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Forbes India: Cheering up the GDP

Let’s face it. Gross Domestic Product (GDP) is the most accepted measure of national economies, but hardly an accurate one. It leaves out so many variables that it shows many countries to be richer or poorer than they really are.

GDP ignores the depreciation of capital, be it disappearing forests or ageing labourers, says Romina Boarini, an economist at the Organisation for Economic Co-operation and Development (OECD). And GDP nonsensically goes up after a natural catastrophe. When an epidemic spreads and people spend on medicine, it goes up again.

Bhutan shows the way

At least one country has known the value of happiness all along. Bhutan has been measuring its Gross Happiness Product as its standard of living since 1972. It seems to have worked somewhat. Bhutan was ranked the happiest country in Asia and the eighth-happiest in the world by a University of Leicester survey in 2006.

Bhutan has a Gross National Happiness Commission and in 2008, the government found that 68 percent of Bhutanese classed themselves as being happy. Its first democratic elections were held last year. Yet the Bhutanese economy remains one of the least developed. You decide.