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Gross Domestic Product (GDP) oriented development
and Human Centered Development
By Dr Sisaliao SVENGSUKSA, geographer
Development has different forms which depend on the objectives or the goals of the project designers. I
understand that different forms of development have their positive outcomes which are based on who will
benefit from them. But what kind of benefits exactly will they offer? How much the society will benefit
from them? How much the economy will benefit from them? How much the environment will benefit
from them? This paper does not intend to criticize other forms of development. It seeks to persuade
project developers to consider that nothing is richer and worthier than humans.
Gross Domestic Product (GDP) oriented development
Society holds its perception that the wealth of one country in general takes gross domestic product (GDP)
as target for development. GDP is an indicator of all goods and services within one nation for a specific
period of time. GDP contains the total money value of every activity undertaken in one country including
that of foreigners but not those doing their businesses outside that nation. This concept entails that the
growth of GDP indicates the health of the country’s economy. Therefore, during recession or economic
crisis, concerned sectors usually ask questions: “How much will the GDP grow? How many percent?” It
looks like the future of one country rests solely on GDP.
Since the beginning of the 21st Century, many economists have criticized the use of only GDP to measure
the wealth of one country. Patrick Viveret, in 2002, published one book titled “Reconsidering wealth
(Reconsidérer la richesse)”. In response to this book, governments in some countries have set up a special
committee to conduct a study on the relationship between the strength of the economy and social
advancement. Mr. Patrick Viveret explained to us that this is a major change in social awareness. He
asserted that society currently wants to produce products that can be sold and purchased in the markets.
This kind of success has become an indicator of values and achievements.
GDP oriented development in fact has major drawbacks that can be summarized as follows:
1. Gross domestic product does not take into account home activities that does not offer returns in
the total dollar value. For example: routine family activity, the production activity for selfconsumption (gardening, repairs or maintenance of house or home equipment) and volunteering
social work. This source of wealth and services is not included in the calculation of GDP because
they do not come through money value chain. Therefore, it can be said that the official global
concept of wealth based upon assets tradable in the markets.
2. Gross domestic product comprises negative activity to make wealth as it has costs. For example:
road accidents, illness and natural disasters. The higher the road accidents, the more production
(repairs of vehicle and treatments of the injured persons) and the more GDP. The more patients,
the more medicines can be sold. In contrast, if people have good health, the number of patients,
the treatment and the selling of medicines will reduce. Therefore, GDP growth will decrease.
3. GDP also considers actual problems as wealth. For example: traffic jam contributes to a high
consumption of petrol and to air pollution. GDP will translate the high consumption of petrol as
wealth.
In addition, GDP does not take into account other important problems which contribute to the growth of
wealth. These problems have critical impact on the future of the planet, for example:
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The depletion of natural resources
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Impact of air pollution on the environment
These two issues highlight that the notion of wealth lies in the commercial and monetary world and the
world of consumerism.
To explore other notions, let’s take a look at the following stories:
Story 1:
A couple spends time at home after work. The husband catches fish in the pond and the wife collects
vegetables in their gardens. The husband helps his children do homework and/or plays traditional music
instrument for them before helping his wife prepare dinner. As usual, they watch TV/listen to the radio
during meals or after dinner. They then read a bed time story or recite their kid poems before going to
bed.
Meanwhile, a single man eats out in an expensive restaurant; then stops by a pub to meet his friends. He
goes home at midnight, has an accident on the way by hitting an electric pole. The motorbike is badly
damaged and requires heavy repairs. The man has a broken leg and is taken to a hospital by taxi and has
to stay in a hospital for 3 months.
The couple contributes very little to the growth of GDP (fish, vegetables, ingredients and the bedtime story book)
The single man contributes substantially to the growth of GDP because he is a consumer of food
in a restaurant, drinks in a pub, car repair shop, taxi, hospital and the electric pole factory.
Story 2:
A family who lives in a rural area owns a house, has three buffaloes, 3 fishing nets, a garden, one rice
field and a fruit farm.
A second family resides in a big city. The husband works as a laborer in a factory and the wife hires out
her labor in a construction company. They rent a house; buy rice and other food items contained in plastic
bags from the local market.
GDP growth contributed by the first family is less than that by the second family because the items for
production and consumption in the family can hardly be calculated in total money value. The second
family makes more obvious contribution to the growth of GDP because it contributes to the products of a
construction company, factory, rice shop, food shop and plastic bag factory which can be calculated in the
real money value.
Story 3:
A businessman signs a contract to sell rice to a foreign company. The contract is used as security for
business loans from a commercial bank. After receiving the loan, the man rents a rice field for rice
production, hires heavy machinery for field preparation, purchases rice seeds, fertilizers and insecticides,
hire villagers to plant the rice seedlings. The rice is almost ready to be harvested in October but a storm
reaches the area and destroys everything. The businessman commits suicide because of bankruptcy.
Despite this, GDP grows substantially because the bank has lent a big loan, the supplier of equipment has
sold machines, the rice company continues its production, farmers receive their wages and the funeral
company organizes a funeral for the businessman.
It can be therefore said that:
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GDP oriented development is meaningful in a society where there are activities of production of
objects quantitatively measurable in money value.
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It only recognizes real money value as the measurement for wealth.
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It denies non-production activity or intangible activity such as: leisure activities, reading time, TV
time or time spent for reading newspapers, time for physical exercise, coffee catch up,
sightseeing, meditation and other recreational activities.
The composition of GDP confuses wealth with happiness in life. At national level, it can be thought that
higher GDP per capita brings more gross happiness to the country’s population. In the case of the Lao
PDR, this school of thoughts is evidently wrong because according to the average GDP per capita, the
United Nations lists Laos in the group of the 25 least developed countries or ranks 201 worldwide (Atlas
Eco, 2008). However, the Global Peace Index, GPI, London has Laos 34th on the world list and 3rd in
ASEAN (Source: Vientiane Mai Newspaper, 14 June 2010).
Similarly, the notion of GDP oriented development gradually deprives people of happiness because
material possession is increasingly promoted. Misconceptions occur on the basis that it is believed that
material wealth increases happiness. In fact, factors constituting the real happiness of individuals
comprise: income to meet the demand for necessary things in life: health, education, occupation, political
and administrative participation, social connections, friendly environment, social dignity and pride, and
security in life and assets. Placing importance on GDP alone can widen social disparity because GDP is
based on the average figures which do not represent the actual distribution of domestic products to all
people.
The central rationale of GDP oriented development is: “how can the GDP average figures sustain their
continuous growth”? Given the fact that GDP and its growth rate are set as target for development,
attention is not paid to the variety of products such as materials and tools for household daily use and
food supplies; the focus is rather on the production of high value items tradable in the markets, including
weapons, other dangerous goods and luxury and flashy products.
This GDP oriented development concept leads to the loss of business ethics and morality, as the
development target is not the human being anymore, especially those disadvantaged people. Instead of
asking “How much can it bring in return?” we should ask “How many people will benefit from it?”
Human centered development
The objectives of development in general should be to enable people to achieve gross happiness, wellbeing, social pride and security in life and assets. Based on these objectives, human centered development
takes the human being as the center, or the target, for development. This approach allows people to
develop themselves, their future as well as the future of the nation and the human being. This makes them
ask themselves a question “Have I done anything today for the future of this planet?” The question
enables people to adhere, as their reminder, to the revolutionary motto that “the public (I am one of them)
creates history”. The nature of this development refers to “we reap what we sow” where we serve to offer
a better living condition for the underprivileged.
The wealth and poverty of the population in a nation do not depend on what nature has to offer but on
what humans do with it. A country with abundant natural resources also comprises people living in
poverty (as in the Republic of Congo). A country like Switzerland which is landlocked with steep hills,
high mountains, massive valleys, and a climate that does not support vegetation growth, is home to many
rich people. Singapore, where people are rich, has no land for agricultural production and no sufficient
volumes of fresh water for human consumption. Laos had lost its opportunity for development between
1707 and 1975 because of its own people. The nation has emerged and is developing since 1975 thanks to
the efforts of its people.
Human centered development is sustainable development. Its aim is to develop humans, by providing
humans access to the following 6 fundamental elements:
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Access to production tools (land and water sufficient for 11 months per year of production,
handicraft tools, tools for industry and services);
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Access to education services, particularly vocational training relevant to what they are doing;
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Access to health care (dispensaries, hospitals at different levels, pharmacies);
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Access to domestic and international markets;
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Access to financial services or funding opportunities (village saving funds, micro finance
institutions and other specific banks);
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Access to services available for the individual blooming
The ultimate goals of a development model that has the human being at its center are to ensure that:

People have professional skills and sufficient income to ensure satisfaction of the material needs
necessary for their daily well-being;

People can be responsible for themselves and for their families;

People have dignity in their community;

People have safety and security in life and property;

People have access to education and culture;

People are able to enjoy health benefits and sports;

People are able to participate in political and administrative processes;

People are conscious of the rule of law;

People are able to be part of the protection and beautification of the environment;

People are willing to join the process of solidarity and conciliation within the community;

People are able to protect public property and the global cultural heritage;

People have a clear vision of the future of the global human community and for our planet
EARTH