The GDP growth and rising incomes in Asia will bring prosperity to the region. To what extent doyou agree with this statement? môn Principles of Management | Trường Đại học Quốc tế, Đại học Quốc gia Thành phố Hồ Chí Minh

The GDP growth and rising incomes in Asia will bring prosperity to the region. To what extent do you agree with this statement? Nguyen Le Vy 31211022213 Academic English/AEn-47-10 7/04/2022 Gabriel Grace Adderley Intro:
This essay will show that Asia's performance in terms of economic development and GDP is
overstated. First, GDP is only a measure of economic output; it does not account for the real status of
the economy or the degradation of the nation's environment. Second, GDP does not take into
account the revenues of international firms created in a country and distributed to foreign investors.
As a result of uncontrollable growth, income disparity increases. Thirdly, GDP is not the only indicator
that can be used to address this problem. Finally, GDP figures are just a partial picture since they do
not take into account the full scope of the shadow economy.
However, one perspective is that GDP is a vital instrument on which governments may rely to offer
proper orientations for Asia's economic sector. On the other hand, as a response, the majority of the
government's concentration is on one side, generating environmental and living concerns that have a
significant impact on the country's human growth. Body:
GDP, or Gross Domestic Product, is the total market value of all final products and services produced
inside a nation over a certain period. (FERNANDO, 2022) . Although GDP is an accurate predictor of
an economy's size and GDP growth rate, it is not now regarded as the greatest measure of a
country's growth in Asia. Today, however, modern countries are coming to terms with the fact that
GDP, the conventional indicator of economic development, is only a measure of the size of a
country's economy and does not reflect a country's welfare. (Kapoor & Debroy, 2019). As a result, the
concentration on GDP growth each quarter causes many Asian governments to ignore critical
variables that income data do not convey. Reason 1:
Although economic expansion has boosted living standards throughout the world, today's Asian
countries have lost sight of the reality that the traditional indicator of economic growth, only 1
measures the size of a country's GDP and does not reflect a country's prosperity.
A country's economy is made up of natural assets, which include all of the extremely valuable but
non-market ecosystem resources that those assets provide. (Costanza, 2014). These natural
resources are projected to contribute much more to human pleasure than the entire global GDP
combined. As a result, environmental deterioration is a significant external issue that GDP measures
do not account for. GDP does not compensate for the amount to which positive or negative impacts
are created during the production and development processes. The manufacturing of more products
will increase the economy's GDP regardless of the environmental damage produced.(Kapoor & Debroy, 2019).
China is the world's fastest-expanding economy, with a GDP value that accounts for 13.04 per cent of
the global economy. (World Bank, n.d.). Even though its environmental issues are among the most
significant of any big country, most are becoming worse. China is dealing with a slew of issues,
including air pollution, biodiversity loss, land, freshwater, and seas. Pollution and resource
overexploitation are depleting freshwater aquatic resources and degrading the ecosystem. Over the
last two decades, the yearly cost of pollution and environmental degradation has fluctuated from 7%
to 20% of GDP. Aside from significant economic losses, pollution and resource rivalry have resulted in
several social conflicts in China.(Liu & Diamond, 2005). Reason 2:
Secondly, GDP does not account for the money generated by foreign firms in Asian nations. The study
of income inequality and income disparity is based on the distribution of income by demographic
segment. (PICARDO, 2021). As a result, GDP cannot govern the distribution of revenue among
multinational firms and corporations - particularly the Asian market, which is highly invested in by
nations all over the world. With growing levels of inequality in both rich and developing countries,
this is becoming more significant in today's society.
Furthermore, GDP cannot discriminate between an unequal society and an egalitarian one when
their economic sizes are comparable. Rising inequality has the potential to undermine the poverty-
alleviating impact of economic expansion while also weakening the foundation of growth. (Kopp,
2021) . As growing inequality leads to increased societal dissatisfaction and division, officials must
consider these concerns when judging a country's success. Reason 3:
Thirdly, job disruptions, poorer productivity, and slower economic growth are all consequences of
poor health. GDP truly captures the most important aspect of human pleasure. However, health, as a 2
vital aspect of life, is a key role in enhancing one's well-being and income.
Thus, improvements in health will not only immediately boost welfare, but may also lead to better
wages and improved future well-being in a virtuous cycle.
For instance, whereas the United States' GDP per capita is around 15% more than that of the
Netherlands, American workers work 26% longer hours than Dutch employees. However, according
to the OECD Better Life Index rating, the United States scores towards the bottom of this criterion,
whereas the Netherlands ranks first.("OECD better life index," n.d.). Reason 4:
GDP is based on official reports, therefore it excludes the extent of the shadow economy, which
might be large in some countries. Because GDP is a measure of income, informal companies and tax
evasion are not included in the country's average GDP. One issue that persists throughout Asia is the
black market, informal business, cash payments, and tax evasion, all of which occur on a daily basis.
(Tziamalis, 2018). The informal sector is important in emerging Asian countries because it provides
work for the poorest populations, but the government suffers as a result. It also has a negative
impact on growth and GDP since shadow enterprises are unable to obtain legitimate bank loans. Counterargument:
Although GDP is not a perfect predictor of a country's wealth, it is the most significant and carefully
followed economic measure by economists and investors. GDP is the total monetary worth of all
products and services generated by an economy over a certain time period. (FERNANDO, 2022) . The
government can forecast economic growth using this depiction. When GDP growth accelerates, this
may indicate that the economy is "overheating" and that the central bank is considering raising
interest rates. (PICARDO, 2021). When a country's GDP declines, central banks see the drop as a
signal that interest rates should be decreased. Response to counterargument:
Although the government can estimate future economic development, it cannot predict or avoid
climate change or human life patterns. If the government does not appropriately calculate, a lot can
happen, including social and environmental implications. Climate change is accelerating as a result of
overexploitation. Companies must deal with the reality of resource depletion. Wealth inequality is
increasing, the world is getting more divided, and life expectancy in developed nations is declining.
Economic growth will just be another instrument to lead an economy in the direction society
chooses, rather than math to evaluate that prosperity, in an economy where prosperity is at its 3
centre. (Kapoor & Debroy, 2019).
Instead of relying solely on GDP as the primary indicator of a country, the government should pay
greater attention to social welfare concerns and the living environment in order to assess the
happiness and prosperity of the country. Conclusion
In conclusion, based on the evidence presented, this article concludes that governments should not
place too much emphasis on GDP in order to judge a country's overall progress in Asia. GDP does not
account for the real status of the economy or the deterioration of a country's environment.
Furthermore, due to non-specification, a country's GDP numbers are not always exact. Finally, GDP
cannot capture Asia's increasing grey economy. While the counter-argument is that GDP is the key
instrument for investors and governments to foresee and prepare for the future economy, there is a
considerable danger that they will place too much emphasis on GDP and disregard environmental and social aspects. References
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