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Is It Enough to Be Rich to Be Happy? The Concept of GNH (Part II)

Is It Enough to Be Rich to Be Happy? The Concept of GNH (Part II)

GROSS NATIONAL HAPPINESS (GNH) is a multidimensional index which captures by far the maximum aspects of the human development process. It believes that ‘Happiness’, well-being and welfare, whichever way one describes it, is itself is a multi-dimensional concept and therefore cannot be narrowed down to only income and wealth but basically has to do with an individual and his ‘state of ‘Being’, both mental and physical.

It provides a holistic approach to ‘Well-Being’ and considers both, economic and non –economic factors such as social, cultural, physical, mental, environmental and others. GNH is thus a broader approach to defining  growth, progress and happiness, blending both objective and subjective aspects of growth and development, by looking at both, individuals’ expectations and a nation’s targets while framing policies.

Defining GNH

GNH has been defined as follows:

 “…. GNH measures the quality of a country in a more holistic way and believes that beneficial development of Human society takes place when material and spiritual development occurs side by side to compliment and reinforce each other”.

“…GNH is a multidimensional development approach that seeks to achieve a harmonious balance between material well-being and the spiritual, emotional and cultural needs of our society”.

Evolution of the concept

The term GNH originated and was developed by the Fourth King of Bhutan, Jigme Singye Wangchuk in the 1970’s. In fact, GNH was declared to be more important than GNP in Bhutan since the Bhutanese believe it to be the true reflection of happiness and progress.

In 2012, the UN had its high level meeting on Happiness and well-being chaired by the PM of Bhutan. The World Happiness report provides an analysis of GNH and its implications.

Significance of the concept

GNH, as stated earlier, includes all the missing aspects in the GDP approach, viz. socio- economic costs of development, the environmental aspects, physical well-being of individuals, quality of life measured in terms of education and many more dimensions, are included in GNH indices. GNH Index thus has very strong policy implications for the world today, being an answer the oft-asked question of whether GDP is a true measure of a country’s progress and well-being. The GNH index has caught the attention of the world   by including parameters other than only GNP/GDP to reflect the true meaning of growth.

Beginning with four indicators, viz. governance, sustainable socio-economic development, cultural preservation and environmental conservation, the GNH Index has expanded to 33 indicators classified under the following nine main domains:

Nine Domains of GNH

Data on Ranks of Countries By GDP & GNH

Very interesting features of the status of countries is revealed based on the Gross National Product (GNP), Gross Domestic Product (GDP), Gross National Happiness (GNH) indicators. The following  data refers to 2019-2020 and provides the ranking of countries by the traditional measure of GDP and the GNH parameters. 

As can be seen in figure 1 below, not surprisingly, USA, China, Japan, Germany feature as the four topmost wealthy countries ,measured in terms of GDP (USD Trillion $). Figure 2, given below, ranks countries on the basis of GDP Growth  rates (Actual and Projected) for 2019-20 .Based on this indicator China ,USA ,India followed by Japan take the lead .

Figure 1
Figure 2

The following figures reveal the status and position of selected countries based on the GNH parameter. The World Happiness Report ranks 149 countries on the basis of the GNH index and places India at 139 positions out of 149 countries of the world.

Top 5 countries by GNH are Finland, Iceland, Denmark, and Switzerland which do not feature in top 5 countries by GDP ranking. The reason for this is as stated earlier, that the parameters of GNH are broader and more comprehensive and captures economic, social, political cultural wellbeing of a country and its citizens.

Figure 4 ranks the happiest countries in the world and very interestingly the USA and the UK rank at 14 and 18 respectively , indicating the importance of looking at broader aspects in the process of economic growth and development.

Figure 3
Figure 4

Figure 5 provides a glimpse of worlds happiest and saddest nations in 2018. Finland was the happiest nation and Burundi was the saddest country according to GNH parameters and report.

Figure 5

Concluding Observations

The GNH index has certain crucial limitations like it is difficult to apply it in practice especially where countries have a huge population like China and India. The concept of ‘happiness’ is a very individual and subjective term and a state of mind which is difficult to capture in an index. There would be an element of inaccuracy while trying to express the extent of happiness and quantify it, leading to under or over reporting the feelings. Many of the indicators of GNH are difficult to quantify and capture in an index.

Significantly, then, developed countries which rank high on the basis of GDP/GNI do not necessarily rank high when evaluated on the multidimensional variables of GNH, raising doubts on GDP being a true measure of human well-being and welfare. This, of course, does not undermine the importance of the GDP indicator of growth which remains of prime significance in any evaluation of a country’s economic status and standing.

The point to be noted is that HDI and GNH provide a more comprehensive approach to looking at the concept of well-being and hence has today become a more acceptable measure of holistic growth and development. It is the content and cost of growth which needs to be considered carefully in the context of economic growth, prosperity and economic wellbeing.

The GDP will undoubtedly remain the crucial measure of growth but questions like pollution, inequality, climate change, environmental factors and the benefits and happiness that all this provides to the individuals is increasingly becoming relevant.  There is a growing awareness and caution against a one sided growth process today and its major fallouts. Therefore the content, quality and sustainability of the growth process need to be nurtured.

Sunayini Parchure

Dr. Sunayini Parchure is professor of Economics. She was a former Vice Principal of Symbiosis College and headed the Department of Economics. 

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