JAMAICA, understandably, has a fixation on economic growth. Our governments have tended to measure their success by whether growth was achieved or which of them produced the most growth.

Ironically, whether there is economic growth in a small, open, undiversified, developing economy such as Jamaica very often has little to do with what policies governments pursue. Economic growth is largely determined by and dependent on external factors such as the price of oil, the demand for bauxite, remittances from abroad, natural disasters, and the appetite of Americans for holidays in Negril and Montego Bay.

Still, bad policies can discourage economic growth by stultifying the ability of business to take advantage of favourable external circumstances if and when they exist, which is why we insist in this space that governments must be business-friendly.

Like everybody else in the world, Jamaicans believe that economic growth is always possible despite the planet’s finite resources. The few people who are concerned about the signs of economic misuse as increasingly evident in the worldwide degradation of the natural environment, global warming, global pandemics, malnutrition, inter alia are regarded as a lunatic fringe.

A good example would be those people who are accused of trying to block the economic growth which could emanate from the development of a logistics hub on the Goat Islands.

But economic growth is desirable because it is assumed that a larger pie means that all, if not the vast majority of Jamaicans, will be better off. This is not always the case, which is why we wonder about our method of measuring economic growth, which is traditionally based on the increase in Gross Domestic Product (GDP) computed annually.

GDP, with all the problems of collecting data and valuing in the environment of a depreciating exchange rate, is a serious challenge in a society like Jamaica. At best it is a guestimate. Leaving that aside, GDP is a very poor and incomplete tabulation of total economic activity because it only includes work and goods and services paid for by money.

For example, if one pays someone to perform some work, it may be captured in the GDP. But if one does the work oneself, it does not count. Much of the household work done by women, child rearing by grandmothers, and the sharing of food production has little or no value in the GDP.

Making the very generous assumption that GDP is a reasonable approximation, its increase does not mean that the majority of people will be better off. Jamaica has one of the most uneven distributions of income and ownership of wealth and assets in the entire world.

In this context, economic growth — meaning an increase in GDP — will translate into no improvement in the well-being of the majority of Jamaicans because the gains will be concentrated among a small group. What is very likely is that there has been growth in GDP but most Jamaicans, including the so-called middle class, experience a decline in their standard of living in real terms, especially when we are talking about microscopic growth of one per cent or less, which could just be a statistical error.

During this year’s Budget Debate we should be more concerned about the standard of living and the well-being of the vast majority of Jamaicans and less about whether or not there has been GDP growth or whether it is one or two per cent.