As the world seeks to transition towards a greener economic model guided by the principles laid out by the Sustainable Development Goals (SDGs), an opportunity has presented itself for governments to shift its focus away from a financial bottom-line to the intrinsic welfare of its communities. While Gross Domestic Product (GDP) has often been the yardstick by which nations visualize their progress, sustainable development has led many to question its place as the metric of choice for determining how a country is doing. The SDGs have forced nations to consider economic development as more than just GDP.
Where GDP measures the power of a country’s economic productivity, it missed out on several other aspects that are integral to it such as opportunities for education, quality of infrastructure, and access to health services. Of course, an increase in GDP would see a corresponding increase in budgeting or investment into these social benefits - but what if we shifted the focus away from using the economy to build up the community, and have the community build up the economy?
There are 17 core Sustainable Development Goals, ranging from quality education to reduced inequalities and no poverty, each with their own subset of objectives. Aimed at improving quality of life through sustainable means, the SDGs paint a picture of development that takes into account all aspects of a country’s socio-economic setting. Seeking to empower communities and improve the wellbeing of citizens takes center-stage under an economic model focused on the SDGs. Ensuring a population has access to the best services and enhancing quality of life creates a healthier, inclusive and happier community.
In turn, by ameliorating societal conditions it is expected to lead to an even stronger economic output. An Organisation for Economic Cooperation and Development (OECD) report from 2018 delved into the benefits of incorporating sustainability and community-building within policy and economic development. In its analysis, the report noted that using wellbeing and happiness as indicators would help set better priorities for policy-makers. To different extents several countries such as France, Ecuador and Australia took these factors into account in early policy-making phases as a way of pre-empting how certain developments might affect local populations.
Looking past GDP into the more complex systems that create communities and identifying their needs and wants creates a more comprehensive overview of how and where development should be carried out. This shift in focus has slowly begun to be integrated at the highest levels of governance. In 2019, New Zealand announced it was replacing GDP-based budgeting with a Happiness and Wellbeing Index-based approach. The government explained that all new spending would fall into one of five priorities: reducing child poverty, improving mental health, addressing inequality, building digital infrastructure, and transitioning to a low-carbon economy. The South-Pacific nation is currently the only one to put happiness and wellbeing in such a prominent position in decision-making - however, they are likely only the tip of the arrow.
In its conclusion, the OECD document pointed out how the past decade has seen a slow but steady shift towards sustainable, community-based governance. As the climate crisis increases its destructive effect on the global environment, it has led new ways of assessing the impact of policies in terms of process and outcomes. The economic bottom-line is no longer the decision-driving metric. From the environment to social causes, the goal posts are shifting away from economics-based governance. Innovation and sustainability are defining how countries progress financially. Bolstered by a global push towards using the SDGs as a decision-making framework, it is only a matter of time before happiness and wellbeing supplant GDP as the go-to indicator for economic prosperity.
In turn, this newfound economic inclusion could go a long way in ensuring the implementation of the SGDs globally. This would create the positive feedback loop that was envisioned when the Sustainable Development Goals were announced. Nations continually seeking to improve its infrastructure, creating opportunities for community enrichment, and developing in a way that benefits society, the economy, and the environment without sacrificing one for the other. In 1934, Nobel Prize-winning economist Simon Kuznets, who designed the modern GDP was quoted as saying “The welfare of a nation can scarcely be inferred from a measurement of national income.” In 2021, there is a real chance that the welfare of a nation will start to be inferred from its happiness and adherence to the SDGs.
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