How and what to measure beyond GDP?
By Professor Dato Dr Ahmad Ibrahim
Gross Domestic Product (GDP) is an insufficient compass for navigating the complexities of the 21st century. GDP tells us what we produce, but not what we value. For Malaysia, the creation of a national “Beyond GDP” framework is a strategic necessity. However, the process of building this framework must be as transformative as the destination it seeks. The good news is that Malaysia does not start from scratch. The Department of Statistics Malaysia (DoSM) already compiles alternative indicators like the Malaysia Human Development Index and the Malaysia Happiness Index. The Malaysia CSO-SDG Alliance (MCSA) has been diligently pushing this agenda, winning endorsement from the National SDG Council.
The UN’s High-Level Expert Group, HLEG, is grappling with a fundamental dilemma: should we pursue a single composite index or a multi-faceted dashboard? A composite index offers political simplicity—a single number to benchmark and boast about—but risks masking deep inequalities. A dashboard offers nuance but can be ignored by policymakers who crave a headline. Malaysia should opt for both. We should develop a robust composite index—a true measure of inclusive wealth—that accounts for produced, human, and natural capital- A powerful, singular metric to track over time.
However, this number must be supported by a statutory dashboard of key indicators that is published alongside every GDP announcement. As proposed by civil society, every time the government celebrates GDP growth, it must also present the data on income inequality, and environmental quality indices. Top-down metrics, dictated solely from Putrajaya, will fail. They will miss the nuances of lived reality. While Malaysia excels in national averages for things like clean water, states like Kelantan struggle with access, and the wealth of Kuala Lumpur does not automatically translate to high social performance. Therefore, the framework must be built from the ground up. This means institutionalising the collection and use of citizen-generated data (CGD). Civil society organisations can be sensors on the ground. By partnering with DoSM to build their capacity for data collection, we can capture the granular data on vulnerable and marginalised communities.
The framework must be sensitive to different demographics. The concerns of a young person in the gig economy—job security, mental health, digital connectivity—differ from those of an ageing farmer concerned about water security and fair prices for their crop. Young people must be co-creators of these metrics, not afterthoughts. Their priorities, such as “planetary boundaries,” must be reflected in the national framework. A framework that sits on a shelf is worthless. To have teeth, Beyond GDP must be embedded in the machinery of government. This means two concrete steps. First, it must be integrated into the national budgeting process. We should follow the lead of New Zealand and Canada, who use well-being frameworks to allocate resources. Imagine a budget circular that requires every ministry to justify its expenditure not just on economic return, but on its contribution to improving mental health, reducing carbon emissions, or enhancing social mobility. This would force a whole-of-government approach to well-being.
Second, it must be localised. The 13th Malaysia Plan and subsequent plans must set targets not just for national GDP, but for state-level SDG performance. The data from the SDG for Malaysian States dashboard provides a perfect baseline to hold state governments accountable for improving the lives of their citizens in a holistic manner. Past Malaysia Plans have been plagued by implementation gaps, wastage, and a lack of transparent performance data. To prevent the Beyond GDP framework from suffering the same fate, its governance must be different.
We need an independent national commission on well-being and sustainability, comprising not just government statisticians, but also economists, sociologists, environmentalists, and civil society leaders. This body should be responsible for overseeing the data collection, verifying the metrics, and publishing an annual “State of the Nation” report that goes beyond the economic report card provided by Bank Negara and the IMF. This independent verification is crucial for building public trust and ensuring that the framework is not manipulated for political convenience.
The global momentum for Beyond GDP is irreversible. The UN is set to release its high-level expert group’s final report soon, triggering an intergovernmental process. Malaysia has a window of opportunity to be a leader in this space, not a follower. By setting up a national expert group that is genuinely inclusive, we can design a framework that reflects our unique multi-ethnic, multi-ecological society. A framework that values the health of our rainforests as much as the health of our stock market. A framework that measures the dignity of work and the strength of our communities. The goal is not to abandon growth, but to redefine it.
The author is affiliated with the Tan Sri Omar Centre for STI Policy Studies at UCSI University and is an Adjunct Professor at the Ungku Aziz Centre for Development Studies, Universiti Malaya. He can be reached at ahmadibrahim@ucsiuniversity.edu.my.