Economic growth and sustainability - an empirical study of the Thai development experience

Abstract

Increasing economic growth has long been the dominant position within the public policies of all South East Asian countries. More recently, a new issue, sustainability, has emerged within development economic literature, which has significant implications for the continual pursuit of economic growth. Sustainability is concerned with ensuring the current generation meets their present needs without threatening future generations' ability to do likewise. This ability is dependent on a healthy and functioning socio-economic environmental (SEE) system. Economic growth can damage the SEE-system, though, through resource degradation, over-harvesting and pollution. Therefore, achieving economic growth and sustainability simultaneously may not be possible. This paper discusses these tensions between economic growth and sustainability by undertaking a number of SEE-based adjustments to GDP in order to measure sustainability. Thailand is used as a case study for a 25 year period, 1975-1999. The adjustments include the environmental costs caused by economic growth such as noise pollution, water pollution, the depletion of non-renewable resources, and deforestation. The results show a stark difference in terms of GDP per capita and the SEE-adjusted GDP per capita figure. The paper concludes that with increasing environmental costs of economic growth, pursuing high growth objectives without considerations to the environment threatens sustainability.