Inclusive Economic Development

Rising incomes of the average citizen always seems like a great achievement for any government. Policymakers and economists are all in arms about trying to raise and/or sustain economic growth of a country or a region. Economic growth, put simply, is the increase in the average income of a region or a country. The belief is that with rising incomes, families become wealthier, and can afford more and better-quality good and services, which then can lead to economic development.

However, one flaw in this belief is that it puts too much emphasis on the notion that rising incomes is necessary for prosperity. Other important things need to be put in place to ensure that economic development, not just economic growth, is taking place. It is economic development that leads to prosperity, not just rising incomes due to economic growth. Besides rising incomes, other components of that promotes economic development are (the list is not exhaustive):

1. better access to healthcare that makes life expectancy longer and improves the quality of life.

2. improvements in the educational attainment of individuals, with easy access for all

3. better access to fresh, unadulterated food

4. ability of the citizens to life in a unpolluted or minimally-polluted environment. Ensure that environmental damage is kept to a minimum. 

5. excellent infrastructure facilities (roads, railways, air travel and internet)

6. ensure all citizens have equal rights

7. improvements in the governance, law enforcement and securing property rights. Reduction in corruption. Ensure transparency in government. 

Many other factors can be added to the list. Different indicators, published by different international and donor organizations, measure and rank countries based on each of these indicators. The UNDP's Human Development Index combines income, education and life expectancy together to create one single index that shows the development of the country. 

Instead of just focusing on raising income levels, developing countries should also focus on improving these seven indicators. The Millennium Development Goals tried to promote economic development in poor countries by promoting human development, but many countries failed to achieve the goals. Thus, international organizations and developing countries should make economic development their core mission to achieve prosperity, not just economic growth. This will enhance the quality of life of the average citizens, while making their incomes higher. This simple thought question shows the importance of overall development in a country - "What's the use of having a high income if most of it goes to health expenses because of the acute smog in the city where the person lives?" 

Governments should start to focus on economic development, not economic growth to make their country a better place.