Most everything you see and use today was “Made In China”. Just check the label on ANYTHING. China’s GDP in 2011 ranked second in the overall world ranking, at about 5,739,358 (USD), second only to the United States. Everyone knows China is an economic powerhouse, but despite a high GDP, you need to take a look at the lives of their people. GDP may be used as a measurement of wealth across many countries, but GDP doesn’t show you the full picture.
What is GDP, really?
See, China houses tons of factories, but foreign investors who produce goods in China, won’t necessarily be spending that money in China. So a great GDP doesn’t really reflect a prosperous life for the people, anyway. Why? It doesn’t consider where the money actually stays; GDP only counts good and services that are produced “within” the country, not where the money actually goes. Just so you know, China’s high GDP is fueled by people working 60 hours a week, not a very great standard of living, eh.
So what about this GNI thing? What does Gross National Income (GNI) measure? Lets look at Japan. In the land of the rising sun, most local investors will hire local people and they sell their products to the local market. Their electronic goods, handphones and game consoles are produced only to be marketed in Japan, for Japanese people. So local workers spend money in the local market to buy local goods. Everything stays IN as GNI.
Japan also sets up factories in other countries with low production costs, such as Thailand and Malaysia to produce components for electronic goods to be shipped back to Japan. And if the Japanese factory owners send their money back to Japan, wealth and goods stay in the country, adding to their GNI. GNI measures all the good stuff that stays within the borders.
Here’s an easier example. Have you ever heard people cakap-cakap that Indonesia workers here have big houses at their homeland? They come to our country, we pay them to do jobs, they send back most of their salary back to Indonesia. 3-4 years working here, they can be very rich oredi. Some of them have bigger house than you! Yes, YOU.
Well, what they send back to Indonesia, adds to Indonesia’s Gross National Income.
On a sidenote, I visited Japan recently, and found that whenever I bought something and converted it to Yen it would nearly induce a heart attack. RM72 for one piece of Roti Nan and Tandori Ayam? So expensive! I can have 8 plates of Nasi Kandar Pelita! For the sake of staying alive, I ate that Roti Nan. The cost of that Roti Nan is ONLY 1800 Yen, which for them is only like RM18. Japan has a really strong currency. ☹
So you know, when we appreciate our own products Japan-style, the value of our products rise. And for the local employers, instead of hiring foreign workers, why don’t you hire local people? Pay them to do the jobs and you help enrich the local market, which benefits YOU too. It’s like a win-win situation! Or… I could work in Japan for 2-3 years, and I will be rich when I return to Malaysia just like those Indonesians who are now working in our country. Maybe I wouldn’t mind being a PATI* in Japan too. Muahahah!
*PATI: Pendatang Asing Tanpa Izin
by Intan Nur Anum a.k.a @_LoveShak
The information and views set out in this article are those of the author and do not necessarily reflect the official opinion of Kopitiam Ekonomi.