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Tuesday, July 29, 2008

Gross National Happiness

The tiny Himalayan kingdom of Bhutan has created a new way to define prosperity: by measuring actual well-being rather than consumption.

by Rajni Bakshi

Resurgence via Alternet (January 25 2005)

The tiny Himalayan kingdom of Bhutan is an unlikely place for the birth of an international trend. Yet Bhutan is emerging as a global leader in the promotion of "Gross National Happiness" a concept it first embraced three decades ago and which is now being fleshed out by a wide range of professionals and agencies across the world.

The term Gross National Happiness (GNH) was coined by Bhutan's King Jigme Singye Wangchuck, when he ascended the throne in 1972. It signalled his commitment to building an economy that would serve Bhutan's unique culture permeated by Buddhist spiritual values.

Today, the concept of GNH resonates with a wide range of initiatives, across the world, to define prosperity in more holistic terms and to measure actual wellbeing rather than consumption. By contrast the conventional concept of Gross National Product (GNP) measures only the sum total of material production and exchange in any country. Thus an international conference on Gross National Happiness, hosted by the Bhutan government in the capital city of Thimphu in 2004, attracted 82 eminent participants from twenty countries.

The evolving concept of GNH could well be the most significant advancement in economic theory over the last 150 years, according to Frank Dixon, a Harvard Business School graduate who is currently managing director of research at Innovest Strategic Value Advisors. Innovest is the largest international financial services firm catering to ethical investment funds.

"GNH is an endeavor to greatly enhance the sophistication of human systems by emulating the infinitely greater sophistication of nature", says Dixon.

Just what would it mean for economic structures to emulate nature? Dixon and others explain it as follows. At present individual companies and entire countries are compelled to keep growing indefinitely. The only parallel for this in the natural world is cancer cells, which by growing exponentially destroy the host body and themselves.

Today it is widely acknowledged that the human economy cannot keep growing at the cost of its habitat. Yet even after two decades of expanding environmental regulation we are still losing the race to save the planet. This is partly because production systems and consumption patterns are out of sync with the carrying capacity of the planet. The pressure for ever higher GNP is merely one manifestation of this.

The concept of GNH is seen as one of several ways in which these imbalances might be rectified. The international gathering at Thimphu reflected a consensus that Gross National Product would still need to be measured and given due importance but in ways that are actually conducive to GNH. So far there has been a tendency to treat GNH as merely the well-intentioned slogan of a small country ruled by an enlightened monarch. The obvious difficulties of defining or measuring happiness have also helped to keep the concept of GNH on the outer fringes of serious discourse.

However, as the conference in Thimphu showed, basic happiness can be measured since it pertains to quality of nutrition, housing, education, health care and community life. Thus, GNH may indeed be ready to come of age. The concept is essential for anyone working on development, says Mieko Nishimizu, an economist who was formerly the World Bank's vice president for the South Asia region and attended the Thimphu conference.

Three major factors seem to be responsible for the expanding credibility of GNH. One, there is wider awareness that GNP is a one-dimensional and thus misleading measure. Two, a wide range of indices have been devised which offer a more realistic assessment of even material prosperity. Three, there is growing pressure for an infusion of moral and cultural values into the core of economic policy.

The GNP was never intended to be a measure of actual well-being. It is the artefact of a time when it was assumed that if there are more goods in circulation, general welfare is ensured. As extensive documentation has shown, this is not always the case. Moreover, attention has also been drawn to dire side effects of the GNP-driven model of economic growth in many societies, including the US with its multiple social crises and rising sales of antidepressants.

Such critiques are not new. Back in 1968 Robert Kennedy lamented that the GNP also grows because of the sales of rifles and knives and "television programs which glorify violence in order to sell toys to our children ... (it) does not allow for the health of our children, the quality of their education, or the joy of their play".

Since 1995, an Oakland-based think tank called Redefining Progress has been annually assessing the American economy with an alternative yardstick called the Genuine Progress Indicator (GPI), which presents a relatively grim picture of American society compared to the GDP (as GNP is called in the US).

The GPI index gets closer to the reality of people's lives in the following ways. It includes the household and volunteer economy which is completely ignored by the GNP. It notes as a "loss" all money spent on either preventing crime or repairing damage caused by it. Similarly all money spent on water filters, air purification and other ways of coping with environmental degradation is counted as a loss. Likewise money that goes into circulation because of car crashes and divorces is noted as a loss. The GPI also takes into account the extent to which the whole population shares in increasing material abundance.

The GPI is just one among several endeavors to evolve new indicators that measure actual conditions of human wellbeing. Some of the pioneers in developing such indicators were present at the GNH conference in Thimphu, including Frank Bracho of Venezuela, who was ambassador to India in the early 1990s. Bracho pointed out that though countries as diverse as Costa Rica, Canada, Iceland, the Netherlands, Sri Lanka and Mongolia have established well-being indicators, the hegemony of the GNP measure remains in place.

This is why Bhutan's insistence on the primacy of GNH over GNP inspires people far beyond its borders. Bhutan's commitment to GNH has meant that moral and ethical values are placed at the core of its economic strategies for ensuring better food, housing and health for a population of just over 710,000 people. GNH has allowed Bhutan to both expand its network of roads and increase its forest cover. In most other developing countries the arrival of roads is inevitably followed by deforestation. This is not to suggest that all is well in the Kingdom of Bhutan or that it is able to fully live up to its GNH commitment. Yet its achievements are remarkable.

The wide range of people present at the conference was largely due to the engagement of Sander Tideman, from Holland, who was once a banker and is currently coordinator for the Spirit in Business network. Tideman says that though Bhutan's move toward GNH has been more of a guiding principle than an actual form of measure, its impact has been powerful. For example, the government has restricted tourism in order to prevent its eroding impacts on local cultural values. This has allowed temples in Bhutan to remain places of study, worship and spiritual practice rather than mere tourist attractions.

The declaration adopted by participants at the Thimphu conference said that the facilitation of GNH should be accompanied by "the development of indicators that address human physical and emotional well-being. They must be capable of use for self-evaluation, so that individuals and groups may gauge their progress in the attainment of happiness. In addition, indicators should facilitate full accountability, good governance, and socially constructive business practices, both in day-to-day life and in long-range policies and activities."

´╗┐Rajni Bakshi is a journalist based in Mumbai.

Bill Totten


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