Economic Development And Sustainable Development

Development may be associated with structural transformation from a primary good based

production to manufacturing and service base economy. It may also be associated with social

aspects such as poverty, employment state and equality. Commonly, countries tend to measure

economic development to determine the overall development. The scope of economic

development includes the process and policies by which a nation improves the economic,

political, and social well-being of its people. 1

The measurements commonly used by countries are notably Gross Domestic Product (GDP)

and Gross National Product/Income. Other measurements include, but are not limited to; the

Human Development Index, Happiness Index, UN agencies' inclusive wealth

Despite being the most common form of measurement among countries, GDP has been

unsuccessful in measuring anything other than economic progress. Foremost, it cannot

measure sustainability of the development. Sustainable development is defined as

"development that meets the needs of the present without compromising the ability of future

generations to meet their own needs"3. From a recent study, it was shown that from 1992 to

2010, global GDP increased by 50%; but of the 140 countries studied, only 13 saw their per-

person natural capital rise: that implies a widespread environmental degradation countries

making unsustainable use of resources to power their GDP growth4. They are “consuming

beyond their means” and this is because GDP does not take into account of negative externality

such as pollution, degradation of the environment and more. Using GDP as an indicator of

growth is short sighted since it encourages depletion of our finite natural resources using

economic development as an excuse, without consideration of future generation.

GDP measures products only in market prices basis. It fails to take into account of

concepts, they are truly among the great inventions of the twentieth century.” Used by many

countries, GDP is necessary for economists to formulate and implement policies by determining

the state of the economy. With a better informed policies and institutions, economic shock due

to fall in oil prices, terrorist attack or other circumstances can be minimised, preventing severe

business shock10.

However, much is needed to be done to improve the accuracy of GDP. For one, we have to

expand our data and speed of which it can be accessed. For example, in 2008, the original

estimate of GDP growth of the United States of America for the fourth quarter was initially a

contraction of 3.8 percent. However, after revising the data, economists have suggested the

figure of 8.9 percent, indicating a recession far more serious than most people realized in early

2009 when Congress was debating President Barack Obama’s stimulus bill11. Had the US

government been able to have access to better information and data during the time