GDP not true measure of prosperity, focus must be on fair growth, says Abang Johari

Borneo Post

16 hours ago

Abang Johari arrives at the PSFTC 2025. – Photo by Mohd Faisal Ahmad
KUCHING (Aug 6): Gross Domestic Product (GDP) figures should not be viewed as the sole measure of a nation's prosperity, said Sarawak Premier Datuk Patinggi Tan Sri Abang Johari Tun Openg.
Speaking at the Public Sector Financial Transformation Conference (PSFTC) 2025 here today, he pointed out that while GDP growth is often used to gauge economic progress, it does not necessarily reflect the true quality of life or economic well-being of the people.
'GDP growth can reflect that a country is developing and achieving higher economic returns. But it doesn't really reflect what's happening on the ground.
'GDP does not necessarily give you the right picture. A country can appear prosperous, but its people may still struggle,' he said, citing Nobel Prize-winning economist Joseph Stiglitz, who has long argued that GDP is a limited and sometimes misleading measure of national well-being.
Abang Johari explained that GDP, which is calculated by dividing the total value of goods and services by the population, does not capture existing inequalities in society.
'There are certain sectors of the society that remain poor.
'Because of that, my view is that while we maintain and try to put good GDP numbers, we must also have a process to redistribute that growth fairly to our citizens,' he said.
He highlighted education as a key pillar of equitable development under the state's Post Covid-19 Development Strategy (PCDS) 2030.
'Against that background, we can uplift the quality of our people with the right educational background to add value to our resources.
'Thus, God willing, starting next year, we will give free tertiary education to all Sarawakians,' he said.
Addressing the audience of senior officials, department heads, and finance professionals, Abang Johari also outlined the importance of sound financial planning. He emphasised three core principles: consumption, investment, and savings.
'These three components must be the determining factors when you draw your budget.
'If we follow this principle, I believe that the state or the government will be on the right path,' he said.
Drawing comparisons to Nordic countries such as Norway, Finland, and Sweden, Abang Johari praised their disciplined and effective financial management.
He noted that although Norway discovered its oil and gas reserves later than Malaysia, it has successfully elevated the living standards of its people through careful resource management.
'In Sarawak, we have some income but we have to look into how we manage our income.
'That is why I set up our sovereign wealth fund and whatever we have, we don't spend it lavishly,' he said.
Abang Johari also stressed that public finances must ultimately benefit the people, especially through strategic redistribution efforts.
'We must make sure that when we redistribute, it must have an impact on the people.
'This is what I call a re-engagement exercise.' Abang Johari fair growth GDP