True Wealth of
Nations – redux
Why do we all aspire to be rich? Most
would say I guess is to be happy. Strange but true the richest nation is US but
not the happiest! As per the recent surveys, Panama, Switzerland, Denmark and
even Bhutan have been ranked as the happiest nations in different surveys. One
can also say, why not transcend happiness and be in a state of satori, or transcend
beyond the duality of happiness and sadness into nirvana, but that is another
state of being and story.
So far the prime measure of a country’s development has been
GDP. As an indicator, it conceals more than it reveals. The world and the
countries today are no longer simple economic units which can safely be
expressed as a single number. Hence, over time GDP has become an inadequate
indicator of a country’s development status. Therefore, there is certainly an
imperative need for a multi dimensional composite index which can faithfully and
holistically mirror the various facets of the complex economic entities. Time
has come to add more dimensions for judging a nation’s wealth and well being.
It is certainly possible for two economies to have the same
GDPs, and similar per caput GDPs. This does not mean that these two countries
are equally better off. They could have disparate societies where one society
may have greater well being among its populace, whereas the other may be rife
with inequalities, violence and environmental issues. There could be so many
points of divergence which would make it difficult to pronounce which is
better, unless there is a systematic comparison of detailed similar attributes
with weights assigned after factor analyses. Hence there is an urgent need to
evolve a model which can arrive at some integrated index as to which country is
better off based upon some objectives of global better-ness emerging from an
integrated set of factors.
With a view to arriving at an integrated index to measure
the best country in the world, NGL is in the process of designing an integrated
composite index. The broad high level indicators of the model are:
- Financial
- Environmental
- Social
- Individual
1.
Financial:
a.
Average GDP
a.
GDP standard deviation
b.
Income Gini Index
c.
Unemployment %age
d.
Debt / GDP
e.
Fiscal deficit / GDP
2.
Environmental:
a.
Pollution
b.
Average temperature change
c.
Carbon emissions
d.
Flora decline over past 50 years
e.
Fauna decline over past 50 years
f.
Deforestation over 50 years
g.
Energy usage per head pa
h.
Cars
i.
ACs
j.
Natural disasters
3.
Social
a.
Health – medicine usage
b.
Mental health – reported cases
c.
Allopathic medicine usage per head pa
d.
Lifestyle diseases (BP, sugar) per 100,000.
e.
Murder rate
f.
Rape rate
g.
Prison popn per 100,000.
h.
Literacy rate
i.
Processed food
4.
Individual
a.
Happiness index
b.
Yoga rate
c.
Divorce rate
d.
Joint families
e.
Singles above 30 %age
The above is an outline of a multi parameter weighted rank
score model. Over a period of time appropriate weights can be arrived at
through factor analysis.
This purports to be only a humble start in creating a
holistic True Wealth of Nations model which can capture wealth in all its
dimensions. Wealth is not only about money. Wealth is also a summation of peace
of mind, happiness, good health, trust, love and so many virtues human beings
value. At the end we leave everything behind and go, as we have arrived. Money is
important up to a certain extent, but not the be all and end all. When the
great Alexander died at the age of 32, he had willed that he should be taken to
his last resting place in an open carriage with his hands on either side –
empty and facing up – signifying that even the great Alexander left penniless. His
soldiers were instructed to shower on the crowds on both sides all his jewels
and coins. Hence the true wealth or health
of nations cannot be based upon GDP figures alone. As the Beatles sang “Money can’t
buy me love”.
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