GDP and the smoke signals from Southeast Asia.

• Author: St. Clair, Matthew
• Position: Gross domestic product; economic indicators in relation to environmental degradation - Environmental Intelligence

In the past year, two major shocks to the Southeast Asian economy - the fires that blanketed Indonesia and Malaysia and the financial crisis of currency devaluation and falling stockprices - have forced many observers of the Asian boom to reassess what the region's rapid growth has really meant. "Growth" is conventionally measured by Gross Domestic Product (GDP), but the realization that that measure masks natural resource depletion and environmental degradation has led some economists and analysts in recent years to explore ways to revise or replace the GDP with a more comprehensive measure of economic well-being.

These reformers have made little headway with governments, however, and the campaign to reform our conception of what conventional growth really entails has foundered. But given the recent shocks, and the mounting evidence that the boom may not have been all it appeared to be, their views could now get more serious consideration. In this issue's cover story, for example, Janet Abramovitz notes that GDP does not reflect many of the economic values that are lost when a forest is cut or burned - only that which is added by the sale of products from the plantation that replaces it. And GDP critics such as University of Maryland economist Herman Daly and theologian John Cobb, Jr., point out that while GDP includes everything bought and sold in the market, it leaves out many factors that contribute to the quality of life. As a result, they argue, much of current GDP growth masks deepening societal problems. Vital neglected areas include all the nonmarket activities - important subsistence activities (such as collecting firewood or growing food) and the work done in the informal sector (where goods and services may be exchanged without money); home upkeep; volunteer work; the value of leisure time; and many...