University of the East — Manila

2219 Recto Ave, Sampaloc, Manila, 1008 Metro Manila

College of Arts and Sciences
S.Y. 2023-2024

In compliance with the Preliminary Exam

Think Piece
APS_4102: International Political Economy

Ngayawan, Ronson B.
PS6A
GDP not a good measure of development

Development is described as "the enhancement of freedoms that allow people to lead lives that they
have reason to value" in the book Development as Freedom. Sen’s notion goes much beyond just
increasing per capita income since he thinks economists have placed an unwarranted focus on GDP as
the gold standard of prosperity. Sen contends that a nation is merely becoming richer if increases in
revenue cannot be matched by other elements that characterize a high level of living, then it is not
actually growing (Matheson, 2009). In Matheson’s understanding, growth, advancement, positive
change, or the introduction of economic, social, environmental, and demographic components are all
aspects of development. The goal of development is to raise the standard of living for the populace while
protecting the environment's resources and creating or expanding employment opportunities locally and
regionally. Development comprises a quality change aspect and the setting up of conditions for the
continuance of that change, and is observable and beneficial, though not always right away. Living
standards have increased globally as a result of economic growth. Modern economies, however, have
forgotten that the basic indicator of economic growth, the gross domestic product (GDP), just gauges the
size of a country's economy and does not reflect a country's welfare. However, policymakers and
economists frequently view GDP, or GDP per capita in some situations, as a comprehensive unit to
denote the growth of a nation, combining its financial stability and social prosperity. Since it does not
directly take into account of leisure, environmental quality, health and education levels, activities carried
out outside of the market, changes in income inequality, increases in variety, advances in technology, or
the potential either good or bad value that society may place on particular types of output, it is seen
only a rough indicator of the development of a particular country. To strengthen this argument, Killeala
states that a country's growth and wellbeing cannot be accurately assessed by its GDP. Due to the fact
that they don't entail interactions, many important goods, such as peace, environmental protection, or
family ties, are not included in GDP calculations (Killeala, 2020). In truth, GDP contributes to the quality
of our lives. GDP does not reflect the well-being of our young people, although countries with higher
GDPs can afford to provide their children with better healthcare. GDP does not reflect education quality,
but countries with higher GDPs may afford to have stronger educational institutions. GDP gives details on
current conditions but does not address the sustainability of development. Although most time is spent
on domestic production, GDP does not account for this time's worth. Residents can be unsatisfied even
while GDP is increasing because GDP is not an indicator of happiness. Additionally, the GDP does not
account for environmental aspects, reflect what people do outside of paid jobs, or even measure a
nation's current or prospective future human capital. Therefore, supplementary measures could be
helpful in providing an expanded view of a country's economy.

Quality of life as a measurement

Quality of life is a highly subjective measure of happiness that is an essential component of many
financial decisions. Factors that play a role in the quality of life vary according to personal preferences,
but they often include financial security, job satisfaction, family life, health, and safety (Kagan, 2022). The
term "quality of life" describes how someone feels about where they are in life at this moment.
Ambitions, desires, and issues are all included, as well as how they see their general well-being. A
person's quality of life is influenced by a variety of variables, including their level of work contentment,
financial status, and free time. Personal finance is connected to a number of aspects that affect quality of
life. Although having a steady income can be a good indicator of a good standard of life, analysts stress
the significance of striking a cautious balance between job and personal enjoyment. Individuals who
have to work a lot or several jobs frequently have fewer opportunities to enjoy their earnings through
encounters with loved ones, interests, and breaks. The quality of life might also be affected by other
workplace factors. For instance, certain employment may involve possible risks like chemicals or heavy
machinery, whilst others may need lengthy absences from home or changes in schedule due to the
seasons. Each person will need to weigh the hurdles against any potential rewards, such as increased
pay, travel possibilities, more time away from work, or satisfaction with their job. However, to achieve a
livable quality of life, Lombardi argues in his article that the economy of a country should grow to the
point that it becomes friendly to businesses and companies, as Income grows by expansion of businesses
and creation of employment opportunities. It places individuals in jobs, which earns them income and
enables them to improve their quality of life (Lombardi, n.d.). New businesses can start up, develop, and
grow when a supportive business atmosphere is created. These new businesses bring in clients, provide
jobs for locals, and increase the range of options available to citizens for anything from food and
equipment to transportation services and grooming. The quality of life can be improved by any business
that economic growth supports.

Quality of life in the Philippines

In the Philippines, people who are living in poverty occasionally lack access to basic essentials including
electricity, clean water, and sanitary facilities. Additionally, it is anticipated that they will have limited
access to resources like schooling and medical care, which are crucial to one's potential to escape
poverty. In many cases, a lack of education plays a significant role in a family's lack of stability (Thelwell,
2019). Basically, the majority of Filipino people struggle with poverty on a daily basis. Even while recent
years have seen a steady rise in social spending, many individuals still struggle to survive every day.
Living conditions are challenging due to poor state infrastructure, starvation, rapid population increase,
dirty water, and difficult access to education. A significant portion of the Filipino people is also
unaffected by the government's efforts to fight poverty. In the Philippines, those who have a larger
family are more likely to be poor. They need to earn more money in order to live in a country where
unemployment is widespread, there is a plenty of inflation, and there is not economic equality across
industries.

While a rise in administration size, expenses, or intervention has a detrimental effect on quality of life, it
is beneficial when the standard of living of the state, or the efficiency of its policies, stays at a given level.
It has been observed that when the financial system remains stable by the market system and stability is
ensured internally as well as externally, the standard of life is increased relative to when the state takes
an active role in creating goods for the public, or when the government's standard and scale are at a
certain ideal level. The extension of social programs is therefore unlikely to have the desired impact on
increasing the quality of one's life without a stable economy and society (Lee, 2021). It is challenging to
gather approval of needed improvements without trust in governments, markets, and institutions,
especially when short-term sacrifices are needed and potential long-term benefits may be less apparent.
Inefficient and ineffective service delivery, resource waste, graft and corruption, the absence of honesty
in the government, poor management, too much bureaucracy, useless restructuring and changes in
structure, and excessive centralization are just a few of the factors that have contributed to the decline
in public trust in government. For a great deal of people, poverty is an everyday issue. Even while social
spending has consistently increased in recent years, many individuals still struggle to survive every day. A
difficult way of life is caused by poorly available education, starvation, rapid population increase, filthy
water, and a lack of governmental infrastructure.
In addition, a large part of the Philippine population remains untouched by the state’s fight against
poverty. The economists have studied the problem and they have identified the following factors driving
high unemployment rates in the Philippines; overpopulation, poor education system, inadequate
vocational and technical training facilities despite TESDA, low direct foreign investments (therefore no
jobs are being created as the domestic labor market has still to recover from the devastation of the
pandemic), lack of decent employment opportunities, lack of relevant skills and competencies resulting
to job mismatch, geographic mismatch and issues on mobility, and this economic phenomenon that
economist call labor market frictions and rigidities. What exacerbates the problem is that investors don't
want to come because of corruption, harsh and extreme weather conditions, threats to peace and
security, the country's state of low technology and poor internet connectivity, and inadequate and poor
quality of infrastructures. The worst driving force is an archaic Labor Code which is vintage 1974 with too
much government interference and an anti-employment labor law framework. Small businesses are
being constantly harassed by multiple and duplicating inspections and investigations on workers to file
complaints.

Affordable public schools are often chronically underfunded, so many parents strive to send their
children to expensive but better-resourced private schools. College tuition can cost up to $6,600 a year,
far out of reach for millions of Filipinos. Many migrant workers spend decades working overseas to save
up for these fees. But there’s no guarantee that a degree can grant success and stability, as so many
parents hope. Many workers who go overseas tochase this generational dream had high school diplomas
and college degrees themselves, that were of little help in the job market. In a tragic twist, children
whose parents work overseas may actually do worse in school, even if that education is a major reason
their parents leave, experts say. With growing diaspora population, it is not surprising that we now have
more friends who have family members abroad, migrants or temporary workers. At some point, Filipinos
separated due to economic reasons wish to reconnect again. It’s either the one working overseas goes
home, starts a business and reunite with the family. Or decides to continue their overseas careers and
bring their families there. This could be the single most common answer if we run a poll. Opportunities
abroad could mean more available jobs, less discriminating recruitment process, better wage and
working conditions or a lower tax rates. This might be an indirect play to what’s going on in the
Philippines: contractualization, age discrimination, high withholding taxes and low minimum wage rate.
If there’s a better alternative, Filipinos are quick to take advantage. Sadly, this often means separating
from family. The Philippine government often gets the flak for various things such as corruption,
incompetence, mudslinging and other signs of an unstable management of a country in dire need of big
time revival and redemption from decades-long agony. There’s progress, but people are getting
impatient. Deciding to leave the country in favor of economically stable, accept aspiring immigrants and
provide a better road map for the future. The compensation that professionals receive is inconsequential
to the cost of earning their degrees. Thus, they have to go abroad where compensation is much higher
even if this means leaving their loved ones. The bottom line is our poor economy. No matter how the
government tries to picture our economy as stable and prosperous, the fact that Filipinos still prefer to
leave their homeland to live and work elsewhere is living testimony to the contrary.
Matheson, V. A. (2009, May 14). Development as freedom: Victor A. Matheson, Amartya Sen. FEE
Freeman Article. https://fee.org/articles/development-as-freedom/#:~:text=In%20his%20latest%20book
%2C%20Development,goes%20far%20beyond%20that%20of

Lombardi, L. (n.d.). What is quality of life? and how can economic development improve it?. Mid Atlantic
Business Expansion and Relocation Experts. https://www.thinkcurrituck.com/blog/what-is-quality-of-life-
how-can-economic-development-improve-it

Thelwell, K. (2019, August 14). Top 10 facts about living conditions in the Philippines -. The Borgen
Project. https://borgenproject.org/top-10-facts-about-living-conditions-in-the-philippines/

Lee, C. (2021, March 24). Effects of government characteristics on the quality of life - social indicators
research. SpringerLink. https://link.springer.com/article/10.1007/s11205-021-02675-x