The modern society has an extremely unique and unprecedented way of looking at humans. The governments and economists consider people as just a number on paper instead of a living entity whose life is interwoven with that of other numbers on the sheet i.e., other humans.
They typically use GDP, population and income segments to describe humans on a large scale. This method was good for the 20th century but not anymore.
Gross Domestic Product or GDP quantifies total economic output and is the most common tool used to measure human progress. It is a very useful tool to provide a macro-level perspective but to make the sole and the primary standard is the problem.
GDP came into being after the Great Depression, during the 1930s, as American Presidents used it to showcase economic progress under their term, however, it became a global standard to measure well-being when the USA established itself as the most powerful economy in the world. It was intended to measure just economic well-being and its proponents warned that it was a “dangerous and inaccurate” way to measure human well-being.
Over time, GDP per capita was developed as a more accurate method to measure individual well-being but still remained an inaccurate measure of well-being.
Human Development Index was later developed, which in conjunction with GDP and GDP per capita gives us a much more holistic and comprehensive view of our general well-being. However, HDI is still limited to life expectancy, education, and income.
It is ironic that HDI was developed by Mahbub-ul-Haq, a Pakistani economist, who belongs to a country whose biggest export industry is terrorism and is the hub of global terrorism.
As a result, we need to create a comprehensive index, much wider in its scope to make sure we include all aspects of human life, i.e., justice, access and quality of basic infrastructures such as water, electricity, home, nutrition, mental health, air quality, access to healthcare, education quality, entrepreneurial activity, spirituality, and many others.
I want to call it the ‘Aspirational Index’ that is primarily aimed at the re-developing countries in Asia and Africa (Yes, they are re-developing themselves after centuries of forced decline) as there are just too many indices for these countries to focus on.
The underlying principle here is: Measurement => Understanding => Improvement
The Aspirational Index will act as the single point of reference for these nations to streamline their efforts as well as tweak and gauge the success of their policy initiatives and provide them a direction for policy intervention.
A great example of this is how India nearly halved its Ease of Doing Business ranking, from 142 in 2014 to 77 in 2018, through directed efforts, guided by the index.
Our Prime Minister has for long been advocating an ‘Ease of Living’ Index, and Niti Aayog has been regularly coming up with indices — School Education Quality, Water Management Index, Health Outcomes, India Innovation Index — to encourage competition between different Indian states. Global bodies, such as the World Bank and the World Economic Forum, have also made strides in this direction by developing indices of their own — such as the Ease of Doing Business and the Global Competitiveness Index to measure well-being.
Most importantly, any such index has to be initiated by the countries, it intends to serve as it gives them a unique opportunity to set the terms and standards on which they will be graded upon by not only their own people but also the world. It will also ensure that indigenous knowledge and context is given its due importance. Although such an index will primarily be used by the African and Asian nations but can also be leveraged by the economically rich countries to make their prosperity more wholesome and evenly distributed.
India can and should lead an initiative like this. Any economist or graduate student looking for a thesis topic and is reading this, your welcome!
First published on Medium.
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