Within the current norms of developmental measurements, particularly economic development, a number of indicators are used. They are mainly GDP/GNP, Foreign Currency Reserve (FCR) and Foreign Direct Investment (FDI). However, postulates in economics are always not holy. Moreover, it cannot always be asserted that national economic principles are straight forward. Cunningly playing and tempering within the economic postulates may confirm that national economics and national development are moving towards right direction, however reality may remain far away. In such situation, we must need to understand that in order to reach in a mid-income country status, if legislators in Bangladesh play cunningly with the postulates of national economics, we may have a positive results, but this will never confirm the desired national development. It will rather bring endanger.
Increasing growth of GDP/GNP is one of the parameters that shows economic development of a nation is progressing towards right direction however this tenet is not always true in a number of atmospheres. If GDP/GNP of a particular nation is increased as a supportive player in cost of increasing GDP / GNP of other competitive nations, this kind of increase of GDP/GNP will never benefit the nation. It will rather hamper the life of mass people by increasing the expenses required for their daily life sincepeople live in a global villagethese days.Drastic increase of GDP/GNP through a little proportion of people is more harmful than even to a slower decrease of GDP/GNP which draws a balance between every cluster of population of the nation. Witha higher GDP/GNP,nation may experience a harmfuleconomics if a high level of income differences exist amongst different clusters of population. Therefore a simple higher growth of GDP/GNP is not a medicine to development.
These days, many economic and policy think-tanks advocate for using a different method to calculate the income of the people of a corrupted country because they claim that salary or legal income is not the only one source of income for many citizens. Thus, it is advocated to count all the expenses with the addition of the savings as income. Bangladesh has lately started following this method for income calculation because there are many invisible incomes existing within the country.
Each of the countries constantly invests for the development especially in infra-structure. This is seen as a continuous process of development. Two methods are used to calculate the investment on infra-structure. One is known as internal, while the other is known as external. With the process of internal, comparison is made amongst current year with past and future years. An increasing investment on present year compared to the past years is seen as good symbol. However, this simple increase is not enough to be satisfied for the global development competition. In the era of globalization, every country needs to invest higher for infra-structure based on demography and geography compared to the competitors (competitive nations). Therefore an increasing internal investment for infra-structure compared to earlier year is not an accurate testimonial for development. Developing countries need more investment for infra-structure compared to developed counterparts if they want to stand on the game since developed countries are already in advantaged position. An increasing internal investment compared to earlier years is not enough unless the investment is higher compared to the competing nations based on the demography and geography. Increase of FCR at the cost of development is not a good symbol of development.
Calculation of all expenses of an individual with an adding of his/her savings as an income will certainly show that income of an individual in any corrupted country has increased compared to the legal income. In addition to this, if a nation increases its investment for infra-structure more than earlier years but less than other competitive nations, the FCR will be higher. This may help the country to gain the status of mid-income country but the danger is very serious.
As we understand that the amount of rent paid to live in a slum is more expensive compared to a rent paid for a luxurious house in an elite area; if the calculation is made based on utility, services and facilities received in two places. Playing with the economic postulates cunningly to become a mid-income country may make the whole country as 'slumnation' compared to the competitive nations. As such, if we calculate whole wealth of our nation which will be very higher internally but when we will compare these properties with those of other competitive nations, we will definitely see that our pricing of national wealth is fake compared to the competitors. The competitors might have more wealth than ours but their solid price is less than ours. This means that we have much hidden money which has increased the artificial and fake price of our wealth.
The writer is Professor of Public Policy and Economics, University of Malaya, Malaysia.
Email: gazi.alam@um.edu.my
A dev phenomenon or a trap to economics of utility
Gazi Mahabubul Alam | Published: December 20, 2014 00:00:00 | Updated: November 30, 2024 06:01:00
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