Economy
Mexican president to present GDP alternative index to measure country's "wellbeing"
The index will also cover happiness and reveal Mexico's inequality. "It will be my contribution to the return to the new normal after the pandemic," he said.

Since the middle of last year, President Andrés Manuel López Obrador's economic rhetoric was clear: growth was no longer the most important thing, but development and social welfare. Now he goes further and proposes the creation of an alternative index to GDP.

At Thursday's morning press conference, the president revealed that he is working on an index that can measure well-being, degrees of social inequality and happiness, going beyond the economic growth measured by the GDP.

The president said that the economy, measured under "neoliberal" parameters, does not recognize other variables. That wealth remains concentrated in a few pockets: "Growth is of no use to us if it is not accompanied by more equality. It is not growth for the sake of growth. That is why democracy must be added to the formula for growth".

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According to his vision, there must be growth with honesty, well-being, culture and happiness. "That used to be called development. The term growth was not widely used in the economy. The term development was used more frequently, because it had a broader connotation, it had to do with welfare, health, education. Not just GDP," he added.

The president explained that he will summon mathematicians, economists, sociologists, anthropologists, psychologists, and other specialists, while he will pose the starting hypothesis. "It is going to be our contribution thinking about the new normality [after the pandemic], because we cannot continue thinking in the same way. And perhaps we will also contribute to having other parameters in the world with this different system of measurement," he said.

As LPO reported, last year Lopez Obrador was already giving signs of a turnaround regarding the economy. That change coincided with an unavoidable scenario: his promise of 4% annual growth for the entire six-year period was no longer going to be possible.

Between the learning curve of an incoming administration, lack of trust on the part of corporations, external shocks and now a pandemic that has put the world economy in a recession, the president's goal has become unattainable, and he has avoided talking about growth and GDP to focus on development and well-being.

Little by little, he also questioned the fact that the economic world only based its criteria on the parameters of the GDP and began to argue that the latter was insufficient, a coincidence that had in recent days Alicia Bárcena, secretary of Cepal (Economic Commission for Latin America and the Caribbean)

At her latest conference, the representative of the Latin American organization stated about the GDP: "It is not obsolete, but it is incomplete to reflect what is really happening in the countries". She acknowledged that it is a good indicator of what is happening in the productive sectors, but it leaves out development measures and underestimates goods and services that do not go through the market.

Recently, Alfonso Ramirez Cuellar, president of AMLO's Morena party, focused precisely on the issue of welfare, on providing more legal tools to the National Institute of Statistics, Geography and Informatics (INEGI) to measure wealth, an initiative that to many seemed intrusive because it meant the revision of people's assets.

LĂłpez Obrador distanced himself from this, affirming that "it was not correct" and that only public officials had the obligation to make their patrimony transparent.


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