Share this story!            

VIEW: Has Musharraf made Pakistanis happy? —Ahmad Faruqui

In 2002, only 10 percent of Pakistanis said they were satisfied with their lives as a whole — the lowest percentage in a survey of 80 countries. Only one out of five said they were very happy. These are depressing results. They are also at odds with the impression sought to be created by the government through its parade of improving macroeconomic indicators

Seeking to put a new face on its legitimacy, the military government has put its macroeconomic statistics on parade. Over the past two years, we are told, the GDP has grown at an annual rate of 5.8 percent, per capita income at 13.9 percent, and exports at 17 percent. National savings, as a percent of the GDP, have grown by 8.3 percentage points since 1998-99. Pakistan has attracted foreign direct investment of almost a billion dollars and foreign exchange reserves are at an all time high of $12.5 billion. Moreover, defence spending is coming down as a percent of the GDP. In other words, Pakistan is about to become an economic tiger.

Are things really that rosy? It is very difficult to say, unless a third party can be brought in to assess the veracity of the government’s figures, especially regarding defence spending.

The more fundamental question is whether or not macroeconomic indicators provide a useful measure of national well-being. The late Dr Mahbub ul Haq, working in conjunction with Nobel Laureate Amartya Sen, had developed the Human Development Index (HDI) to provide a better measure of well-being than GDP. It combines three factors into a single number: life expectancy, adult and primary literacy, and per capita GDP. In 2001, Pakistan had an HDI score of .499 — substantially better than 0.183 in 1960. However, it clearly had a long ways to go since about 125 countries were still ranked ahead of it.

Even the HDI has its limitations. Both Haq and Sen regarded it as a ‘vulgar’ measure intended to take people’s minds off GDP. The biggest weakness of HDI, in my opinion, is that it does not measure happiness — the core of an individual’s well-being. Economists, traditionally opposed to measurment of well-being, are slowly reconsidering their attitude. The change is, in large measure, on account of path-breaking work being conducted by Daniel Kahneman of Princeton University. Kahneman, a psychologist who was awarded the Nobel Prize in economics in 2002, asserts that national well-being can be measured by aggregating measures of individual well-being.

The Kahneman measure of national well-being is based on how people feel about each of several routine daily activities, such as socialising, praying, eating, sports, commuting, and shopping. This approach calls for two sets of surveys. One set would measure how much time individuals spent on various daily activities. A second set would measure how much satisfaction they derived from these activities by quantifying the ‘net affect’ of each activity. The net affect is defined as the average of three positive adjectives (enjoying, warm, happy) less the average of five negative adjectives (frustrated, depressed, angry, hassled, criticised).

The results are aggregated over a representative sample of individuals to derive an estimate of ‘per capita’ well-being. Multiplying it by the population, one obtains an estimate of national well-being. Kahneman argues that public policy should aim at maximising national well-being rather than GDP.

As of now, Kahneman’s measure has only been quantified for the US in an illustrative mode. However, a team of researchers led by Ronald Inglehart of the University of Michigan has quantified a related concept through a series of national surveys. Their findings are stored in a database called World Value Surveys (WVS, http://wvs.isr.umich.edu/). The work builds on surveys that were first carried out in Europe in 1981. A second wave of surveys, designed for global use, was completed in 1990-1991; a third wave was carried out in 1995-1996; and a fourth wave took place in 1999-2001. The most recent WVS assessment was released last year and includes data for 2002. It includes data on 81 countries. Puerto Rico and Mexico top the list, with scores above 4.0. The US ranks 15th, with a score of 3.47. Iran has a score of 0.93 and Turkey a score of 0.84.

Among South Asian countries, Bangladesh has a score of 0.54 and India a score of 0.03. Pakistan shows up with a value of negative 0.30. In most societies, those who describe themselves as happy/satisfied outnumber those who describe themselves as unhappy/dissatisfied and the score is a positive number. In the case of Pakistan, the opposite is true. While Bhutan was not ranked in the WVS study, it is perhaps the only country in the world that has built happiness into the core of its development strategy. Ever since the current king ascended the throne in 1972, Bhutan has focused on measuring and maximising Gross National Happiness.

One measure of its success is that all of Bhutan’s students who go on overseas scholarships return home, citing improvements in education, health care and the environment. Tashi Wangyal, who recently returned home with a master’s in philosophy from Cambridge, England, said that “the more I travelled and lived abroad, the more I learnt to appreciate what we had at home”.

People are puzzled by this finding, since Bhutan has a low per capita income. However, researchers have concluded that higher incomes are by no means a guarantor of greater happiness. In the case of Japan, the development of income and happiness diverge like open scissors. Between 1958 and 1991, income per capita in Japan rose by a factor of six, perhaps the most spectacular growth in affluence in any country since World War II. However, this tremendous rise in material well-being was not accompanied by an increase in average satisfaction with life, which stayed unchanged at 2.70 on a scale of 1 to 4 (very satisfied).

Ed Diener, a psychologist at the University of Illinois, reports similar results. He has analysed 150 studies on wealth and happiness in his report, Beyond Money: Toward an Economy of Well-Being and concluded that “[while] economic output has risen steeply over the past decades, there has been no rise in life satisfaction”.

Happiness is also influenced by the kind of political system people live in. This is borne out by analysis of data across 38 — mainly developed — nations at the beginning of the 1990s. Citizens in a democracy are likely to be happier because they can vote poor leaders out of office while those in a dictatorship cannot.

In 2002, only 10 percent of Pakistanis said they were satisfied with their lives as a whole — which was the lowest percentage in a survey of 80 countries. Only one out of five persons described themselves as “very happy”. These are depressing results. They are also at odds with the impression sought to be created by the government through its parade of improving macroeconomic indicators. The generals have apparently failed to improve Pakistan’s national well-being, which remains in critical condition.

Dr Ahmad Faruqui is an economist and author of Rethinking the National Security of Pakistan. He can be reached at faruqui@pacbell.net

Home | Editorial

Share this story!