On measures of development, GDP, and the World Happiness Report

The UAE has, for the sixth consecutive year, kept its title as the happiest Arab nation. It holds the twenty-first spot in the world ranking, and has moved a spot up from the World Happiness Report since last year. In the midst of a pandemic and rising concerns about the mental and physical health of nations; we are left with one question: what is the UAE doing right?

            Although GDP might seem like the obvious answer to how the UAE is maintaining these standards, this does not happen to be the case. The GDP*, or gross domestic product, is the total amount of goods and services a country produces within its borders in a given year. It is often used as a measure of how well each country has developed; however, it has been critiqued by many for its simplicity and lack of inclusion to other factors that measure how well-off a nation is. The United Arab Emirates may top the twenty-first on the World Happiness Report, yet, according to Investopedia (Silver, 2020), its GDP ranking falls slightly below that of its happiness. It is not alone in this dilemma. Even the United States, if we look at the period between 1946 and 1970, we’d notice an increase in GDP; however, this increase in GDP was not accompanied by an equal or even similar increase in well being (Easterlin, 1974)**. Furthermore, although many countries with high GDP also coincide to high happiness rankings, it is not always the case. Although GDP is a good place to start, it is obviously not the only indicator into a nation’s overall well-being.

            Happiness is indicated through many things, according to the World Happiness Report (2020). Actions to achieve long term sustainability, good health, good governance, and high levels of trust and connectedness are amongst the most important factors that lead to higher overall life ratings. As published on the government documents, the UAE has committed to cutting the economy’s dependence on hydrocarbons, has published the Dubai Integrated Energy Strategy 2030 (to help and further elaborate on their plan towards decarbonization), and aims to increase the contribution of clean energy to fifty percent by 2050 as well as steps towards reducing carbon footprint and desalination projects. In relation to governance, the Annual Index of Economic Freedom ranked it the 18theconomically free nation in the world and the first in the Middle East and North Africa (MENA) region, due to its welcoming of expats, annual trade surplus, labor freedom, and other important factors. Apparently, the UAE is doing something right by caring about its citizens wellbeing and actively investing in these measures to maintain sustainability and competition. While, as with any country, there are still other measures to improve upon, when it comes to happiness rankings the UAE is a great place to learn from about the steps we need to take to improve. 

            We are only discussing the UAE’s positive actions in order to discern what it is doing right. Many economists have argued that happiness should be studied at a deeper level in governmental organizations, and amongst the Arab world with its focus on increasing happiness statistics across the nation, the UAE seems to be leading the way. If engrossing oneself in wealth and products does not guarantee national wellbeing, then perhaps the movement should begin towards finding other measures to track the development of nations and selves. Perhaps, moving further after this pandemic is over, nations should begin to focus less on producing as much as possible and more on building sustainable cities, investing in education, and keeping citizens healthier, more connected, and, overall, happier. 

Notes for further understanding:

*Compare the GDP to the GNI, or, the gross national income, which is the total amount of income received by all the country’s people – whether or not they reside within its borders. Other measures of development include the gross national product (GNP) – the total amount of goods and services a country’s people produce, whether or not within its borders; GDP and GNP per capita, to find the average expected income for individuals based on country, and many other forms that do not just look on the country’s production (most importantly the infant mortality rate, the literacy rate, and life expectancy). 

** Named after Richard Easterlin, an economist, this is known as the Easterlin paradox and has been discussed recently in an article by the Economist in 2019. 

 Citations and sources for further reading:

Boyce, Christopher, and University of Stirling. “Why We Need to Choose Happiness over Economics.” World Economic Forum, www.weforum.org/agenda/2019/06/happiness-may-be-a-choice-except-that-it-s-constrained-by-vested-economic-interests.

“Economic Growth Does Not Guarantee Rising Happiness.” The Economist, The Economist Newspaper, www.economist.com/graphic-detail/2019/03/21/economic-growth-does-not-guarantee-rising-happiness.

Efforts towards Sustainability - The Official Portal of the UAE Government, u.ae/en/information-and-services/environment-and-energy/environmental-protection/efforts-towards-sustainability.

Fox, Justin. “The Economics of Well-Being.” Harvard Business Review, 8 Oct. 2014, hbr.org/2012/01/the-economics-of-well-being.

Graham, Carol. “Happy Talk: The Economics of Happiness.” Brookings, Brookings, 28 July 2016, www.brookings.edu/articles/happy-talk-the-economics-of-happiness/.

Guo, Jeff, and The Washington Post. “The Relationship between GDP and Life Expectancy Isn't as Simple as You Might Think.” World Economic Forum, www.weforum.org/agenda/2016/10/the-relationship-between-gdp-and-life-expectancy-isnt-as-simple-as-you-might-think.

Happiness - The Official Portal of the UAE Government, u.ae/en/about-the-uae/the-uae-government/government-of-future/happiness.

Kesebir, Selin. “When Economic Growth Doesn't Make Countries Happier.” Harvard Business Review, 25 Apr. 2016, hbr.org/2016/04/when-economic-growth-doesnt-make-countries-happier.

Khalife, Leyal. “Here's How Arab Countries Rank in Terms of 'Happiness'.” StepFeed, 21 Mar. 2019, stepfeed.com/here-s-how-arab-countries-rank-in-terms-of-happiness-1312.

Robbins, John, et al. “The Economics of Happiness.” Greater Good, greatergood.berkeley.edu/article/item/the_economics_of_happiness.

Silver, Caleb. “The Top 20 Economies in the World.” Investopedia, Investopedia, 18 Mar. 2020, www.investopedia.com/insights/worlds-top-economies/.

Smith, Lisa. “Does High GDP Mean Economic Prosperity?” Investopedia, Investopedia, 29 Jan. 2020, www.investopedia.com/articles/economics/08/genuine-progress-indicator-gpi.asp.

“United Arab Emirates.” United Arab Emirates Economy: Population, GDP, Inflation, Business, Trade, FDI, Corruption, www.heritage.org/index/country/unitedarabemirates.

“United Arab Emirates Ranks Among the World's Best Countries.” U.S. News & World Report, U.S. News & World Report, www.usnews.com/news/best-countries/united-arab-emirates#country-additional-rankings.

World Happiness Report. Vol. 8, Sustainable Development Solutions Network, 2020.