debt, so that the same mistakes and omissions are not repeated. Referring to infrastructure development specially on the road sector, Prof. Wijeyesekera emphasized the importance of even distribution of develop- ment both in urban and rural areas, while expressing the distinct difference between Expressways and Highways by stating that “all Expressways are Highways, but all Highways are not Expressways”, as this quite often misquoted.
Prof. Indraratna in his Presidential Address stated that GDP (Gross Domestic Product) is one of the most, if not the most, popularly or frequently used terms in economics literature, documentation, debate and discussion. At the same time it is one of the most misunderstood, misinterpreted and misused terms. GDP is the total net value of goods and services produced within a country or by a nation during a given period of time. Prof. Indraratna noted that quality of life or human welfare includes material welfare as indicated by the available per capita goods and services as well as non-material welfare-if one may use that term, covering environmental quality, safety and security with law and order and rule of law. He also noted that the GDP measure is crucial in political economy, but at the same time most difficult to correctly measure and the measure has its own limitations. Many refer to GDP and repeat it without knowledge of its true nature, significance, uses and limitations. “In our own country questions have been recently raised in regard to its conceptual significance, methods of its measurement, its relevance or validity at current market prices and its ability to express inequality, disparity, poverty and welfare. It is because of these reasons that SLEA had thought it fit to select GDP as a Measure of Quality of Life of a People as the theme of this year’s Annual Sessions,” he added.
Dr. S.S. Colombage, keynote speaker at the Annual Sessions, stressed that GDP is often used as an indicator of quality of life though it is not meant for such purpose. Simon Kuznets invented the concept of GDP in 1934 so as to track the econom- ic activity in the United States which was badly hit by the Great Depression, as GDP growth was associated with the resulting improvements in living standards including jobs, sustained incomes, food and nutrition, health, shelter and education, it was interpreted as progress of social wellbeing. What is good for GDP is good for society became the norm. Realizing the danger of using GDP in such a manner, Kuzents himself warned against using GDP as an indicator of social progress. The criticisms against GDP have been compounded in recent decades due to factors such as income disparities, environmental degradation and global financial crises.
While recognizing these drawbacks, Dr. Colombage emphasized that dashboard indicators would be ideal to track the social and environmental dimensions while retaining GDP to measure the aggregate production, income and expenditure for macroeconomic management. GDP is do- ing what it is asked to do, i.e. measuring economic activity, and therefore, it is unfair to expect GDP to tell us about quality of life, he noted.
The council of the association for 2014/15 comprises - Prof. A.D.V.de S. Indraratne (re-elected as the President); Vice Presidents - C. Maliyadde, Dr. Locana Gunaratne, R.M.B. Senanayake, Prof. H.D.Karunaratne, Dr. S.S.Colombage and Malraj B. Kiriella; General Secretary - Dr. M. Sumanadasa; Treasurer - P.T. Sirisena; Editor and Business editor -. Sarath Vidanagama and D.G. Dayaratne; Saliya Balasooriya (Assistant General Secretary), Dr. M.Ganeshmoorthy (Assistant Treasurer);. Priyanga Dunusignhe (Assistant Editor)’ Members - Rev Prof. W. Wimalaratana, Dr. Upananda Vidanapathirana, Anushka Wijesinghe, Raja Korale, Ms. Nimal Breckenridge, M.N. Nuwan Medonza, Dilhan Thotahewage, Nihal Rodrigo, J.M.T.B. Jayasundera and Ms. Dharshani Premaratne.