For nearly a century, Gross Domestic Product (GDP) has been treated as the ultimate measure of progress. It tracks economic output but ignores much of what societies truly value. Growth can accelerate even as wages stagnate, ecosystems decline, and inequality deepens. Simon Kuznets, who developed GDP in the 1930s, warned that it was never meant to measure well-being. This is increasingly relevant as economies invest in clean energy, digital industries, and modern infrastructure, areas that GDP struggles to capture.

Growth is taking bold new forms across the Middle East and North Africa. Saudi Arabia is developing futuristic cities, the UAE is emerging as a hub for clean technology, Qatar is expanding cultural and education sectors, and Egypt is advancing large-scale renewable projects. These transformations boost resilience and opportunity but remain faintly visible in headline GDP figures.

What are we missing by relying on GDP? Should policymakers track productivity alongside carbon efficiency, or measure prosperity through opportunity and quality of life? The numbers we choose will shape how progress is understood and whose future it serves.

GDP: THE DOMINANT METRIC? 

For certain decisions, such as short-term macroeconomic policy, GDP can be a helpful tool, says Paul Makdissi, Ph.D., Professor of Economics, University of Ottawa. “However, GDP is not designed to capture the broader dimensions of human development, which limits its relevance as a sole measure of progress.”

Another critical gap is environmental impact. Dr. Saeed Aldhaheri, Director, Center for Futures Studies, University of Dubai, advisor for the World Economic Forum (WEF), and UNESCO co-chair and board member, says, “The increase in GDP often correlates with environmental degradation, resource depletion, and higher carbon emissions, none of which are adequately accounted for.”  GDP also fails to recognize unpaid labor, such as caregiving, community service, and volunteerism, activities deeply embedded in Gulf cultures. Equally significant is mental health and overall life satisfaction. Dr. Aldhaheri adds, “Countries and governments need to rethink GDP in terms of a regenerative economy and genuine development that should include comprehensive metrics capturing environmental sustainability, mental health indices, community cohesion, and equitable opportunities.”

While GDP tracks economic activity, it falls short when measuring sustainability and human well-being. Pushpam Kumar, Chief Environmental Economist and Senior Economic Advisor at the UN Environment Programme (UNEP), observes that due to historical precedent, GDP has often been proxied with well-being. “Limited asset and production boundaries, especially in relation to natural and human capital, and over-reliance on transactions and exchange prices, make GDP unable to measure or capture a large number of activities for which explicit markets are missing or limited.” 

These gaps become particularly visible when considering the use of natural resources. GDP does not reflect whether production is based on the depletion of non-renewable resources, such as oil, which has implications for sustainability. It can record spending related to social unrest or environmental damage as positive contributions to output, even though these may reduce well-being, highlights Makdissi. “Most importantly, GDP does not capture non-monetary dimensions of development, such as the ability of people to make meaningful choices in their lives, their security, health, and education.” It also does not measure how economic benefits are distributed within the population.

Kumar adds that humans are embedded in nature. “Most of our needs are fulfilled by goods and services emanating from ecology and ecosystems, and for them, the market does not exist. Hence, they remain unaccounted for, which leads to over- or under-exploitation of natural assets. For the Gulf, renewable natural capital like topsoil and non-renewable assets like gas and oil must not be left unassessed, unaccounted, or unpriced.”

QUALITY OF LIFE AND HAPPINESS GOALS 

The explicit emphasis by Gulf countries on quality of life and happiness within their national visions, such as the UAE’s We the UAE 2031, represents a profound shift from a purely GDP-centric approach, notes Dr. Aldhaheri.

He highlights the UAE’s National Strategy for Wellbeing 2031, its National Program for Happiness and Wellbeing, and the appointment of a Minister of State for Happiness in 2016 as evidence of the country’s commitment to embedding positivity, mental health, and life satisfaction not only within government institutions but across its economy. “Gulf nations are pioneering a new narrative for development, one that deeply values human flourishing alongside economic prosperity,” he says.

Kumar adds that fiscal and monetary policies should be linked to measuring natural capital within an inclusive framework alongside produced capitals like buildings and equipment, natural capitals like topsoil, climate, and biodiversity, and human capitals like education, health, and social networks.

For Makdissi, this represents a complementary approach. “From a development perspective, a quality-of-life framework, particularly one inspired by Amartya Sen’s capability approach, offers a richer understanding of progress than GDP alone,” he says.

He notes that happiness indicators, while insightful for people’s immediate emotional state, can be volatile and influenced by short-term events. “Happiness is about how people feel, whereas quality of life asks whether they have the capabilities and freedoms to live the lives they value over time. For guiding long-term policy, a multidimensional quality of life index is more robust,” he adds.

THE ROLE OF SOVEREIGN WEALTH FUNDS AND GOVERNMENT PLANNING

Sovereign wealth funds and government planning bodies could play a pivotal role in rethinking growth metrics by supporting evidence-based policy decisions that place human development at the centre, says Makdissi. Their strategic influence, long-term investment horizon, and capacity for policy coordination allow them to integrate sustainability, social well-being, and equitable growth into performance benchmarks.

Central to this approach are mental health and social cohesion. “They are not only part of the health and community dimensions of well-being but are also essential for protecting autonomy, voice, and resilience in the face of shocks,” Makdissi explains. “It must be embraced, accounted for, and quantified to enable better, more informed decisions in the region,” he adds.

Measuring these dimensions requires robust data. Household surveys should go beyond income and employment to include questions on psychological well-being, trust in institutions, social support, and meaningful social participation. These should be informed by qualitative research, such as focus groups and key informant interviews, to capture local realities and diversity of experiences.

“The resulting data should be made available to researchers to allow for independent analysis of both average outcomes and inequalities within these dimensions,” Makdissi emphasizes. Without this, it is impossible to know whether policies truly expand people’s capabilities or leave certain groups behind.

REFRAME GROWTH FOR THE NEXT 50 YEARS 

What would it look like if we were to reimagine “growth” in the Gulf over the next 50 years? For Dr. Aldhaheri, that vision includes cities that breathe, with parks, clean energy, and sustainable living. Schools would teach emotional resilience alongside math, and healthcare systems would treat stress and loneliness with the same urgency as diabetes or heart disease. Economies would diversify into clean tech, smart education, and cultural creativity, not just for profit, but for purpose.

“Imagine if ‘growth’ meant replenishing what we take, not just multiplying it,” he says. Evidence shows the region is already moving in this direction. The UAE ranks 21st globally in the 2025 World Happiness Report, the highest in the Arab world, reflecting its focus on quality of life and well-being. Meanwhile, Oliver Wyman reports highlight efforts to protect natural capital, showing how sustainable management of ecosystems can accelerate economic and social development.

Dr. Aldhaheri points to recent initiatives as further proof of this shift. “Our leaders haven’t just put green energy on a shelf,” he adds. “They declared the ‘Year of Sustainability’ in 2023 and are driving bold climate diplomacy at COP28. That marks a turning point: growth entwined with regeneration, collective wellbeing, and cultural cohesion.”

Building on this vision, Kumar highlights the importance of resolving trade-offs across various types of capital, improving intergenerational equity, and enhancing life and well-being. Similarly, Makdissi emphasizes that growth should expand people’s opportunities and capabilities, ensure access to high-quality healthcare and education, foster meaningful participation in society, and achieve equitable development benefits. “This must be complemented by a strong commitment to environmental sustainability and resilience in the face of global challenges,” he stresses.