Individual Essay Draft: Economic Growth & Prosperity
INDIVIDUAL ESSAY DRAFT
Topic 6: Economic Growth & Prosperity
Academic English Class 13
Nguyen Ngoc Bao Thy - 31221020927
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The GDP growth and rising incomes in Asia will bring prosperity to the region.
To what extent do you agree with this statement?
INTRODUCTION
This essay will prove that while the GDP growth and rising incomes in Asia contribut
e to the region's prosperity, they do so only in part. Firstly, one of the key elements of
prosperity measurements, well-being, is not sufficiently reflected by Asia's GDP grow
th and rising incomes. Secondly, economic growth might adversely affect the regio
n's ecosystem and natural resources. Finally, a strong point is made that increasing i
ncomes and GDP growth might indeed result in income disparities that have a detrim
ental effect on the advancement of Asian society. The counterargument suggests tha
t GDP has certainly contributed to progress and development in the Asian region. Ho
wever, given the response is that although GDP and income growth increase the gen
eral economic situation of the region, they do not accurately capture the full scope of
economic progress - the informal sector.
DEFINITIONS AND BACKGROUND
BODY
Firstly, Asia’s GDP expansion and rising incomes do not sufficiently reflect on
e of the critical components of prosperity measurements - well-being. A study c
onducted by The Legatum Institute Foundation pointed out that prosperity is fostered
by not only wealth but also human satisfaction. Moreover, it is challenging for a natio
n to achieve sustainable development goals if its citizens' basic needs and standard
of living are not met (Budsaratragoon & Jitmaneeroj, 2021). India, for instance,
ranked 107 out of 121 on the GHI and was labeled as possessing a "serious" level of
hunger, indicating a high proportion of its population suffers from hunger and
malnutrition (Asian Development Bank, 2022), despite the country's economy
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Individual Essay Draft: Economic Growth & Prosperity
expanding at an average annual rate of 7.5% over the past ten years (Global Hunger
Index, 2022). Thus, the case of India lends credence to the claim that increasing GD
P and incomes alone do not always signify a country's well-being particularly (Layard,
2005) and prosperity generally, especially when basic needs and social welfare are
not fully addressed.
Secondly, economic growth can exacerbate ecosystem destabilization and nat
ural resource depletion (Paolo & Defra, 2010), leading to a range of negative en
vironmental consequences. As Giorgos Kallis claims in Degrowth, people cause m
ore environmental damage by producing and consuming goods more quickly. In othe
r words, explosive growth inevitably leads to increased use of natural resources and
pollution emissions, which puts more strain on the environment (Munasinghe, 1999).
This is illustrated by the hydropower project constructed in the Vietnamese Mekong
River basin, with expected economic gains of up to 100 billion dollars by 2040 (MRC
Council, 2019). Along with the economic benefits, the hydropower development in th
e Mekong River has already resulted in significant environmental detrimental conseq
uences, such as habitat destruction, fisheries depletion, and water pollution (Soukha
phon et al., 2021), which adversely affect the living conditions and livelihoods of milli
ons of individuals depending on the river for their food, water, and income.
Thirdly, rising incomes and GDP can lead to income inequalities that negativel
y impact the development of Asian society. The increase in income inequality is
mainly because high-income earners are more likely to benefit from economic growt
h and globalization. Contrarily, low-income earners frequently fall behind because th
ey lack access to resources and opportunities (Cingano, 2014).
This could be shown through the example of China, whose economic development o
ver the recent years has been preceded by a dramatic rise in income inequality.. Chi
na's rural households had an average annual per capita disposable income of about
20,133 yuan in 2022, or about 40% of what urban households made (Statista, 2022).
Due to this disparity, a large number of people who reside in rural areas lack access
to basic services, including education, healthcare, and social welfare, which expands
inequality. As a result, this extreme and ongoing income inequality has the potential
to significantly hamper growth, cause catastrophes, and lower demand across the
country (IMF, 2015).
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Individual Essay Draft: Economic Growth & Prosperity
An argument against this is that economic growth has been a driving force for
progress and development in the Asian region, leading to an improvement in t
he standard of living, technological advancements, and infrastructure develop
ment. As high GDP makes the market vibrant and the flow of goods and services to f
oreign countries relatively simple (Porter, 2001), it leads to a rise in investment, both
domestic and foreign. As such, it creates jobs, promotes innovation, and contributes
to better public services, including transportation, healthcare, education, and security.
A recent World Bank 2022’s report affirms that economic growth has increased the
GDP per capita of individuals living in extreme poverty in developing countries. For in
stance, Vietnam, Cambodia, and Bangladesh have seen significant decreases in pov
erty rates due to expanding access to resources, jobs, and public services.
However, it is critical to acknowledge that GDP and income growth do not enc
apsulate the informal economy. According to a report by the International Labour
Organization, over 60 percent of the world's employed population operates in the info
rmal sector, characterized by a lack of legal and social protections. Moreover, it is a
significant issue that 68 percent of the employed population in Asia – Pacific is in the
informal economy (ILO, 2018). Therefore, even though the GDP growth and rising in
comes in Asia have boosted the living standards of the Asian population, they still oft
en lack access to essential social services such as healthcare, education, and social
welfare in the informal sector. As a result, although the formal sector has become mo
re prosperous, the informal economy remains impoverished, creating significant ineq
uality that hampers progress in the economy. Given that the informal sector is gener
ally excluded from the calculations used to measure economic growth, it is essential
to ensure that social welfare measures and appropriate social care are in place for th
is sector. Incorporating measures that seek to improve the welfare of individuals in th
e informal sector through targeted social policies, including the provision of effective
social protection measures, skill development, and economic reintegration strategies,
can create a more inclusive economy that fosters growth and progress.
CONCLUSION
In conclusion, GDP growth and rising incomes do not fully reflect the prosperity of As
ia. They have been important drivers of development in the region, but they have limi
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Individual Essay Draft: Economic Growth & Prosperity
tations as measures of overall progress. The failure to account for the full range of so
cial, environmental, and economic factors that contribute to prosperity can result in la
rge income disparities, ecological harm, and neglect of the informal economy. By ad
dressing the limitations of GDP and income growth, Asia can achieve sustainable an
d inclusive economic growth that benefits everyone and leads to lasting prosperity.
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